Ballard to File Final Prospectus for Equity Financing

    VANCOUVER, British Columbia--Dec. 18, 2002-- Further to its release of December 11, 2002, Ballard Power Systems (TSX:BLD) announced that later today it expects to file the final prospectus relating to the equity offering underwritten by a syndicate led by RBC Capital Markets as bookrunner and CIBC World Markets as co-lead manager. The common shares were sold on a "bought deal" basis whereby 7.7 million common shares of Ballard will be issued on closing at a price of CDN $20.25 per common share or US $13.016 per common share for total gross proceeds of approximately CDN $155.9 million or US $100.2 million based on exchange rates as at December 11, 2002. The underwriters' option to purchase up to an additional 1.9 million common shares was not exercised.
    The issue is being made by way of a prospectus filed in all provinces of Canada and a registration statement filed in the United States, and is subject to regulatory approval. Closing of the offering is expected on or about December 30, 2002.
    The net proceeds of the offering will be added to working capital and principally used for research and product development for portable power generation, small to mid-sized stationary power generation and transportation applications, the development of high volume manufacturing processes and acquisition of related equipment and for general corporate purposes, including the development of product distribution and service capabilities.
    A registration statement relating to these securities has been filed with the U.S. Securities and Exchange Commission but has not yet become effective and a final prospectus relating to the securities is expected to be filed with Canadian securities authorities. These securities may not be sold, nor may offers to buy be accepted, in the United States or to or from U.S. persons, prior to the time the registration statement becomes effective. This communication shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the securities in any state in the United States in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such state.
    This release contains forward-looking statements that are based on the beliefs of Ballard's management and reflect Ballard's current expectations as contemplated under the Safe Harbor provisions of the U.S. Private Securities Litigation Reform Law of 1995. When used in this release, the words "estimate", "project", "believe", "anticipate", "intend", "expect", "plan", "predict", "may", "should", "will", the negative of these words or such other variations thereon or comparable terminology are intended to identify forward-looking statements. Such statements reflect the current views of Ballard with respect to future events based on currently available information and are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated in those forward-looking statements.
    Ballard Power Systems is recognized as the world leader in developing, manufacturing and marketing zero-emission proton exchange membrane fuel cells. Ballard is commercializing fuel cell engines for transportation applications and fuel cell systems for portable and stationary products. Ballard is also commercializing electric drives for fuel cell and other electric vehicles, power conversion products, natural gas and hydrogen generator sets and is a Tier 1 automotive supplier of friction materials for power train components. Ballard's proprietary technology is enabling automobile, bus, electrical equipment, portable power and stationary product manufacturers to develop environmentally clean products for sale. Ballard is partnering with strong, world-leading companies, including DaimlerChrysler, Ford, EBARA, ALSTOM and FirstEnergy, to commercialize Ballard(R) fuel cells. Ballard has supplied fuel cells to Honda, Nissan, Volkswagen, Yamaha, Cinergy and Coleman Powermate, among others.
    Ballard, the Ballard logo and Power to Change the World are registered trademarks of Ballard Power Systems Inc.