Cobasys and A123Systems Announce Partnership to Develop Lithium Ion Hybrid Electric Vehicle Battery Systems

ORION, Mich. and WATERTOWN, Mass., Jan. 3, 2007 -- Cobasys and A123Systems announced today that they have signed a memorandum of understanding to enter into a partnership to develop, manufacture, sell, and service lithium ion energy storage systems for hybrid electric vehicle (HEV) applications. The scope of the agreement will include joint development, marketing and supply of A123Systems nanophosphate lithium batteries and Cobasys systems integration and manufacturing of battery systems for HEV markets.

To support customer programs in transportation markets, Cobasys will act as the tier one supplier providing the technical assistance and expertise for the design and development of battery system products including: packaging, thermal management, wiring, electronics and control algorithms. Cobasys will help develop the requirements and specifications to meet the integration needs of customers and partners and will provide the validation testing of fully integrated lithium battery systems. A123Systems will manufacture and supply its automotive-class nanophosphate lithium ion cells and technology.

"We are excited to have A123Systems as a partner," stated Thomas S. Neslage, Cobasys President & CEO. "The agreement to unite Cobasys system expertise with A123Systems lithium technology further exemplifies our vision to be recognized as the world's most admired energy storage integration solutions company."

This initiative will complement Cobasys' strong current production battery system product offerings with A123Systems lithium technology allowing its customers expanded choices for hybrid electric vehicle programs.

"We look forward to working with Cobasys to introduce lithium ion into the automotive market," said David Vieau, A123Systems President and CEO. "This partnership will provide the market with game changing performance to further accelerate the adoption of hybrid electric vehicles."

"Our partnership presents an enormous range of potential benefits for the rapidly growing HEV market. We look forward to working closely with A123Systems to provide leading edge solutions to maximize the opportunity afforded by the synergy of the two companies," said Ivan Menjak, Cobasys General Manager for Planning and Business Strategy.

About Cobasys

Cobasys designs, manufactures and integrates advanced battery system solutions for transportation markets, including Hybrid Electric Vehicles (HEV), Electric Vehicles (EV) and 36/42 Volt applications and to stationary markets, including Back-Up power supply systems for Uninterruptible Power Supply (UPS), Telecom and Distributed Generation markets.

Cobasys is a joint venture between Chevron Technology Ventures LLC, a subsidiary of Chevron Corporation and Energy Conversion Devices, Inc. .

For more information about Cobasys, contact Ray Wagner at 248-620-5700 or visit their website at www.cobasys.com.

About A123Systems

A123Systems has quickly become one of the World's largest suppliers of high-power lithium-ion batteries. Based on the Company's patented nanophosphate technology, the batteries deliver previously unattainable levels of power, safety and life. Applicable to a wide range of industries, A123Systems' products allow OEMs expanded flexibility in system design, removing many traditional technology constraints. Founded in 2001, A123Systems' proprietary nanoscale electrode technology is built on initial developments from the Massachusetts Institute of Technology.

For additional information about A123Systems please contact Keith Watson at 617-758-4142 or visit www.a123systems.com.