Valence Technology Received Follow-on Order from Alternativ Canada for Electric Vehicle Fleet Application: U-Charge Power System Triples Driving Distance

AUSTIN, Texas--Dec. 1, 2004--Valence Technology, Inc. , a leader in the development and commercialization of Saphion(R) technology, the only safe large format Lithium-ion rechargeable battery technology, has received a second order from Alternativ Canada, a developer of alternative energy technologies, for field trials of its U-Charge(TM) Power Systems. Alternativ Canada has purchased the U-Charge systems to power a fleet of electric Hyundai Accents.

Alternativ Canada selected the U-Charge systems over lead acid batteries, which the company used in the past. With Valence's U-Charge systems, the cars will increase their range from approximately 30 kilometers to 100 kilometers before needing to recharge. The U-Charge is superior to lead acid batteries in other key areas including: lower weight, higher energy density, smaller footprint (occupied less space under the hood) and longer life.

"With the growing global energy crisis and rising environmental concerns, Valence has the ideal green solution for fleets of alternatively-powered vehicles," said Valence CEO Stephan Godevais. "Our U-Charge product provides triple the driving distance, higher performance, reduced weight and space savings, all in a 'green package', allowing Alternativ Canada to make what was once only a vision into a reality."

Alternativ Canada converts conventional combustion engine cars into electric cars to decrease greenhouse effect emissions and give traditional gas cars a new life by converting them to Zero Emission Vehicles (ZEV). Alternativ Canada will lease the electric cars back to businesses throughout Canada for making local deliveries. Alternativ Canada is working to convert a 100-car fleet within the next year.

In addition to the ecological benefits, this conversion provides cost savings through decreased vehicle maintenance. The Alternativ Canada cars operate under a custom maintenance plan that includes the use of special transmission and power steering oils made from animal and vegetable residue that are 100 percent biodegradable and non-corroding. Taking these kinds of steps helps to ensure Alternativ Canada's objective to produce products for a cleaner world.

"No other battery on the market could meet our design goals," said Directeur General of Alternativ Canada, Steve Labarre. "We were thrilled to find Valence's U-Charge battery. It gave us exactly what we needed and now- an easy to integrate power system with outstanding performance that took up less space, was safe and was able to last 100 km. without charging," continued Steve Labarre.

Until recently, lead acid was the battery of choice for the electric vehicle industry. However its weight, size and hazard potential make it a less than an ideal option. Valence is the first to commercialize a large format Lithium-ion product. Valence's Saphion-based technology contains no heavy metals, negating any of the disposal issues that plague other technologies. Also, as Saphion technology is a Lithium-ion chemistry, its superior performance ensures that its cycle life and lack of "memory effect" will keep the battery operating longer than lead acid alternatives.

About the U-Charge Power System

The U-Charge Power System is a family of Lithium-ion energy storage systems that offers superior run-time, requires little to no maintenance, and delivers greater energy density, reliability, long life and intrinsic safety. The U-Charge system powers a variety of motive applications including hybrid and electric vehicles, scooters and wheelchairs. Built on a phosphate cathode core, the U-Charge's Saphion technology is intrinsically safe and environmentally friendly. The U-Charge system combines the power and performance of Lithium-ion with Saphion technology's safety characteristics to challenge the dominance of lead acid batteries.

About Alternativ Canada

Alternativ Canada's vision is to give to the automotive business a greener image. In doing this, the company wants to reverse the actual environmental situation, a situation that is not encouraging at all for the future generation. Alternativ Canada's mission is to convert and to rent non-polluting cars to delivery businesses and to offer them a maintenance service. Alternativ Canada's clients are concerned about protecting the wildlife combined with supporting the local economy. These goals meet Alternativ Canada's business values. The company began offering this service in January 2004, although its founders had begun envisioning this more than 18 months before. Located in Quebec, Alternativ Canada works with specialists from fields such as environmental, engineering, electronics, computing, business and administration to ensure that the company will always be effective and work with state-of-the-art technologies. For more information, go to www.alternativ.ca.

About Valence Technology, Inc.

Valence is a leader in the development and commercialization of Saphion(R) technology, the only safe large format Lithium-ion rechargeable battery technology. Valence holds an extensive, worldwide portfolio of issued and pending patents relating to its Saphion technology and Lithium-ion rechargeable batteries. The company has facilities in Austin, Texas, Henderson, Nevada and Suzhou, China. Valence is traded on the Nasdaq SmallCap Market under the symbol VLNC and can be found on the Internet at www.valence.com.

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