Valence Signs MOU with Siemens to Develop Batteries Compatible with Siemens Marine Hybrid Propulsion Systems

Valence Technology, Inc. (NASDAQ: VLNC), a leading U.S.-based manufacturer and supplier of lithium iron magnesium phosphate energy storage solutions, today announced it has signed a memorandum of understanding with Siemens Drive Technologies Division, the world's leading supplier of products and services for production machinery and machine tools, to develop modular and scalable energy storage systems compatible with a standard interface of Siemens’ ELFA® Hybrid drive marine propulsion system.

The ELFA® Hybrid drive range is already in use in buses, cranes and boats with over 8 million hours recorded on systems from leading bus manufacturers as well as selected boat manufacturers.

Robert L. Kanode, CEO and President, Valence Technology, said, “Valence energy storage solutions have been in operation with Siemens hybrid drive trains for over three years in Wrightbus buses, who have multiple hybrid double deck buses operating in London. I was delighted when we were approached to formalize an agreement to develop battery solutions compatible with Siemens hybrid systems for marine applications. Siemens is a world class brand and this agreement is a testament to Valence’s capabilities. It further reinforces our position as a leading global supplier of energy storage solutions.”

As industry follows the global trend toward greener propulsion systems with significant reduction of CO2 and noise, Siemens intends to strengthen the development of its ELFA® Hybrid drive range. The company understands the increased market requirements for efficiency, maneuverability control and innovations in propulsion systems not only in the bus market but also in the pleasure and workboat market.

As an appropriate battery system becomes a necessity for a true hybrid propulsion system and boatyards are increasingly demanding drive solutions for zero emission propulsion modes, it is important to have a leading energy storage manufacturer such as Valence link up their batteries to the Siemens hybrid drive system via a standard interface.

About Valence Technology, Inc.

Valence Technology is an international leader in the development of lithium phosphate energy storage solutions. The company has redefined lithium battery technology and performance by marketing the industry’s first safe, reliable and rechargeable lithium iron magnesium phosphate battery. Celebrating 20 years in business, Valence today offers a proven technology and manufacturing infrastructure that delivers ISO-certified products and processes that are protected by an extensive global patent portfolio. Headquartered in Austin, Texas, Valence has facilities in Nevada, China and Northern Ireland. Valence is traded on the NASDAQ Capital Market under the ticker symbol VLNC. For more information, visit www.valence.com.

About Siemens Drive Technologies Division

The Siemens Drive Technologies Division (Nuremberg, Germany) is the world's leading supplier of products and services for production machinery and machine tools. Drive Technologies offers integrated technologies that cover the entire drive train with electrical and mechanical components. This includes standard products but also encompasses industry-specific control and drive solutions for metal forming, printing and electronic manufacturing as well as solutions for glass, wood, plastic, ceramic, textile and packaging equipment and crane systems. The services provided by the Division include mechatronics support in addition to online services for web-based fault management and preventive maintenance. With around 39,900 employees worldwide Siemens Drive Technologies achieved in fiscal year 2008 total sales of EUR8.9 billion. For more information visit www.siemens.com.

Safe Harbor Statement.

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may vary substantially from these forward-looking statements as a result of a variety of factors, including whether the codevelopment will result in any commercial transaction between the Parties. The risk factors that could affect actual results are discussed in our periodic reports filed with the Securities and Exchange Commission, including our Report on Form 10-K for the year ended March 31, 2008, 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.

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