Valence Technology Delivers on New Lithium-ion Battery Line; U-Charge® Power System Production Ready to Roll for Motive Markets

Business Wire, June 1, 2006

AUSTIN, Texas -- Valence Technology, Inc. (NASDAQ:VLNC) today announced it is now shipping four recently introduced models of its U-Charge(R) Power System large-format lithium-ion batteries as well as a new Battery Management System (U-BMS). The new battery models are based on Valence Technology's proprietary Saphion(R) technology, the industry's first commercially available, safe, large-format lithium-ion rechargeable battery technology.

The U-Charge XP Power Systems are capable of peak power rates of 500 to 1700 continuous watts, depending on the model. Three of the four new models are conveniently packaged in standard lead-acid sizes and operate at standard lead-acid voltage ranges. The UEV model is a unique size that has a taller profile for tighter footprint compartments and an 18-volt nominal rating. Each model includes integrated battery monitoring electronics and a communications port to access battery data. As many as 30 of these battery systems can be connected in series for very high voltage applications such as pure electric vehicles, hybrid electric vehicles, marine and power back-up applications.

The U-BMS can be used with 12-volt to 450-volt applications to provide battery-to-battery balancing, battery system monitoring, direct control of external disconnects, and remote battery system control. The U-BMS can communicate with system controllers via either CAN Bus or RS-485 Protocol.

"Traditionally, the motive industry has relied on lead-acid and nickel metal hydride batteries to power devices because they were the only safe choice for large-format applications. Now with the U-Charge Power System Family, based on the proven Saphion phosphate-based lithium-ion chemistry, there is a safe alternative," said Dr. James Akridge, president and CEO of Valence Technology, Inc. "Valence is excited to deliver the new U-Charge XP Power Systems as promised, and is well-positioned to be a leading supplier of lithium-ion batteries to many markets, including personal motive and hybrid electric and electric vehicles."

The U-Charge XP models began shipping in May 2006, within the delivery window announced in January. Also announced in January, the U-Charge RT Series, designed for applications such as electric wheelchairs, is on track to ship all models within the next month.

About Valence Technology, Inc.

Valence Technology develops and markets intelligent battery systems based on its Saphion(R) technology, the industry's first commercially available, safe, large-format Lithium-ion rechargeable battery technology. Valence Technology holds an extensive, worldwide portfolio of issued and pending patents relating to its Saphion technology and lithium-ion rechargeable batteries. The company has facilities in Austin, Texas, Las Vegas, Nevada, and Suzhou and Shanghai, China. Valence Technology is traded on the Nasdaq Capital Market under the symbol VLNC and can be found on the internet at www.valence.com.

Forward Looking Statements

Some information included in this press release contains forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Act of 1934. Such statements include information relating to business activities and project development. These statements can sometimes be identified by the use of forward-looking words such as "may," "will," "anticipate," "estimate," "except," "scheduled," or "intend" and similar expressions. Such forward-looking information involves important risks and uncertainties that could significantly affect anticipated results in the future and, accordingly, such results may differ materially from those expressed in any forward-looking statements made by or on behalf of Valence Technology. These and other risk factors that could affect actual results are discussed in Valence's periodic reports filed with the Securities and Exchange Commission, including its Report on Form 10-Q for the quarter ended September 30, 2005, and the reader is directed to these statements for a further discussion of important factors that could cause actual results to differ materially from those in the forward-looking statements. The forward-looking statements included in this press release are made only as of the date of this release. Valence Technology does not undertake any obligation to update or supplement any forward-looking statements to reflect subsequent events or circumstances and cannot assure that projected results or events will be achieved.