NEW CASTLE, Pa., May 5 /PRNewswire-FirstCall/ -- Axion Power International, Inc. (OTC Bulletin Board: AXPW), the developer of advanced lead-carbon PbC® batteries, announced today that it is completing final preparations for construction of a second generation automated production line for its proprietary PbC® negative electrode. The new turnkey production line, as well as two 2nd generation stations for the existing automated production line, is being designed by a respected engineering firm with years of experience in design and build for Fortune 500 companies. The first new station will be on line in the second quarter of this year, with the second and final redesigned station to follow in the third quarter. The full new second production line is expected to be completed and in operation by the end of the fourth quarter of 2010.

CEO Thomas Granville said that the experience of designing the first production line was a sometimes difficult educational experience. "When you set out, with limited funds, to design a production facility to make something that's never been made in quantity before, there are significant challenges," Granville said. "We had several 'start, stop, start over, modify' instances along the road but, as a result, we now are extremely knowledgeable about manufacturing our product and will greatly benefit from this experience. The incremental experience will be invaluable to our new design firm. We raised $26M at the end of 2009 for the express purpose of increasing our capacity and improving the methods of manufacturing our PbC product. This raise enabled us to engage the 'design and build' expertise we need to put line 2, and future production lines, in place at our facility in New Castle."

Granville said that the modified first production line will produce material that is more than adequate for existing orders. "But if we continue to grow as anticipated, we will need the volume provided by the second and third production lines."

The Company has applied for $26M in grants to match the $26M in private equity they raised in December. Receipt of this money would help underwrite a further expansion of the Axion manufacturing facility beyond the already-financed second, third and even fourth production lines. Granville said that in order to expand to the limit of the capacity of the local facilities, they would need that additional $26 million over the next few years. "If we are successful in keeping pace with our expansion plan and gain substantial market acceptance of our product, over the next couple of years, we will surely need that additional capacity to supply such dramatic growth. There are jurisdictions here and abroad that are interested in luring us from New Castle, but we don't see ourselves leaving our present facilities unless demand for our product is so great that our production capacity needs can't be met here in Pennsylvania."

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® 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 future goal, after filling their plant's lead-carbon battery production capacity, is to become the leading supplier of carbon electrode assemblies for the global lead-acid battery industry.

For more information, visit www.axionpower.com

Forward-looking Statements

Certain statements in this Press Release are "forward-looking statements" within the meaning of the Private Securities Litigation Act of 1995. These forward-looking statements are based on our current expectations and beliefs and are subject to a number of risk factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Such risks and uncertainties include the risk for the Company to complete its development work, as well as the risks inherent in commercializing a new product (including technology risks, market risks, financial risks and implementation risks, and other risks and uncertainties affecting the Company), as well as other risks that have been included in filings with the Securities and Exchange Commission, all of which are available at www.sec.gov. We disclaim any intention or obligation to revise any forward-looking statements, including, without limitation, financial estimates, whether as a result of new information, future events, or otherwise.

Contacts


Axion Power International

Thomas Granville

(724) 654 9300


Allen & Caron Inc

Rudy Barrio (Investors)

r.barrio@allencaron.com

(212) 691-8087


Len Hall (Media)

len@allencaron.com

(949) 474-4300



SOURCE Axion Power International, Inc.