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Plug-In Hybrid Vehicle Powered by Valence Battery Unveiled at EVS 21

MONACO & AUSTIN, Texas--March 29, 2005--

  New Concept Car Developed With EnergyCS Offers Dramatically Better Gas Mileage and More Zero Emission Driving Than Existing Hybrids  



At the 21st Worldwide International Battery, Hybrid and Fuel Cell Electric Vehicle Symposium & Exhibition (EVS 21) being held next week, Valence Technology Inc. , a leader in the development of large-format Lithium-ion rechargeable batteries, and EnergyCS, developers of integration control systems, will showcase a new concept plug-in hybrid electric vehicle.

Powered by the Valence U-Charge(TM) Power System, the plug-in hybrid electric vehicle (PHEV) is a fully functional concept car based on a 2004 Toyota Prius. Because the Valence battery offers much more energy than batteries traditionally used in hybrid vehicles, it allows significant amounts of zero-emission driving with the concept PHEV. With a fuel efficiency that can reach up to 180 miles per gallon for an average commute of 50-60 miles per day, the PHEV has superior gas mileage, which means fewer trips to the gas station. Using the U-Charge system, the PHEV offers the best of both worlds: zero-emission electric mode (up to 33 mi/h, 53 km/h) and an efficient gas motor for long trips.

Valence will exhibit in EVS 21 Booth C128 and the Valence-EnergyCS PHEV will be on display at the Ride and Drive area throughout the EVS 21 show. The vehicle will also be part of the Rallye Monte-Carlo Fuel Cell & Hybrid on April 2.

"Valence's phosphate-based Lithium-ion batteries have substantially higher energy density than competing batteries for hybrid electric vehicles. And, unlike other types of Lithium-ion batteries, our Saphion technology offers the longevity and safety needed for both hybrid and pure electric vehicles," said Stephan Godevais, president and CEO of Valence Technology. "The Valence-EnergyCS plug-in hybrid vehicle is a breakthrough in the industry. It allows renewable energy to displace gasoline, reducing our reliance on fossil fuels, which is increasingly important given today's environment and economic concerns."

The U-Charge battery system used in the Valence-EnergyCS PHEV is based on Valence's Saphion(R) technology, the only one like it on the market today. It replaces toxic heavy metals with phosphates, creating an energy storage battery that is chemically more stable, and therefore safer, than traditional oxide-based Lithium-ion batteries. Saphion technology's chemistry yields a battery that is not only environmentally friendly, but requires virtually no maintenance and offers long life and low total cost of ownership.

About EnergyCS

Energy Control Systems Engineering (EnergyCS) is a privately held company based in Monrovia, California. It provides leading-edge consulting, design and prototyping services for system integration, management and monitoring of electrochemical energy systems such as batteries and fuel cells. The company is focused on and particularly interested in applications in the areas of EV and HEV transportation and alternative energy on systems from 24 to 1000 VDC.

About Valence Technology Inc.

Valence is a leader in the development and commercialization of Saphion(R) technology, the only safe large format Lithium-ion rechargeable battery technology. Named in 2004 as a Top 100 Innovative Company by Red Herring, Valence holds an extensive, worldwide portfolio of issued and pending patents relating to its Saphion technology and Lithium-ion rechargeable batteries. The company has facilities in Austin, Texas, Henderson, Nevada and Suzhou and Shanghai, China. Valence is traded on the NASDAQ SmallCap Market under the symbol VLNC and can be found on the Internet at www.valence.com.

Safe Harbor Statement

The information contained herein includes "forward-looking statements." The company cautions readers not to put undue reliance on forward-looking statements. These forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and actual results may differ materially from those described herein, for the reasons, among others, discussed in our reports filed with the Securities and Exchange Commission.