Hybrid Fuel Systems Posts Revenue and Earnings for 2003 and 2002 and Reports Initiatives Undertaken During 2004

TAMPA, Fla.--Aug. 1, 20046, 2004--Hybrid Fuel Systems, Inc., ("Hybrid" or the "Company") (OTC:HYFS) today announced financial results for the years ended December 31, 2003 and 2002. In addition, the Company disclosed a number of initiatives commenced during the first eight months of 2004.

                                           2003         2002
      Revenue                         $   155,354  $    28,362
      Net Loss                        $  (413,820) $  (741,575)
      Net Loss per Share              $     (0.03) $     (0.06)
      Number of common shares          12,054,072   11,741,317

"The past eight months have been a period of transition for Hybrid and we have inserted new programs effecting our technology, market positioning, pricing and financial posture," said CEO Mark Clancy. "Relating to our technology, during this period, we have completed the development cycle and initiated the EPA/CARB verification of our Digital System. Based on our extensive research and development over the past eight months, we are now working to expand our family of five patents presently covering over 99 claims.

"From a marketing perspective, we have targeted the private sector instead of relying exclusively on environmental-based grants. Pre-verification, this pathway has led us to South America where natural gas is plentiful and represents a substantial economic saving over the use of diesel. During this same period, we have contracted with two domestic firms for the sale of 140 of our kits. Post-verification we anticipate an increased eligibility and demand for our Digital System in the domestic market. During this period, we negotiated and settled most of the legacy liabilities and we have re-engaged the professionals required to ensure we are able to meet our obligations. With the submission of this Form 10KSB, we are now engaged in the application process to migrate from the pink sheets to the over-the-counter marketplace as soon as practical," concluded Mr. Clancy.

About Hybrid Fuel Systems, Inc. - Hybrid was formed in 1996 to commercialize retrofit systems for the conversion of diesel stationary or vehicular engines to non-petroleum based fuels such as natural gas. The Company's technology is based on five patents and one patent pending.

About Hybrid's conversion technology. Hybrid currently markets alternative fuel conversion kits for diesel fuel engines based on a family of patents covering 99 specific claims. The Company's unique, non-invasive system encompasses the hardware and an electronic control unit. Hybrid's Digital System is compatible with various engine families with only minor modification to the electronic control unit. The Company's dual fuel conversion technology utilizing natural gas has demonstrated diesel vehicles can be successfully and economically retrofitted. No engine modifications are required and vehicles retain the diesel engine qualities of performance, torque, power, and efficiency. On-the-road results indicate diesel fuel consumption can be offset by as much as 85% with natural gas. When operating with natural gas, Hybrid's system has proven to significantly reduce CO2 greenhouse gas and NOx emissions. Since the system is generic, it can be applied to various diesel engine vehicles in a fleet.

For more information contact Mark Clancy, Chief Executive Officer (813)-624-5515 or visit the Company's website at http://www.hybridfuelsystems.com.