Troy, Mich., July 18, 2001
-- Texaco (NYSE:TX) and Energy Conversion Devices,
Inc. (NASDAQ:ENER) today announced the formation of
Texaco Ovonic Battery Systems, a new strategic alliance
to bring advanced nickel metal hydride (NiMH) batteries
into widespread commercial production as well as to
further develop them for non-automotive applications.
These batteries are used to power hybrid electric
vehicles (HEVs) and electric vehicles (EVs), a market
expected to grow rapidly over the next few years.
The alliance is a 50-50 joint
venture between Texaco Energy Systems Inc. (TESI)
and Ovonic Battery Company, Inc. (Ovonic Battery),
a subsidiary of Energy Conversion Devices (ECD). ECD
is the inventor of NiMH battery technology. These
batteries have higher power, and a longer life than
conventional batteries. The NiMH battery is the enabling
technology for electric and hybrid electric vehicles
across the automotive industry. Automotive manufacturers
are including these batteries in the designs for their
upcoming production models. In addition, maintenance-free
NiMH batteries have reduced environmental impact,
have longer life cycles and can be produced in high
volume.
Funding from Texaco for NiMH battery
related activities will total more than $150 million
over the next few years. The alliance will significantly
increase its existing manufacturing facilities in
Kettering, Ohio, and its development facilities in
Troy, Mich. The companies also announced that Texaco
Ovonic Battery Systems has agreed to a multi-million
dollar investment in the development of production-ready
prototypes of the new Ovonic NiMH monoblock battery,
which is a compact design for high-voltage (36-42
volt) automotive electrical systems for future gasoline-powered
automobiles.
"Texaco is committed to the development and marketing
of energy technologies, and this venture is a key
part of our strategy," said Texaco Senior Vice
President William M. Wicker. "ECD has staked
out a leadership position in nickel metal hydride
batteries, and we intend to leverage the strengths
of both ECD and Texaco to take advantage of the vast
market opportunity in automotive, telecommunication
and uninterruptible power supply (UPS) applications."
In a joint statement, Stanford
R. Ovshinsky, ECD President and CEO, and Robert C.
Stempel, ECD Chairman, said, "We are pleased
to expand our relationship with Texaco, which has
proven to be a leader in advanced energy development.
With the projected growth in the HEV market, Texaco
Ovonic Battery Systems looks forward to offering ECD's
NiMH battery technology to the worldwide automotive
market as well as developing it for non-automotive
applications. These batteries are the batteries of
choice for EVs and HEVs by automakers and we expect
this battery market will grow significantly."
In 1992, the Department of Energy
provided funding to a consortium of auto manufacturers
to research and develop these batteries. "The
Department of Energy's successful public-private partnership
with ECD and Ovonic Battery to develop nickel metal
hydride batteries for electric and hybrid vehicles
has reached the exciting stage of commercialization,"
said Secretary of Energy Spencer Abraham. "This
technology's improved range and good performance offers
significant potential to help create a domestic advanced
battery industry. I am particularly pleased Texaco
and ECD will expand Ovonic's nickel metal hydride
battery development facilities in Southeast Michigan
and I am certain that ECD and Ovonic Battery's expertise
and leadership can help sustain the nation's technological
leadership."
General Motors has designated
Texaco Ovonic Battery Systems as a preferred supplier
for its NiMH battery requirements for EVs and HEVs
and other automotive applications. In addition, GM
and Texaco Ovonic Battery Systems are collaborating
on a joint development program aimed at meeting GM's
future automotive needs for NiMH batteries. On July
17, 2001, Texaco completed the purchase of GM's stake
in GM Ovonic, the predecessor to Texaco Ovonic Battery
Systems.
In addition to this alliance,
Texaco and ECD are partners in Texaco Ovonic Fuel
Cell Company LLC, a joint venture to further develop
and advance the commercialization of the Ovonic Regenerative
Fuel Cell �, and Texaco Ovonic Hydrogen Systems LLC,
an alliance to further develop and market ECD's technology
to store hydrogen in metal hydrides.
Contacts:
Energy Conversion Devices
Ghazaleh Koefod, 248-280-1900
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Paul Weeditz, 713-724-0497
Jennifer Silva, 713-752-3854
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Note to Editor:
In 1992, Ovonic Battery was
awarded the first contract by the U.S. Advanced Battery
Consortium (USABC), a partnership of the big three
North American automakers with funding by the DOE
and the Electric Power Research Institute (EPRI),
to develop and demonstrate NiMH batteries for EV applications.
Under the USABC program, an EV-1 (GM's all-electric
vehicle) powered with Ovonic NiMH batteries was the
first vehicle to achieve a range of over 220 miles
on a single charge. The Partnership for a New Generation
of Vehicles (PNGV), an industry-government partnership
with automakers, suppliers, the DOE, the Department
of Commerce, the Department of Defense and the national
laboratories provided funding for development of HEV
NiMH batteries. Ovonic Battery successfully demonstrated
specially designed NiMH batteries with high power
and extended cycle life for use in HEVs. The automotive
industry has used them to demonstrate hybrid electric
vehicles and they are now being designed into upcoming
production models.
ECD is the leader in the synthesis
of new materials and the development of advanced production
technology and innovative products. It has pioneered
and developed enabling technologies leading to new
products and production processes based on amorphous,
disordered and related materials, with an emphasis
on advanced information technologies and alternative
energy, including photovoltaics, fuel cells, hydride
batteries and hydride storage materials capable of
storing hydrogen in the solid state for use as a feed
stock for fuel cells or internal combustion engines
or as an enhancement or replacement for any type of
hydrocarbon fuel. ECD designs and builds manufacturing
machinery that incorporates its proprietary production
processes, maintains ongoing research and development
programs to continually improve its products and develops
new applications for its technologies. ECD holds the
basic patents in its fields. ECD's web site address
is http://www.ovonic.com.
Operating in over 150 countries
worldwide, Texaco explores for and produces crude
oil, natural gas and natural gas liquids; manufactures
and markets high-quality fuels and lubricants; operates
trading, transportation and distribution facilities;
and produces alternate forms of technology for the
conversion of coal, petroleum coke and other low-value
hydrocarbons into a clean synthesis gas, which is
used for the production of electric power as well
as chemical products and industrial gases, including
hydrogen. TESI, a wholly owned subsidiary of Texaco
Inc., is focused on commercialization efforts in fuel
cells and other advanced energy technologies, including
the development of viable fuel-processing technology
for fuel cells. In May 2000, Texaco acquired a 20-percent
equity interest in ECD for $67.4 million. The two
companies have also formed Texaco Ovonic Fuel Cell
Company LLC, a 50-50 joint venture to further develop
and advance the commercialization of ECD's Ovonic
Regenerative Fuel CellTM,
and Texaco Ovonic Hydrogen Systems LLC, a 50-50 joint
venture to further develop and advance the commercialization
of ECD's technology to store hydrogen in metal hydrides.
Texaco's web site address is http://www.texaco.com.
This press release contains
a number of forward-looking statements within the
meaning of the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. In particular,
statements made concerning Texaco's and ECD's expected
performance and financial results in future periods
are based upon Texaco's and ECD's current expectations
and beliefs and are subject to a number of known and
unknown risks and uncertainties that could cause actual
results to differ materially from those described
in the forward-looking statements. The following factors
known to Texaco and ECD, among others, could cause
their actual results to differ materially from those
described in the forward-looking statements: inaccurate
scientific data; mechanical, chemical and technological
failures; decreased demand for alternative fuels and
other products; above or below-average product and
technology demands; worldwide and industry economic
conditions; higher costs, expenses and interest rates;
the outcome of pending and future litigation and governmental
proceedings; continued availability of financing;
and strikes and other industrial disputes. In addition,
you are encouraged to review Texaco's and ECD's latest
reports filed with the SEC, including, but not limited
to, Texaco's Annual Report on Form 10-K filed with
the SEC on March 26, 2001, which describes a number
of additional risks and uncertainties that could cause
actual results to vary materially from those listed
in the forward-looking statements made in this press
release.
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