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A New Generation of Diesel Engines has Arrived

4 June 1998

Has the Time for a New Generation of Diesel Engines Arrived? BAT Has Been Saying Yes; Now the World Seems to Agree
    BURBANK, Calif., June 4 -- On January 15th and again on
February 10th, 1998, BAT International (OTC Bulletin Board: BAAT) completed
runs with an independent certification team (including Roger Ward, 2 time Indy
500 winner) at California Speedway to demonstrate that a Detroit built sedan
could get over 90 miles per gallon (at 40 m.p.h.) on a gallon of fuel.  BAT
used a standard production four door Geo Metro and an off-the-shelf Yanmar 1.5
liter direction injection diesel engine modified with BAT's proprietary
Dolphin Pulse Charge technology (see press release dated 2/11/98 at our web
site http://www.baat.com).  BAT was heavily criticized at the time by both the media
and engineers for suggesting the use of diesel engines to meet national
efficiency goals.  Now the tide appears to have turned and national research
organizations such as the National Research Council and the major auto
companies are suggesting that the only sensible approach to achieve national
efficiency goals is to re-introduce an advanced generation of new diesel
engines, fuels and emission control technology.
    The debate over next generation super-efficient drive technologies for
21st century vehicles is very real and relates to some important drive system
alternatives.  Many have suggested that the answer lies in using a hybrid
electric vehicle drive that combines internal combustion engines and electric
drives.  BAT has long ago concluded that hybrid electric drives are likely to
be too complicated, expensive and require significant infrastructure
investments to succeed in the market.  Instead, BAT has focused most of our
research efforts on developing a small, powerful, super-efficient, very clean
diesel engine.  BAT's strategic focus, which was once criticized, now seems to
match the prevailing view as evidenced by several recent articles on the
future of automobile where they note that diesel may be the answer.

    On April 16th, 1998, the Dow Jones News Wire reported the following:
    "A National Research Council (NRC) report released Wednesday said the
hybrid electric vehicle's major stumbling block may lie in the vehicle's
affordability and the ability to meet emissions standards.  The NRC said while
the hybrid electric vehicle is technologically advanced and could meet many of
the PNGV's goals, the vehicle would likely be too expensive for the U.S.
market.  The report also said major technological advances will be needed to
control engine emissions.  The NRC said any money saved because of gains in
fuel efficiency probably wouldn't offset the price of the car, which would
require costly battery, power conversions and electronic-control systems.  The
report also said owners of the car might face higher maintenance costs because
the hybrid cars are so complex.  The NRC said the PNGV program should be
expanded to include the development of lightweight, conventional vehicles
built with advanced diesel engines and other improved technologies.  Such
vehicles could reach up to 60 miles per gallon and cost about the same as
today's vehicles."
    "The National Research Council is a private non-profit institution that
provides independent advice on science and technology issues under a
Congressional charter and reviews the PNGV program annually at the request of
the participants.  The PNGV program was initiated in late 1993 by President
Clinton with the goal of substantially improving fuel efficiency & enhancing
productivity and competitiveness of the U.S. auto industry."
    Dow Jones News Wire, Reprinted by Permission

    A more recent article appeared in the May 17th issue of the Los Angeles
Times which has the following excerpts:
    "U.S. Automakers are laying the ground work to put millions of diesel
engines into sport utility, pickups and other passenger cars over the next
decade for the sake of fuel economy" ... "further engine refinements, cleaner
fuels and better catalysts could put to rest diesel's dirty legacy".  The
article further states "The Big Three automakers see diesel engines as the
quickest way to improve fuel economy in their gas-guzzlers for the least
investment" ... "Diesel could also help the United States comply with the
international global warming agreement reached last year in Kyoto, Japan".
Rod Tabaczynsky, Director of Ford's Engine Research Laboratory said "In my
opinion, there's a high probability that diesels will make a come back."
    The LA Times article also states "In the early 80's, General Motors set
back diesel a long time by introducing the Oldsmobile equipped with a diesel
which was a lemon".  In Europe and Asia, diesel engines are readily accepted
and are in approximately 25% of new cars.  After BAT completed its Dolphin
Pulse Charged diesel test run in January and February, much of the response
came from Europe and Asia.  Consequently, BAT's commercialization efforts are
presently being targeted in these areas.
    Copyright 1998, Los Angeles Times, Reprinted by Permission

    The conclusion of the LA Times article stressed that the key to the future
of diesel is greater efficiency and cleaner fuels.  BAT has already made
considerable strides in these areas with more advanced designs expected to be
showcased and demonstrated this summer.  BAT would like to see Dolphin Pulse
Charged engine technology in commercial use within one year.

    This press release contains forward-looking statements that should not be
used to make an investment decision.  Please refer to our web site and other
sources for more detailed Company information.