Scooters With U-Charge(R) XP Power Systems To Be Utilized by Major European Postal Service

AUSTIN, Texas--July 6, 2006--Oxygen S.p.A., a provider of electric transporters, has placed orders for the new U-Charge(R) XP battery systems, based on Saphion(R) lithium-ion technology, from Valence Technology, Inc. . The Italian company selected Valence batteries to power a new line of electric scooters designed for delivery fleets across Europe. Oxygen's initial fleet deployment will start this summer with a major European Postal Service. Saphion technology is the industry's first commercially available, safe, large-format lithium-ion rechargeable battery technology.

Oxygen's electric transporters are designed for businesses and commuters who require reliable and economical transportation, but are ideal for delivery services in congested urban areas. Valence's Saphion technology has enabled Oxygen to deliver a solution where their customers can make deliveries for the entire daily route without having to recharge the battery. All Oxygen customers will enjoy a cost-effective and greener transportation solution with minimal maintenance.

"We selected Valence's batteries because they support the range, reliability and longevity that our customers have come to expect from Oxygen transporters," said Raffaello Locatelli, co-founder and director of Oxygen S.p.A. "We are excited to offer our customers clean-running and cost-effective transportation."

Oxygen will use the U-Charge XP Power System in its cargo scooters, which are designed to address the need for low-cost, highly efficient transportation in congested urban areas where quiet, pollution-free, low maintenance vehicles have gained preference. The Oxygen electric scooters feature advanced technologies, such as brushless motor, electronic engine control and regenerative braking to recharge the battery.

The Oxygen scooters offer a comfortable ride and excellent handling, a cargo box that can be custom designed to store a variety of commodities, such as parcels, and a range of up to 85 miles.

"We have built a strong reputation with Oxygen in delivering a timely and effective power solution for their electric transporters," said Dean Bogues, President of Worldwide Sales & Marketing, Valence Technology, Inc. "Oxygen is another example of an OEM which has moved from evaluation/prototyping to production level deployment of our battery systems. We expect more companies will embrace the benefits of lithium-ion in large format applications and select Valence given the safety and benefits of Saphion technology."

The U-Charge XP Power Systems are capable of peak power rates of 500 to 1700 continuous watts, depending on the model, and are conveniently packaged in standard lead-acid sizes and operate at standard lead-acid voltage ranges. The UEV model is a unique size that has a taller profile for tighter footprint compartments and an 18-volt nominal rating. Each model includes integrated battery monitoring electronics and a communications port to access battery data. As many as 30 of these battery systems can be connected in series for very high voltage applications such as pure electric vehicles, hybrid electric vehicles, marine applications, and power back-up applications.

About Oxygen S.p.A.

Oxygen develops, manufactures, markets and distributes environmentally friendly, technologically advanced light electric and hybrid vehicles. Its advanced electric transporters compete directly with gas equivalent products, offering equal to superior overall performance, while eliminating vehicle fuel consumption and emissions. Oxygen's commercial vehicles address the needs of postal and parcel delivery companies, police organizations, food delivery chains, and traditional and e-commerce retailers. The company's vehicles are currently being tested by some of the largest postal delivery companies in the world. Oxygen can be found on the Internet at www.oxygenworld.it.

About Valence Technology, Inc.

Valence Technology developed and markets Saphion(R) technology, the industry's first commercially available, safe, large-format Lithium-ion rechargeable battery technology. Valence Technology 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 and Shanghai, China. Valence is traded on the Nasdaq SmallCap Market under the symbol VLNC and can be found on the Internet at www.valence.com.