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ECD Expansion Necessitates Move to New Consolidated Headquarters

ECD Expansion Necessitates Move to New Consolidated Headquarters

                   Increasing growth and demand on business
                      calls for move to larger facility

    TROY, Mich., Aug. 20 With the widespread acceptance of the
technology and products of Energy Conversion Devices, Inc. (ECD)
, the company is in the process of moving to a new, larger
consolidated facility located in Rochester Hills, Mich., about nine miles from
the current smaller multi-building complex in Troy.  Due to increased
activity, ECD's Production Technology and Machine Building division is
expanding its capabilities and will move into a larger facility next to the
new headquarters later this year.
    The new headquarters will house the corporate offices and staff, the
financial, accounting, legal, patent, purchasing, marketing, shareholder
relations and human resources departments.  A new Central Analytical
Laboratory and Clean Room are also part of the facility.  The move is expected
to be completed in September 2001.  Correspondence and phone calls should
continue to be directed to the current location until further notice.
    Equipment installation is underway at Texaco Ovonic Hydrogen Systems LLC
for the initial production of the compact Ovonic hydrogen storage containers.
Accordingly, Texaco Ovonic Hydrogen Systems LLC and Texaco Ovonic Fuel Cell
Company LLC, two of ECD's 50-50 joint ventures with Texaco Energy Systems,
Inc. (TESI), a wholly owned subsidiary of Texaco Inc. , will
complete their move to their new expanded locations in Rochester Hills in the
next few months.
    Commenting on the moves, Stan Ovshinsky, President and CEO, said, "We are
the only company that provides a complete systems approach with products
necessary for the hydrogen economy -- photovoltaics and fuel cells for
generation, batteries and hydride materials for hydrogen storage and
infrastructure, and the production of hydrogen using photovoltaics to break up
water.  The enthusiastic acceptance of ECD's commercial photovoltaic, battery
and hydrogen storage products has translated into increased business in all of
our energy area.  Our technology provides needed solutions for the
transportation and energy sectors.  Similarly, in the information technology
area, we are providing solutions to the optical and semiconductor sectors
where new products are an absolute necessity.  The move to our new
headquarters and the large-scale expansion of our production facilities allows
us to respond to these critical needs and to offer additional support to our
joint ventures and manufacturing units."  He further noted that the increased
growth at ECD has resulted in the hiring of new people throughout its
operations.
    Recent examples of increased business activity include:

    *  Ovonic NiMH batteries are the batteries of choice for hybrid electric
vehicles of all sizes, passenger cars, light-duty trucks, buses and heavy-duty
trucks.  The July 18 announcement by Texaco Ovonic Battery Systems LLC, a 50-
50 joint venture between TESI and Ovonic Battery Company, Inc., ECD's battery
subsidiary, of its $150 million commercial expansion program will help meet
the requirements of potential customers now testing or evaluating production-
intent NiMH battery pack systems for their vehicles.  Examples of recent
vehicles with NiMH battery packs include:
    -- 44-passenger transit hybrid bus
    -- European manufactured 5-passenger hybrid van
    -- U.S. mid-size hybrid SUV
    -- U.S. full-size hybrid pick-up
    Ovonic Battery's new plastic case mono-block is especially suited to these
vehicle applications because of its compact liquid-cooled design available in
various power and energy ratings to meet a wide range of manufacturers'
specifications.  With the number of inquiries being received, we expect the
joint venture expansion to be fully utilized; additional future expansion
plans are already underway.  Texaco Ovonic Battery is busy implementing the
expansion of its Ovonic NiMH manufacturing capability to meet the needs of its
customers.  Since its formation, Texaco Ovonic Battery Systems has been
receiving numerous customer requests for quotations.

    *  We are in the process of setting up the initial production line for the
Ovonic hydrogen storage system containers.  Production is expected to start
this fall at Texaco Ovonic Hydrogen Systems, with commercial market entry
shortly thereafter.

    *  The ECD unique Ovonic Regenerative Fuel Cell(TM) technology is
advancing rapidly.  There is a need for a realistic, robust, high-efficiency
fuel cell for transportation applications.  Work at Texaco Ovonic Fuel Cell
Company is proceeding well.

    *  On-going manufacture and installation of the 25MW photovoltaic machine
in the new United Solar Systems Corp. Auburn Hills, Mich., facility.  When
completed in early 2002, it will be the world's largest amorphous silicon
photovoltaic production machine.  The 25MW machine has been designed and is
being built by ECD's Production Technology and Machine Building Division under
a $50 million contract from Bekaert ECD Solar Systems LLC, a joint venture
between United Solar and N.V. Bekaert S.A.  United Solar's current 5MW
capacity is not sufficient to meet customer orders in a timely manner.  Our
photovoltaic roofing products have generated a great deal of interest because
of their unique advantages and ease of installation.  United Solar continues
to receive new orders.  The recently announced order from Texaco to design and
install a photovoltaic system to supplement Texaco's electric power
requirements in its Central Valley oil field operations in California could
amount to a total of 1MW, the largest thin-film photovoltaic installation to
date.  The petroleum industry has a growing need for photovoltaic systems
which is reflected by the installation of our Ovonic photovoltaic systems on
the canopies of Texaco filling stations.

    *  The joint development program between Ovonyx, Inc. and Intel
Corporation in connection with the Ovonic Unified Memory technology (OUM) is
progressing very well.  In an interview with CNET News.com, Stefan Lai, VP,
Intel Technology and Manufacturing Group, said, " ... OUM is likely the most
promising for its combination of low cost and ease of integration with other
memory technologies."  According to Lai, OUM could offer price and read/write
performance to take over the majority of storage duties for devices such as
handhelds.  In an article published in Forbes magazine (April 30, 2001), Lai
said, " ... we're banking on ovonics."

    *  The management committee of Ovonic Media, a joint venture between ECD
and GE Plastics, a division of General Electric, is pleased with the progress
to date and the next phase in expansion of the joint venture is being planned.

    *  The programs with Rare-Earth High Tech in Inner Mongolia, China are
advancing as planned.  As a result, we expect to recognize another $2.5
million of license fees in the 4th quarter of fiscal year 2001.

    Robert C. Stempel, Chairman, discussing the move, said, "This move to a
new consolidated headquarters facility underscores the fact that ECD's
proprietary technology-based commercial products continue to gain acceptance
and be demanded by the marketplace.  Products based on ECD's technologies in
photovoltaics, energy storage, energy generation and information technology
are being used worldwide.  This facility provides the room we need to
accommodate our present as well as expected future growth."  He further added
that with the improvement in our operations and the proceeds from the recent
warrant exercises, ECD continues to have a strong balance sheet with cash and
cash equivalents in excess of $100 million.
    In further discussing the new headquarters, Stempel and Ovshinsky noted
the new Central Analytical Laboratory and a 10,000/1,000 Clean Room equipped
with the latest in electronic test equipment.  Part of the new clean room and
its equipment is expected to be contracted by Ovonyx, Inc., a joint venture
among ECD, Tyler Lowrey, Intel Corporation and other investors to
commercialize ECD's OUM technology.  ECD will utilize the clean room for next
generation product development work.  The Central Analytical Laboratory
provides services to all of ECD and its joint ventures.
    The new headquarters is an approximately 50,000 square foot single story
high bay leased building in Rochester Hills at 2956 Waterview in a modern
industrial park development.  Approximately half of the building is office,
meeting and demonstration room space with the balance devoted to the Central
Analytical Laboratory, Clean Room and workspace.  About 80 people will occupy
the building when the move is completed.
    ECD is the leader in the synthesis of new materials and the development of
advanced production technology and innovative products.  It has pioneered and
developed enabling technologies leading to new products and production
processes based on amorphous, disordered and related materials, with an
emphasis on advanced information technologies and alternative energy,
including photovoltaics, fuel cells, hydride batteries and hydride storage
materials capable of storing hydrogen in the solid state for use as a feed
stock for fuel cells or internal combustion engines or as an enhancement or
replacement for any type of hydrocarbon fuel.  ECD designs and builds
manufacturing machinery that incorporates its proprietary production
processes, maintains ongoing research and development programs to continually
improve its products and develops new applications for its technologies.  ECD
holds the basic patents in its fields.  ECD's web site address is
http://www.ovonic.com .
    This release may contain forward-looking statements within the meaning of
the Safe Harbor Provisions of the Private Securities Litigation Reform Act of
1995.  Such forward-looking statements are based on assumptions which Texaco
and ECD, as of the date of this release, believe to be reasonable and
appropriate.  Texaco and ECD caution, however, that the actual facts and
conditions that may exist in the future could vary materially from the assumed
facts and conditions upon which such forward-looking statements are based.

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