Azure Dynamics Receives Technology of the Year Award in Hybrid Electric Vehicles Market

PALO ALTO, Calif.--July 19, 2005--Azure Dynamics Corporation will be presented with the 2005 Technology Leadership of the Year Award tonight at Frost & Sullivan's Excellence in Emerging Technologies Awards Banquet in recognition of the company's pioneering work in developing hybrid electric drivetrains. The technology, termed Azure Control System (ACS), promises to be the benchmark for hybrid electric controllers worldwide.

Every year, Frost & Sullivan presents this Award to the company that has pioneered the growth of an innovative technology, which is likely to affect several market sectors in terms of adoption, change, and competitive posture. It also recognizes the leadership of the company in the successful promotion of expertise and its continuing impact in technology commercialization.

Azure's principal business is the development and commercialization of hybrid electric and electric vehicle powertrains. Azure's control system (ACS) technology offers real-time energy management that optimizes the performance of hybrid and electric vehicle (HEV) propulsion system components and adapts the control system to real operating conditions.

"The technology is designed to ensure the optimum use of vehicle components (battery, fuel cell, and/or internal combustion engine), thereby lowering production costs and reducing users' operating costs, fuel consumption, and exhaust emissions," says Frost & Sullivan Research Analyst Rajesh Kannan.

Notably, Azure's control technology incorporates real-time adaptive algorithms that change with actual operating conditions by sampling vehicle data and managing energy flow across the vehicle's components. This is essential since the minimization of energy use and emissions necessitates the control of various components of a hybrid powertrain, as well as their coordination and optimization to meet changing loads throughout the vehicle's lifecycle.

Hybrid and electric vehicles (HEVs) employing the ACS technology are equipped with an electric motor, an energy storage system (batteries), and an additional energy source such as a small internal combustion engine combined with a generator, which facilitates energy regeneration during breaking to charge batteries. The system can also run on pure electric mode for extended periods, thereby reducing noise as well as an estimated fuel consumption and emission of 35 percent in European and 50 percent in the North American vehicles in urban applications.

"The company is developing four powertrain platforms utilizing this technology: G1 for commercial vehicles in the medium duty weight range -- 9,000 to 14,000 lbs gross vehicle weight (GVW) -- and G2 for commercial vehicles in the light-duty weight range -- 5,000 to 7,500 lbs GVW," notes Kannan. "Within each platform, Azure is developing a hybrid or battery electric powertrain that is best suited to the particular customer application." Azure also has two larger parallel hybrid platforms being developed out of its Boston operations; the weight category for the parallel hybrids range from 14,000-18,000 GVW as well as 22,000-39,000 GVW.

The targets are systems for hybrid electric and electric vehicles in a broad array of weight classes specific to the commercial vehicle categories such as postal and parcel delivery vans, shuttle buses, taxis as well as specific military applications. A strong intellectual property portfolio backs the company's technology.

To promote its expertise, Azure is collaborating with key industry participants. Though the technology has no viable competitors in the medium duty vehicle arena, the heavier vehicle segment (greater than 15000 lbs) offers several competing technologies with the emergence of several hybrid systems integrators in the wider market. Some of these include BAE Systems plc, ISE Research Corporation, Enova Systems Inc., Eaton Corporation and DRS Technologies.

Azure Dynamics remains at the forefront of bringing hybrid vehicle powertrains to the mass market. For its commitment to hybrid technology development and, in particular for its development of the ACS, the company is the deserving recipient of the prestigious Frost & Sullivan Technology Leadership Award.

Held in Boston, Frost & Sullivan's Excellence in Emerging Technologies Awards Banquet honors world-class companies for pioneering the development and introduction of innovative technologies into their markets. An annual event, the banquet recognizes the overall technical excellence of a company and its commitment towards technology innovation.

About Azure Dynamics

Azure Dynamics Corporation is a world leader in the development and production of hybrid electric and electric commercial and military vehicles and systems. The group estimates it has over 25 million miles of vehicle experience. Azure Dynamics has operations based in North America and Europe.

Azure Dynamics is currently working internationally with various partners and customers including Purolator Courier Ltd., Canada Post, DHL, US Department of Defense, United States Postal Service, SEV Group Limited, Leyland Product Development, and London Taxis International. Azure Dynamics Corporation is a public company trading on the TSX (AZD) in Canada and on AIM (ADC) in the United Kingdom. For more company information, please visit www.azuredynamics.com.

About Frost & Sullivan

Frost & Sullivan, a global growth consulting company, has been partnering with clients to support the development of innovative strategies for more than 40 years. The company's industry expertise integrates growth consulting, growth partnership services, and corporate management training to identify and develop opportunities. Frost & Sullivan serves an extensive clientele that includes Global 1000 companies, emerging companies, and the investment community by providing comprehensive industry coverage that reflects a unique global perspective and combines ongoing analysis of markets, technologies, econometrics, and demographics. For more information, visit http://www.frost.com.