VLNC Valence Technology, Inc. (MM)

Valence Technology, Inc. (Nasdaq:VLNC), a provider of advanced, phosphate lithium-ion battery systems, has partnered with plug-in hybrid conversion company EnergyCS to deliver a fuel-efficient concept car for evaluation by the Sacramento Municipal Utility District (SMUD). The California-based electric utility company is testing the Valence U-Charge� powered plug-in to determine its fuel economy and fleet adaptability. SMUD recently completed its first 1000 miles of testing and will continue to measure the vehicle�s performance over the next 2-3 years. Data from the first 1000 miles and additional testing this summer will be presented along with other early adopter fleet data this fall. �This early adopter plug-in hybrid Prius demonstration project is designed to illustrate the possibility and provide real world data for public policy making decisions and scientific evaluation by the industry,� said Pete Nortman, president of EnergyCS. �SMUD�s testing is gathering priceless information regarding the real world impacts toward petroleum reduction and diversification of renewable energy from the grid into our transportation mix. We�re also intrigued by the secondary quality of life improvements a plug-in can provide.� SMUD�s pre-commercial plug-in hybrid demonstrator is based on a 2005 Toyota Prius that has been outfitted with Valence�s Saphion� phosphate rechargeable batteries and custom electronics designed by EnergyCS to achieve increased efficiency and expanded operation in all electric or zero emission operating modes. "SMUD is excited to be testing one of the first Energy CS Plug-in Hybrids using lithium ion batteries,� said Bill Boyce, SMUD electric transportation supervisor. �These types of advanced energy storage technologies will be important for the future." The U-Charge Power System inside the EnergyCS plug-in hybrid electric vehicle (PHEV) is based on Valence�s proprietary Saphion technology. Using a cathode material that replaces metal-oxides with phosphates, this technology creates batteries that are safer, more chemically stable and environmentally friendly. These batteries provide more energy with less weight and last longer than nickel metal-hydride (NiMH) and lead-acid batteries. In addition, they are maintenance-free and come in 12-volt, standard lead-acid battery sizes. �We are excited to be involved with EnergyCS and SMUD,� said Jim Akridge, President and CEO for Valence Technology, Inc. �These cars are paving the way for a new paradigm of real-world vehicle solutions � fleet transportation that is more efficient and utilizes a diversified energy mix which includes renewable and other environmentally friendly technologies.� In June 2006, SMUD began evaluating the PHEV technology within its fleet environment to gather data that could also be compared to the performance of a stock Toyota Prius. Though SMUD plans to officially release its results later this year, they have already found some encouraging numbers. The plug-in Prius uses 1/4 of a kilowatt-hour per mile, which is the equivalent of $1.48 per gallon, in all-electric mode. Compared to today's gasoline prices in California that are more than $2.45 per gallon, the technology looks promising. About Sacramento Municipal Utility District The sixth largest publicly owned utility company, Sacramento Municipal Utility District (SMUD) provides Sacramento County and a small part of Placer County with a community run alternative to electric utility services that is overseen by an elected board of directors. For 60 years, SMUD has offered customers a reliable source of electricity at competitive rates that are consistently lower than investor-owned utilities in the state. SMUD is committed to providing users energy solutions that meet their needs as well as becoming a positive force in promoting community benefits. About EnergyCS Energy Control Systems Engineering (EnergyCS) is a privately held company based in Monrovia, California. It provides leading edge consulting, design and prototyping services for system integration, management and monitoring of electrochemical energy systems such as batteries and fuel cells for utilities, OEMs and Tier 1 suppliers. The company is focused on and particularly interested in applications in the areas of EV and HEV transportation and alternative energy on systems from 24 to 1000 VDC. About Valence Technology, Inc. Valence Technology developed and markets Saphion� technology, the industry�s first commercially available, safe, large-format phosphate 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; Las Vegas, Nevada; Mallusk, Northern Ireland 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. Safe Harbor Statement Some information included in this press release contains forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Act of 1934. Such statements include information relating to business activities and project development. These statements can sometimes be identified by the use of forward-looking words such as �may,� �will,� �anticipate,� �estimate,� �except,� �scheduled,� or �intend� and similar expressions. Such forward-looking information involves important risks and uncertainties that could significantly affect anticipated results in the future and, accordingly, such results may differ materially from those expressed in any forward-looking statements made by or on behalf of Valence. These and other risk factors that could affect actual results are discussed in Valence�s periodic reports filed with the Securities and Exchange Commission, including its Report on Form 10-Q for the quarter ended June 30, 2006, and the reader is directed to these statements for a further discussion of important factors that could cause actual results to differ materially from those in the forward-looking statements. The forward-looking statements included in this press release are made only as of the date of this release. Valence does not undertake any obligation to update or supplement any forward-looking statements to reflect subsequent events or circumstances and cannot assure that projected results or events will be achieved. Valence Technology, Inc. (Nasdaq:VLNC), a provider of advanced, phosphate lithium-ion battery systems, has partnered with plug-in hybrid conversion company EnergyCS to deliver a fuel-efficient concept car for evaluation by the Sacramento Municipal Utility District (SMUD). The California-based electric utility company is testing the Valence U-Charge(R) powered plug-in to determine its fuel economy and fleet adaptability. SMUD recently completed its first 1000 miles of testing and will continue to measure the vehicle's performance over the next 2-3 years. Data from the first 1000 miles and additional testing this summer will be presented along with other early adopter fleet data this fall. "This early adopter plug-in hybrid Prius demonstration project is designed to illustrate the possibility and provide real world data for public policy making decisions and scientific evaluation by the industry," said Pete Nortman, president of EnergyCS. "SMUD's testing is gathering priceless information regarding the real world impacts toward petroleum reduction and diversification of renewable energy from the grid into our transportation mix. We're also intrigued by the secondary quality of life improvements a plug-in can provide." SMUD's pre-commercial plug-in hybrid demonstrator is based on a 2005 Toyota Prius that has been outfitted with Valence's Saphion(R) phosphate rechargeable batteries and custom electronics designed by EnergyCS to achieve increased efficiency and expanded operation in all electric or zero emission operating modes. "SMUD is excited to be testing one of the first Energy CS Plug-in Hybrids using lithium ion batteries," said Bill Boyce, SMUD electric transportation supervisor. "These types of advanced energy storage technologies will be important for the future." The U-Charge Power System inside the EnergyCS plug-in hybrid electric vehicle (PHEV) is based on Valence's proprietary Saphion technology. Using a cathode material that replaces metal-oxides with phosphates, this technology creates batteries that are safer, more chemically stable and environmentally friendly. These batteries provide more energy with less weight and last longer than nickel metal-hydride (NiMH) and lead-acid batteries. In addition, they are maintenance-free and come in 12-volt, standard lead-acid battery sizes. "We are excited to be involved with EnergyCS and SMUD," said Jim Akridge, President and CEO for Valence Technology, Inc. "These cars are paving the way for a new paradigm of real-world vehicle solutions - fleet transportation that is more efficient and utilizes a diversified energy mix which includes renewable and other environmentally friendly technologies." In June 2006, SMUD began evaluating the PHEV technology within its fleet environment to gather data that could also be compared to the performance of a stock Toyota Prius. Though SMUD plans to officially release its results later this year, they have already found some encouraging numbers. The plug-in Prius uses 1/4 of a kilowatt-hour per mile, which is the equivalent of $1.48 per gallon, in all-electric mode. Compared to today's gasoline prices in California that are more than $2.45 per gallon, the technology looks promising. About Sacramento Municipal Utility District The sixth largest publicly owned utility company, Sacramento Municipal Utility District (SMUD) provides Sacramento County and a small part of Placer County with a community run alternative to electric utility services that is overseen by an elected board of directors. For 60 years, SMUD has offered customers a reliable source of electricity at competitive rates that are consistently lower than investor-owned utilities in the state. SMUD is committed to providing users energy solutions that meet their needs as well as becoming a positive force in promoting community benefits. About EnergyCS Energy Control Systems Engineering (EnergyCS) is a privately held company based in Monrovia, California. It provides leading edge consulting, design and prototyping services for system integration, management and monitoring of electrochemical energy systems such as batteries and fuel cells for utilities, OEMs and Tier 1 suppliers. The company is focused on and particularly interested in applications in the areas of EV and HEV transportation and alternative energy on systems from 24 to 1000 VDC. About Valence Technology, Inc. Valence Technology developed and markets Saphion(R) technology, the industry's first commercially available, safe, large-format phosphate 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; Las Vegas, Nevada; Mallusk, Northern Ireland 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. Safe Harbor Statement Some information included in this press release contains forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Act of 1934. Such statements include information relating to business activities and project development. These statements can sometimes be identified by the use of forward-looking words such as "may," "will," "anticipate," "estimate," "except," "scheduled," or "intend" and similar expressions. Such forward-looking information involves important risks and uncertainties that could significantly affect anticipated results in the future and, accordingly, such results may differ materially from those expressed in any forward-looking statements made by or on behalf of Valence. These and other risk factors that could affect actual results are discussed in Valence's periodic reports filed with the Securities and Exchange Commission, including its Report on Form 10-Q for the quarter ended June 30, 2006, and the reader is directed to these statements for a further discussion of important factors that could cause actual results to differ materially from those in the forward-looking statements. The forward-looking statements included in this press release are made only as of the date of this release. Valence does not undertake any obligation to update or supplement any forward-looking statements to reflect subsequent events or circumstances and cannot assure that projected results or events will be achieved.