press release

Texaco Ovonic Battery Systems Announces Award of Contract Under the FreedomCar Initiative


Issued by Texaco Ovonic Battery Systems LLC, a 50-50 joint venture company between a unit of ChevronTexaco Technology Ventures and Ovonic Battery Company, Inc., a subsidiary of Energy Conversion Devices, Inc.

Phase three contract to continue advances in Ovonic NiMH battery development for hybrid electric vehicles

Rochester Hills, Mich., July 31, 2002 -- Texaco Ovonic Battery Systems LLC, a 50-50 joint venture company between a unit of ChevronTexaco Technology Ventures and Ovonic Battery Company, Inc., a subsidiary of Energy Conversion Devices, Inc. (NASDAQ:ENER), announced today that it has received a $5.2 million, two-year cost-sharing contract to continue the development work on its proprietary liquid-cooled 12V monoblock nickel metal hydride (NiMH) battery technology for hybrid electric vehicles (HEV) under the sponsorship of the Department of Energy's FreedomCar initiative.

Tom Neslage, President of Texaco Ovonic Battery Systems, said, "We at Texaco Ovonic Battery Systems are pleased to continue our successful developmental program with the Department of Energy. This important work, based upon our proprietary NiMH battery technology, will help accelerate the commercialization of hybrid technologies for a broad range of transportation applications."

The new contract represents Phase 3 of a program focused on completing the development work, which began in November 1999. In Phase 1, the technology development focused on improvement of the NiMH battery. Phase 2 of the development program emphasized durability and manufacturability concepts. Phase 3 is focused on development of full HEV battery systems meeting performance and production cost targets. The program will culminate in the delivery of complete 25kW battery pack systems, including thermal management, control electronics and a battery management system.

The development program currently underway at Texaco Ovonic Battery Systems is based on the fundamental inventions and pioneering work in NiMH batteries by Stanford R. Ovshinsky, President and CEO of ECD, and Ovonic Battery Company that provide the enabling technology. In 1992, Ovonic Battery Company 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 Department of Energy and the Electric Power Research Institute, to develop and demonstrate NiMH batteries for electric vehicle 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 (the predecessor to FreedomCar), an industry-government partnership among automakers, suppliers, the DOE, the Department of Commerce, the Department of Defense and the national laboratories, provided funding for development of an HEV NiMH battery. Ovonic Battery Company has successfully demonstrated specially designed NiMH batteries with high power and extended cycle life for use in HEVs. The automotive industry has used these batteries to demonstrate hybrid electric vehicles, and batteries based on our technology 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 feedstock 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

ChevronTexaco Corp. is an integrated global energy company participating in virtually all aspects of the global energy business. It is the second-largest U.S.-based energy company and the fifth largest in the world, based on market capitalization. More than 53,000 ChevronTexaco employees work in approximately 180 countries around the world, producing oil and natural gas and marketing fuels and other energy products.

ChevronTexaco Technology Ventures, a unit of ChevronTexaco Corp., is involved with identifying, developing and commercializing new and emerging technologies and energy systems that promise to play an increasingly important role in the world's energy mix. Such activities include fuel cells, fuel processing, hydrogen storage, advanced batteries, and methods of converting solid, liquid and gaseous hydrocarbons into clean liquid fuels and renewables. ChevronTexaco Technology Ventures is also a venture investor actively engaged in developing and commercializing innovative energy technologies through internal development, joint ventures and equity investments.

This press release may contain 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, any statements made concerning ChevronTexaco's and ECD's expected performance and financial results in future periods are based upon ChevronTexaco'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 ChevronTexaco 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 ChevronTexaco's and ECD's latest reports filed with the SEC, including but not limited to ChevronTexaco's and ECD's Annual Report on Form 10-K, which describe 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.

Updated: July 2002