Hybrid Electric Military Vehicles with Export Power Capability

Hybrid Electric Military Vehicles with Export Power Capability 2005 Joint Service Power Expo May 4, 2005

Azure Dynamics Completes Acquisition of US-based Solectria Toronto, Ontario – January 31, 2005 Azure Dynamics Corporation (TSX – AZD & LSE - ADC) (“Azure Dynamics”, or the “Company”) a leading developer of hybrid electric powertrains for commercial vehicles today announced that it had successfully completed the acquisition of Solectria Corporation (“Solectria”), a leading US hybrid electric powertrain and components supplier. “With the acquisition of Solectria, Azure Dynamics becomes a world leader with probably the largest dedicated engineering group in hybrid commercial vehicles. The combined companies will provide a broad range of hybrid commercial powertrains and will have a customer base and sales in North America, Europe and the Far East, ” said Mr. Campbell Deacon, Chief Executive Officer of Azure Dynamics Corporation. Azure Dynamics acquired all the outstanding shares of Solectria in exchange for 25, 297, 655 of its common shares, resulting in Solectria’s former shareholders now owning approximately 19. 8% of the Company’s issued and outstanding common shares. The newly issued shares have been conditionally approved for listing on the Toronto Stock Exchange. Application has also been made for the shares to be admitted to AIM and trading on AIM is expected to commence at 8. 00 a. m. on February 4 th, 2005. Solectria will henceforth operate as Azure Dynamics US Inc. Azure Dynamics Corporation and its group of companies provide hybrid electric and electric vehicle technology for commercial and military vehicles. Azure Dynamics is a public company trading on both the TSX exchange in Canada as well as the AIM market in London, UK. The Company is a world leader in the development and manufacture (outsourced) of hybrid electric and electric commercial vehicles and systems. In its history, the group has delivered more than 4, 000 electric and hybrid electric vehicles (greater than 25 million miles of vehicle experience). Azure Dynamics is currently working internationally with various partners and customers including Purolator Courier Ltd. , Canada Post, DHL, London Taxis International, US Department of Defence, Leyland Product Development, Renault Trucks UK and the United States Postal Service. Azure Dynamics has employees based in North America and Europe. For more company information please visit our website at www. azuredynamics. com. 2

The Army’s Interest in Hybrid Electric Technology • Fuel is the largest single budget item • Logistical issues • Reduced logtail • Reduced cost • Tactical issues • Silent mobility • Silent watch • Capability • Better range • Export power 3

Azure is a Strong Advocate for Parallel HE Drives • Better Efficiency due to Fewer Energy Conversions • System Cost is Less Due to Fewer Components • System Weight is Less Due to Fewer Components • Less Intrusive to Vehicle Drive Easing Installation • Does not Limit Vehicle Performance 4

System Benefits • Up to 50% Reduction in Fuel Consumption • Up to 90% Reduction in Emissions • Reduced Maintenance Requirements • Idle Reduction • Silent Watch/Mobility • Export Power Capability 5

Azure’s Design Philosophy • Design to Provide Compelling Economic Case • Electric Launch in Inefficiency Range • Operate as Conventional Vehicle in Most Efficient Range 20 -60 MPH • Use Ultracaps as Energy Storage When Possible • Drive Fans and Pumps Electrically When Possible 6

HE HMMWV Repower • NAC initiated HMMWV Repower • Partners include Roush Industries, International, and Solectria • Replaces 6. 5 L turbo diesel with 4. 5 L twin turbo diesel mated to a 30 k. W starter/motor/generator (Parallel hybrid) • Includes 15 k. W distributed power • 30% more power and torque • 100% better fuel economy 7

HE FMTV • Stewart & Stevenson • National Automotive Center • Solectria • System Design §ISA § 48 k. W Export Power 8

Export Power • Fuel Consumption Reduction > 30% • Silent Watch/Mobility • Power Generation – Replace TQG • Reduced Logistical Footprint 9

Second Generation APDS • 15 k. W 3 -Phase, 4 -Wire Inverter • Output: 120 V/220 Single Phase • 208 V 3 -Phase • Selectable 50, 60, or 400 Hz Output Voltage Frequency • Two Unit Paralleling Capability, Providing 30 k. W of 3 -Phase Power 10

NAC –HMMWV with ISA and Export Power • National Automotive Center • Solectria • System Design §ISA § 15 k. W Export Power §Bi-Direction DCDC Converter 11

General Engine Products –HMMWV with ISA and Export Power • Phase 1 Demonstrator for AUSA • Phase 2 for Rodeo 1 • Phase 1 System Design §ISA § 30 k. W Export Power 12

Raytheon - High Mobility Firefinder with Export Power Baseline Firefinder Section Requires Four HMMWV’s, eight Soldiers Provides 90 Degrees of Coverage and Requires 15 Minutes to Emplace Fixed Site Operations Disrupt Coverage for Mobile Operations High Mobility Firefinder Section Using Four HMMWV’s, and eight Soldiers Provides 180 Degrees of Coverage and Requires 2 Minutes to Emplace Operate-on-the-Move C 3 Node Improves Support for Mobile Operations 13 High Mobility Configuration Provides 200% Increase in Area Coverage And 87% Reduction in Emplacement Time

Operational Uptime Current v. High Mobility Firefinder Configuration MOVEMENT START ARRIVE IN POSITION RADAR EMPLACED MOVEMENT ORDER MOVEMENT START ARRIVE IN POSITION RADAR EMPLACED OPERATIONAL 0 2 4 6 8 10 12 14 16 18 20 22 24 MINUTES 26 28 30 32 34 OPERATIONAL MOVEMENT START ARRIVE IN POSITION 36 38 40 42 44 OPERATIONAL MOVEMENT ORDER RADAR EMPLACED MOVEMENT START ARRIVE IN POSITION RADAR EMPLACED High Mobility Firefinder Configuration With Integrated Onboard Power 14 In 51 Minute Period (Consisting of two 5 minute movements), A Single High Mobility Firefinder Achieves 38 Minutes of Operational Time Compared to Baseline Firefinder 6 Minutes – A 633% Increase 46 48 50 52

Tactical Lift Improved High Mobility Firefinder Configuration Provides 200% Capability in Single C-130 Lift 15

AMCOM Aviation APDS • Shop Equipment Contact Maintenance (SECM) Shelter Programs • New Aviation Ground Power Systems (NAPS) • 48 kw, 3 phase, 4 wire • 110/120 vac, 60 hz • 115/200 vac, 400 hz • 28 vdc, 500 -750 amps • 270 vdc, 20 kw 16

Collective Protection CBPS APDS • Chemical/Biological Protective Shelter • HMMWV Based • • 17 20 k. W, 3 phase, 4 wire 110/120 vac, 60 hz 115/200 vac, 400 hz 28 vdc

Thank You! Mark Federle Vice President, Sales (781) 932 -7455 mfederle@azuredynamics. com www. azuredynamics. com 18