Hybrids, Plug-Ins and All-Electric Vehicles

NEW CASTLE, Pa., Feb. 2 /PRNewswire-FirstCall/ -- Axion Power International, Inc. (OTC Bulletin Board: AXPW), a leading developer of battery technologies and advanced energy storage devices, today announced that the potential energy efficiencies and cost savings its advanced lead-acid battery will bring to the rapidly-expanding electric car market has earned the Company an award from the Pennsylvania Alternative Fuels Incentive Grant program. The $800,000 first-year grant, which was announced by Governor Edward Rendell on January 29th, is part of the State's overall effort to invest in businesses that are creating important and innovative clean energy and bio-fuels technologies.

The award proceeds will be used to demonstrate the advantages the Axion proprietary PbC(TM) battery technology provides in a variety of electric vehicle types including: hybrids (HEVs), such as the popular Toyota Prius; "plug-ins" (PHEVs) used in commuter, delivery and other vehicles; and in EV's and converted (from combustion engine operation) EV's. The PbC battery technology, which replaces simple lead-based negative electrodes used by other manufacturers with its more sophisticated activated carbon electrode assemblies, has significantly enhanced performance characteristics when compared with other advanced lead-acid batteries. Those enhancements include deeper cycling, longer life, elimination of sulfation and shedding on the negative plate, lighter weight, and easier more rapid recharging capabilities.

"This grant acknowledges that our PbC technology has a significant role to play in the development of electric vehicles and in the rapidly expanding global market for these non-carbon-generating, energy-efficient vehicles," said Axion Power's CEO Thomas Granville. "PbC batteries have inherent advantages that they share with lead-acid batteries with respect to safety and cost savings when compared with other energy storage technologies. Our advanced carbon-enhanced products also have advantages associated with: manufacture on existing battery lines and sustainability, because the raw materials used are among the most abundant on the planet. Our product will also be very environmentally friendly because it will be easy and inexpensive to recycle. The grant is another important milestone for us. It supports our vision as we demonstrate how our technology will make electric cars, and electric car conversions, more affordable and renewable. We believe that EVs of all types are the most important automotive innovations in the world today."

The goals of the Alternative Fuels Incentive Grant program, as announced by Governor Rendell, are to "expand markets for emerging technologies and ultimately make them more affordable for families and businesses." The program also aims to "create jobs, clean the environment and save consumers tens of millions of dollars a year in energy costs."

About Axion Power International, Inc.

Axion has developed and patented a next generation energy storage device that won the prestigious Frost & Sullivan Technology Award for North America in the field of lead-acid batteries. According to Frost & Sullivan, Axion's new PbC(TM) batteries have "the potential to revitalize the lead-acid battery industry by breathing new life into an established technology that is not well suited to the requirements of important new applications like hybrid electric vehicles and renewable power."

Axion Power International Inc. is the industry leader in the field of lead-acid-carbon energy storage technologies. Axion believes this new battery technology is the only class of advanced battery that can be assembled on existing lead-acid battery production lines throughout the world without significant changes to production equipment and fabrication processes. It also believes it will be able to manufacture carbon electrode assemblies in volume at low cost using standard automated production methods that are commonly used in other industries. If and when its electrode manufacturing methods are fully developed, Axion believes it will be able to sell carbon electrode assemblies as virtual plug-and-play replacements for lead-based negative electrodes used by all other lead-acid battery manufacturers. Axion's goal is to become the leading supplier of carbon electrode assemblies for the lead-acid battery industry. For more information, visit www.axionpower.com.

    Contacts
    Axion Power International
    Kelly Gubish
    kgubish@axionpower.com
    (724) 654 9300
    Allen & Caron Inc
    Rudy Barrio (Investors)
    r.barrio@allencaron.com
    (212) 691-8087
    Brian Kennedy (Media)
    brian@allencaron.com
    (212) 691-8087

SOURCE Axion Power International, Inc.