SOURCE: Electro Energy Inc.

July 28, 2006 11:09 ET

Electro Energy Joins Plug-In Hybrid Development Consortium

DANBURY, CT -- (MARKET WIRE) -- July 28, 2006 -- Electro Energy Inc. (NASDAQ: EEEI), a developer and manufacturer of advanced rechargeable batteries, announced today that it has joined the Plug-In Hybrid Development Consortium (www.hybridconsortium.org).

The Consortium, founded in August 2005 by Raser Technologies, Inc. (NYSE: RZ), Pacific Gas and Electric (NYSE: PCG), Maxwell Technologies (NASDAQ: MXWL), and Electrovaya (TSX: EFL), brings together component suppliers working to accelerate the commercial production of plug-in hybrid electric vehicles (PHEVs). Consortium members cooperate to identify specifications, develop compatible technologies and deliver innovative new system solutions that make affordable plug-in hybrids possible.

EEEI's proprietary bi-polar rechargeable nickel-metal hydride (BP-NiMH) battery currently powers a prototype plug-in hybrid vehicle which is an adapted Toyota Prius, developed in cooperation with a Consortium member, the California Cars Initiative (CalCars).

The Company's demonstration vehicle made news this spring when it appeared at several high-profile events, including one that took place in May in Washington, D.C., as national gas prices soared. A number of senators and representatives, including members of the House Science Subcommittee on Energy, test-drove the car and learned first-hand of the substantial fuel savings it promises.

Electro Energy's vehicle is capable of driving 20 to 25 miles on a single battery charge without using any gasoline, the equivalent of over 100 miles per gallon of fuel economy. Further driving range is possible in the normal hybrid operating mode. Experts estimate that PHEV electrical energy costs would be less than 3 cents per mile in all-electric mode, compared to 12-14 cents per mile for gasoline priced at about $3 per gallon.

"We are delighted to welcome Electro Energy as a member of our organization," said David West, Vice President Marketing for Raser Technologies. "EEEI has collaborated with Consortium member CalCars throughout this year to incorporate its innovative battery technology into a prototype PHEV. The Company has contributed to significant achievements in just 11 months."

Michael E. Reed, CEO of Electro Energy, said, "We are very pleased to join the creative companies that have formed the Plug-In Hybrid Development Consortium. Their innovative leadership has become a primary driver for a new kind of vehicle that will greatly improve fuel economy for consumers, reduce air-polluting emissions and reduce our imports of foreign oil. Electro Energy is proud to be counted among them."

About Electro Energy Inc.

Electro Energy Inc., headquartered in Danbury, Connecticut, was founded in 1992 to develop, manufacture and commercialize high-powered, rechargeable bipolar nickel-metal hydride batteries for use in a wide range of applications. Its Colorado Springs operation supplies aerospace-grade high quality nickel cadmium batteries and components for satellites, aircraft and other specialty applications. EEEI is also developing high power lithium rechargeable batteries utilizing the Company's proprietary bi-polar design. EEEI has recently acquired significant manufacturing assets near Gainesville, Fla., to accelerate commercialization of its battery technology. For further information, please visit www.electroenergyinc.com.

Certain statements in this news release may contain forward-looking information within the meaning of Rule 175 under the Securities Act of 1933 and Rule 3b-6 under the Securities Exchange Act of 1934, and are subject to the safe harbor created by those rules. All statements, other than statements of fact, included in this release, including, without limitation, statements regarding potential future plans and objectives of the companies, are forward-looking statements that involve risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Factors that could cause actual results to differ materially from those in the forward-looking statements include, among other things, the following: general economic and business conditions; competition; unexpected changes in technologies and technological advances; ability to commercialize and manufacture products; results of experimental studies; research and development activities; changes in, or failure to comply with, governmental regulations; and the ability to obtain adequate financing in the future. This information is qualified in its entirety by cautionary statements and risk factors disclosure contained in certain of Electro Energy Inc.'s Securities and Exchange Commission filings available at http://www.sec.gov.

Pursuant to a December 1, 2004 agreement, Consulting For Strategic Growth I, Ltd. ("CFSG1") provides Electro Energy with consulting, business advisory, investor relations, public relations and corporate development services, for which CFSG1 receives a fixed monthly fee for the duration of the agreement. Independent of CFSG1's receipt of cash compensation from Electro Energy, CFSG1 may choose to purchase the common stock of Electro Energy and thereafter sell those shares at any time it deems appropriate to do so. For more information, please visit www.cfsg1.com.

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