Press Release

Ovonic Battery Announces Funding for Nickel-Metal Hydride Battery Research

12/09/96

USABC Funds $8 Million Cost-Reduction Program with GM-Ovonic

TROY, Mich., Dec. 5 -- Ovonic Battery Company,
Inc. ("Ovonic Battery"), a subsidiary of Energy Conversion Devices,
Inc. ("ECD") , announced today that the United States
Advanced Battery Consortium ("USABC") has approved funding for an $8
million, 15-month program to reduce the costs of manufacturing
nickel-metal hydride ("NiMH") electric vehicle ("EV") batteries. This
is a very important next step as NiMH EV battery production begins at
the GM Ovonic L.L.C. ("GM Ovonic") manufacturing plant. GM Ovonic is
the manufacturing joint venture between General Motors Corporation
("GMC") and Ovonic Battery. Production tests of the NiMH battery have
confirmed its robust design and superior driving range capabilities in
several automakers' electric vehicles. It is becoming clear that
production Ovonic NiMH batteries will make electric vehicles practical
now and into the next century.

"Our goal is to take a battery proven in performance, maintain that
performance, but reduce its costs to affordable levels," according to
Mr. Bruce Rauhe, USABC Program Manager. S.R. Ovshinsky, President and
CEO of ECD and CEO of Ovonic Battery, noted that Ovonic Battery has
been working with GM Ovonic to ensure that the business plan battery
costs are achieved.  Saying that "Technology improvements, increasing
production volume, and material and process improvements are all
important factors in meeting our cost objectives," Mr. Ovshinsky
added, "the USABC cost-reduction program, a collaborative effort
between Ovonic Battery and GM Ovonic, will be a great help in
accelerating cost-reduction proposals into production batteries."

Today is also the first day the GMC electric vehicle, EV-1, will be
offered to customers in California and Arizona. Twenty six Saturn
retailers in Los Angeles, San Diego, Phoenix and Tucson are excited
about the public interest in electric vehicles and they expect their
initial supply of EV-1s will quickly move out of their showrooms onto
the roads. Congratulating the GM Advanced Technology Vehicles team
that developed and built the EV-1, ECD/Ovonic Battery Chairman, R.C.
Stempel, said, "all of us at ECD and Ovonic Battery are pleased to see
this advance in automotive technology become reality and look forward
to 1997 when a very good electric vehicle becomes a truly great car
when equipped with NiMH batteries." All of the initial EV-1s are
equipped with valve regulated lead-acid batteries.  The GM Ovonic team
has reached the NiMH EV battery production startup stage with Ovonic
Battery supplying the negative electrode material and other components
to the joint venture.

The following excerpts are from the Fall 1996 USABC newsletter:

Bruce Rauhe, USABC program manager, said: "There are two paths that
can be taken to achieve this goal--save on the actual materials used
or save in the production process.  Ideally we want to do both."

Since the high cost of producing NiMH batteries is found in the
components of the battery, such as the nickel in the electrodes, GM
Ovonic is focusing on ways to use fewer electrodes and less materials
on the electrodes without affecting power or energy.

"Another cost-saving measure in the future will be automation of
battery production," Rauhe said. Currently battery production requires
a significant amount of low-volume, labor-intensive operations.

The GM Ovonic cost reduction program is focused on USABC's Phase II
objective to develop manufacturing processes for mid-term batteries
related to cost and quality enhancements.

OBC was the first battery developer to receive a USABC contract for
its development of NiMH. OBC will play a major role supporting GM
Ovonic in the new contract.

"GM Ovonic was formed to commercialize NiMH batteries," said
Rauhe. "And this contract with GM Ovonic is an important step in
bringing their NiMH batteries closer to successful commercialization."

ECD is a leader in the synthesis of new materials and the development
of advanced production technology and innovative products. ECD has
pioneered the field of amorphous, disordered and related materials. It
has developed proprietary products and production technology and is a
leader in the fields of alternative energy and advanced
information. ECD's products and production technology in the field of
alternative energy are being manufactured and marketed through
alliances throughout the world with major companies, such as General
Motors Corporation and Canon, Inc. In the field of information
technology, ECD's Ovonic phase-change erasable optical memory
technology is rapidly becoming the international choice of major
optical memory disk manufacturers. ECD's licensees in this area
include, among others, Matsushita Electric Industrial Co., Ltd.,
Hitachi, Ltd., Plasmon PLC and Toray Industries, Inc.  ECD's web site
is http://ovonic.com.