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

May 4, 2005

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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

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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

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 Page 4

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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

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 Page 6

HE HMMWV Repower

• NAC initiated HMMWV Repower • • Partners include Roush Industries, International, and Solectria Replaces 6.5L turbo diesel with 4.5L twin turbo diesel mated to a 30kW starter/motor/generator (Parallel hybrid) • • • Includes 15kW distributed power 30% more power and torque 100% better fuel economy Page 7

HE FMTV

•Stewart & Stevenson •National Automotive Center •Solectria •System Design  ISA  48 kW Export Power Page 8

Export Power

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

Second Generation APDS

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

NAC –HMMWV with ISA and Export Power

•National Automotive Center •Solectria •System Design  ISA  15 kW Export Power  Bi-Direction DCDC Converter Page 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 kW Export Power Page 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

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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 C3 Node Improves Support for Mobile Operations 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 36 38 40 42 44 46 48 50 52 OPERATIONAL OPERATIONAL MOVEMENT START ARRIVE IN POSITION RADAR EMPLACED MOVEMENT ORDER MOVEMENT START ARRIVE IN POSITION RADAR EMPLACED High Mobility Firefinder Configuration With Integrated Onboard Power 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

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Tactical Lift Improved

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

AMCOM Aviation APDS

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

Collective Protection CBPS APDS

• • Chemical/Biological Protective Shelter HMMWV Based • • 20 kW, 3 phase, 4 wire 110/120vac, 60 hz • • 115/200vac, 400 hz 28 vdc Page 17

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Thank You!

Mark Federle Vice President, Sales (781) 932-7455 [email protected]

www.azuredynamics.com