Electric Vehicle Division News

A World Record 145 Miles for Arotech’s Electric Fuel Zinc Air Bus

Range increased by 14% with new ultra capacitors and improved energy management

August 12, 2003 — Arotech Corporation (NasdaqNM: ARTX) announced today that its all-electric bus powered by the Company's Electric Fuel zinc air fuel cell technology has demonstrated a record 145-mile range under rigorous urban conditions. In a test conducted last week a new pack of ultra capacitors was installed on the bus, together with improved energy management systems, greatly increasing the system's efficiency. Conducted under the same conditions of an earlier tests, these improvements increased the bus's range from 127 to 145 miles, a 14% increase from July 2002 testing and a 43% improvement from the same test in 2001.

This drive was the last performance test drive planned under phase III of the Zinc-Air All Electric Transit Bus program with the Federal Transit Administration. As in previous drives, the test drive was conducted on the former Griffith Air Force base near Rome, New York, with the bus traveling under typical city bus driving conditions, including stop and go, acceleration and constant speed. The Company believes the 145 miles driven to be a world record. As a measure of comparison, the average normal full day cycle for New York City buses is less than 90 miles. The Company believes that these test results clearly indicate that all-electric buses utilizing Electric Fuel's Zinc-Air technology have sufficient range to offer a practical solution for helping to eliminate bus pollution in central cities.

The Electric Fuel All Electric Transit Bus is designed to operate as a full-size, zero emission 40-foot bus having a 20-ton gross vehicle weight (including passengers) and operating all standard bus features, including air conditioning.

“The continued progress in technology translates into lower future operating costs,” said Robert S. Ehrlich, Arotech Chairman and CEO. “We will continue our efforts to find the strategic partners needed for full commercialization.”

About Arotech Corporation

Arotech's corporate mission is to provide quality defense and security products for the military, law enforcement and homeland security markets, including advanced zinc-air batteries, multimedia interactive simulators/trainers and lightweight armoring.

Arotech Corporation (www.arotech.com) operates two business divisions: Electric Fuel Batteries — developing and manufacturing zinc-air batteries for military and homeland security applications and developing electric vehicle batteries for zero emission public transportation; and Arotech Defense — consisting of IES Interactive, which provides advanced high-tech multimedia training systems for law enforcement and paramilitary organizations, MDT Armor, which provides vehicle armoring for the military, industrial and private sectors, and Arcon Security, which provides homeland security consulting and other services.

Arotech is incorporated in Delaware under the name “Electric Fuel Corporation” and has corporate and sales offices in New York and Denver with research, development and production subsidiaries in Alabama, Colorado and Israel.

Except for the historical information herein, the matters discussed in this news release include forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995. Readers are cautioned not to place undue reliance on these forward-looking statements, as they are subject to various risks and uncertainties that may cause actual results to vary significantly. These risks and uncertainties include, but are not limited to, risks relating to: product and technology development; the uncertainty of the market for Arotech’s products; changing economic conditions; delay, cancellation or non-renewal, in whole or in part, of contracts or of purchase orders; significant future capital requirements; and other risk factors detailed in Arotech’s most recent Annual Report on Form 10-K for the fiscal year ended December 31, 2002, as amended, and other filings (under the name Electric Fuel Corporation) with the Securities and Exchange Commission. Arotech assumes no obligation to update the information in this release. Reference to the Company’s website above does not constitute incorporation of any of the information thereon into this press release.