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Axion Announces Demonstration Projects With the U.S. Army and Penn State University
Thursday February 21, 11:13 am ET

NEW CASTLE, Pa., Feb. 21 /PRNewswire-FirstCall/ -- Axion Power International, Inc. (OTC Bulletin Board: AXPW - News) said today that it has agreed to provide PbC(TM) Ultracapacitors to the Applied Research Laboratory at Penn State University for testing in conjunction with the U.S. Army's Tank and Automobile Command (TACOM). Tom Granville, CEO of Axion made the announcement at the Company's presentation at CleanEquity Monaco 2008 conference (http://www.cleanequitymonaco.com)
The TACOM project will cover a broad range of established and emerging military vehicle applications including starting, lighting and ignition systems (SLI) for diesel engines that operate in extreme weather conditions; hybrid electric vehicle drive systems; silent watch systems; and other military applications where the lighter weight, higher power, and longer cycle-life of Axion's PbC Ultracapacitors will improve the performance of existing systems and facilitate the roll out of new systems. Testing will begin immediately with the shipment of several different versions of PbC Ultracapacitors to the Applied Research Laboratory at Penn State.

Dr. Edward Buiel, Axion's CTO said, "Military applications present a number of unique challenges for battery systems. Military vehicles must operate well in sub-freezing temperatures where newer battery technologies have difficulties starting vehicles. New requirements for the operation of high-power electronic loads for communications, surveillance, and other operations when the engine is not running are placing significant new demands on developing battery technology. We believe our TACOM demonstration project is likely to identify several military applications where the cold weather performance, deep discharge capacity and long cycle-life of our PbC Ultracapacitors will be particularly desirable. "

In addition to Axion's efforts to develop PbC Ultracapacitor solutions to existing and emerging military applications, Axion has begun work on a complementary project to replace the nickel metal hydride battery systems in a pair of Honda Civic hybrids with a less expensive and comparably sized PbC alternative. Testing protocols are being finalized with Penn State and will include data from upwards of 100,000 miles of road tests. In the second phase of the hybrid project, Axion will add Toyota Prius and other vehicles to the test regime. Commenting on the hybrid project, Tom Granville said, "The first hybrids are now reaching the point where the owners will need to replace their battery packs at significant cost. We believe we will be able to offer a comparable PbC alternative at significantly lower cost."

About Axion Power International, Inc.

Axion has developed and patented a next generation energy storage device that won the prestigious 2006 Frost & Sullivan Technology Innovation Award for North America in the field of lead-acid batteries. According to Frost & Sullivan, Axion's new PbC(TM) has "the potential to revitalize the lead-acid battery industry by breathing new life into an established technology that was not well-suited to the requirements of important new applications like hybrid electric vehicles and renewable power."

PbC batteries use sophisticated carbon electrode assemblies to replace the simple lead-based negative electrodes used by other lead-acid battery manufacturers. The resulting device offers energy storage approaching lead- acid batteries, coupled with far longer cycle-life and power output approaching super-capacitors. These low-cost devices recharge rapidly and are environmentally friendly because they use 40% less lead. Axion has been producing prototype PbC Ultracapacitors at its lead-acid battery plant in New Castle, Pennsylvania for more than a year using the same cases, positive electrodes, separators, electrolytes and manufacturing equipment used in its other lead-acid battery lines. The only notable manufacturing difference is the use of Axion's proprietary carbon electrode assemblies instead of lead- based negative electrodes.

Axion believes its PbC Ultracapacitors are the only class of advanced energy storage device that can be assembled on existing lead-acid battery production lines 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 production methods that are commonly used in other industries. 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 the 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.