Ballard Agrees To Sell Automotive Fuel Cell Assets; Will Concentrate On Commercial Markets

Market Wire, November, 2007

All Amounts in U.S. Dollars, Unless Otherwise Noted - Ballard Power Systems (TSX: BLD)(NASDAQ: BLDP) today announced that it has agreed to sell the company's automotive fuel cell assets to Daimler AG and Ford Motor Company. Payment for these assets will consist of all 34.3 million Ballard shares held by Daimler and Ford. These shares will then be cancelled. Ballard expects to record an estimated gain on the transaction of $95-to-$105 million.

"This transaction will enable Ballard to concentrate on growth in fuel cell applications which provide clean energy solutions in commercial markets," said John Sheridan, Ballard's President and CEO. "It also lowers Ballard's risk profile by addressing the realities of the high cost and long timeline for automotive fuel cell commercialization. At the same time, a new private company will be established and will be positioned for success in automotive fuel cell technology over the longer term, with management and funding provided by Daimler and Ford."

Transaction Summary

Ballard will receive, and cancel, the 34.3 million Ballard shares owned by Daimler and Ford, valued at approximately $168 million based on the 20-day average share price preceding the announcement.

Ballard will transfer the following to Daimler and Ford:

- Automotive intellectual property.

- 113 employees, primarily in the research and technology development areas (20% of Ballard's workforce).

- Certain test equipment and inventory (book value of $6 million).

Daimler and Ford will manage and fund automotive fuel cell technology development programs through a new private company located at Ballard's facilities. Daimler and Ford will contribute $60 million to the new private company and Ballard will invest $60 million. The ownership structure of the new private company will be 50.1% Daimler, 30% Ford and 19.9% Ballard. The value of Ballard's investment in the private company is protected by a purchase/sale option agreement with Ford for $65 million plus interest.

Ballard will not be obligated to provide any ongoing funding to the private company.

In association with its minority ownership position, Ballard will:

- Receive rights to use automotive intellectual property in non-automotive applications, including both the transferred and future intellectual property developed by any of the private company, Daimler and Ford.

- Provide contract technical services to the private company, on a profitable basis.

- Manufacture fuel cells for the private company, Daimler and Ford, on a profitable basis.

Ballard, Daimler and Ford have agreed to terminate the Automotive Alliance Agreement that had defined their respective responsibilities for automotive fuel cell development work. This transaction also cancels Daimler and Ford's special voting and veto rights at Ballard, as well as their rights to four seats on Ballard's Board of Directors.

Additional transaction details are contained in an Addendum at the end of this press release.

Transaction Benefits to Ballard

Ballard will obtain several benefits from the transaction, including:

1) Shortened timeline to profitability, as Ballard's annual cash consumption will be reduced by approximately $15 million.

2) 30% reduction in the number of outstanding shares.

3) Reduced financing requirements.

4) Revenue generation through contract technical services provided to the private company, largely offsetting the loss of automotive engineering development revenue.

5) Right to use transferred and future automotive fuel cell intellectual property in non-automotive applications.

6) Retention of automotive manufacturing facilities and capabilities, and the right to pursue fuel cell bus opportunities.

Commercial Fuel Cell Markets

Over the past two years Ballard has developed fuel cell products, partner relationships, channels to market and sales & marketing capabilities for commercial markets such as materials handling, backup power and residential cogeneration. Today, commercialization activities are progressing in each of these markets in North America, Europe and Asia.

Sheridan said, "These commercial markets represent a very large global opportunity for fuel cell products. Our product shipments in the third quarter of 2007 were up 123% over the same quarter in 2006 - clear evidence of the growth potential. We are also confident there are opportunities for our products in additional geographic markets as well as product extension opportunities in different applications."

Ballard also remains committed to fulfillment of current bus demonstration program contracts, including the supply of fuel cell modules for up to 20 BC Transit fuel cell buses. Ballard will continue to actively pursue additional fuel cell bus demonstration program opportunities. These programs generate environmental benefits from the use of fuel cells and also promote greater awareness of fuel cell-based solutions.

Shareholder Approval

The transaction has been approved by Ballard's Board of Directors and has received the necessary approvals of Daimler and Ford. Completion of the transaction remains subject to receipt of all necessary regulatory approvals as well as the approval of the Daimler Supervisory Board. As the transaction constitutes a related party transaction for the purposes of applicable Canadian securities laws, the transaction must be approved by a simple majority of Ballard's shareholders, excluding any votes cast by Daimler or Ford.