The Power of Lithium & Safety of Phosphate Commercial Evolution Commercial Evolution Robert L....

““The Power of Lithium & Safety of Phosphate”The Power of Lithium & Safety of Phosphate”

Commercial EvolutionCommercial EvolutionRobert L. Kanode President & CEO

June 7, 2011

2““The Power of Lithium & Safety of Phosphate”The Power of Lithium & Safety of Phosphate”

This presentation contains forward-looking statements within the meaning of

the Private Securities Litigation Reform Act of 1995. Actual results can vary

substantially from these forward-looking statements as a result of a variety of

factors. These and other risk factors that could affect actual results are

discussed in our periodic reports filed with the Securities and Exchange

Commission, including our Annual Reports on Form 10-K and subsequent

Quarterly Reports on Form 10-Q and other documents filed with the Securities

Exchange Commission. 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. We disclaim any

intent or obligation to update these forward-looking statements.

Safe Harbor StatementSafe Harbor Statement


Our HistoryOur History

1989 Founded in San Jose, CA.

1992 Listed on Nasdaq “VLNC”

1995 Licensed Bellcore “Flat Cell” technology

1998 Manufacture of Bellcore cells, Lithium Cobalt, and Lithium Manganese

2002 Launched first commercial Lithium Phosphate (LP) Technology

2004 Launched Segway Custom Pack “Exclusive Supplier”

2005 Launched 12Volt U-Charge® Scalable Modules



2011 Planned Launch of Next Generation High Power Custom Systems

Transition to Commercial Sales

Extensive Patent Estate Enables Valence to Sell in Major World Markets


Serving The WorldServing The World137.4 MWhrs Shipped-to-Date Worldwide137.4 MWhrs Shipped-to-Date Worldwide

Northern IrelandEU Sales & Application Engineering

Austin, TX – HQFinance, Sales & Marketing, Engineering

Suzhou, ChinaCathode Material, Cell & System Manufacturing

Las Vegas, NVMaterial Research & Legal

RLKanode


Global Patent EstateGlobal Patent Estate

Total Granted Patents (all categories): 267US: 132Foreign: 135

Total Pending Patents (all categories): 167US: 42Foreign: 125

Products & Processes Where Patents are Utilized214 – Lithium Iron Magnesium Phosphate Chemistry237 – Lithium Vanadium Phosphate Chemistries 67 - Carbothermal Reduction Process (Cathode Manufacturing)

176 - Miscellaneous (Electronics, Software, Pack Engineering, Other Chemistries, Misc.)


Compared to Lead Acid½ Weight2X Run TimeLonger LifeLower Lifetime CostReliable100% Less Self-DischargeExtended Shelf LifePredictable EOL PerformanceNo Maintenance

Compared to Lithium OxidesSafeLonger LifeLower Lifetime CostReliable

Technology AdvantagesTechnology AdvantagesValence Lithium Iron Magnesium PhosphateValence Lithium Iron Magnesium Phosphate

Li(Fe,Mg)PO4


Li3V2(PO4)3

Higher Voltage, Power & EnergySafeLonger LifeLower Lifetime CostReliablePredictable EOL PerformanceNo Maintenance

Technology AdvantagesTechnology AdvantagesValence Lithium Vanadium PhosphateValence Lithium Vanadium Phosphate


Characteristic LiCoO2 LiMn2O4 Li(Fe,Mg)PO4

Li3V2(PO4)3

Theoretical capacity

*140 mAh/g

*120 mAh/g

163 mAh/g 197 mAh/g

Voltage 3.7V 3.8V 3.2V 3.0 - 4.3V

Oxygen bonding Very weak Weak Strong Strong

Cycle life Average Poor Excellent Good

Application need

Key characteristics Materials need

LVP

Specific energy

High Ah/kgHigh voltage

Pulse powerHigh voltage

Low impedance

Safety Oxygen bondingTightly bound

oxygen

Cycle lifeMany Good cycle

life

Voltagekg

AhEnergy

* Complete extraction of lithium causes performance and safety issues for the oxides

Valence Patented Lithium Phosphate Valence Patented Lithium Phosphate FamilyFamily

vs. Lithium Oxidesvs. Lithium Oxides

R

VpowerPulse

2


High Power PulsingHigh Power Pulsing

•OCV: Open Circuit Voltage•Application example: 10-second burst of power to accelerate from 0-60MPH

-60

-40

-20

0

20

40

60

-10 -5 0 5 10 15 20

seconds

Wat

ts

2.5

3.0

3.5

4.0

4.5

5.0

Vol

ts

WattsVolts

•P1a 18650 power cell (43mOhm DC)•10-second pulse•17A constant current•45W power output at 10 seconds

•VOCV = 3.3V; Vmin = 2.6V

VOCV

Vmin


0

20

40

60

80

100

120

140

0 20 40 60 80

Current A

Pow

er W

LVPP1a

Maximum Pulse PowerMaximum Pulse Power18650 Power Cell Example

R

VVVcapabilitypowerPulse ocv )( minmin

• Power optimized 18650• 23°C• Weight ~40g• 35-45 mOhm DC• Vmin 1.6V cutoff• <10 second pulse

length

High OCV and low resistance deliver higher pulse power for LVP


LVP StructureLVP StructureNASICON for High Power

•NASICON-related structure

NASICON = NA (sodium) SuperIonic CONductor

MO6 octahedra,

Corner sharing with PO4 tetrahedra

Li ions in 3-D network of cavities

•Monoclinic crystal system

•Space group P21/n

•Minimal, reversible structural changes during removal and insertion of lithium•100% of lithium may be removed safely, in contrast to the layered materials


Proven Safety & Long LifeProven Safety & Long LifeUp to 13 Times Less Expensive Than Lead Up to 13 Times Less Expensive Than Lead

AcidAcidBattery Life (cycles) at Specified Energy Consumption (%)

3204006001,1252,600

4,323

9,746

29,657

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

100%80%50%

20%

Energy Consumed Per Discharge

Lif

etim

e C

ycle

s

Valence Patented Lithium Phosphatevs.

Enersys Genesis Pure Lead Acid


Proven Safety, Performance, Proven Safety, Performance, Reliability & Lowest CostReliability & Lowest Cost


Fleet Value EquationFleet Value EquationLLifetime Savings $550K/Truck

Cumulative EV vs. Diesel Fleet Truck Cost


Electric Fleet BenefitsElectric Fleet Benefits

57% Estimated Cost Savings Over 25 Years

Decreased Exposure to Fluctuation in Diesel Prices

Increased Fleet Reliability

Lower Labor and Maintenance Costs to Support

Fleet

Zero Tailpipe Emissions


Commercial Products Powered Commercial Products Powered by by U-ChargeU-Charge®®

From Personal Transporterto

Mass Transit

Valence Leads The Way!

Tested & Approved by


Powered by Valence

Exclusively Powered by Valence

Next Generation EV’s Next Generation EV’s Powered by Valence Custom SystemsPowered by Valence Custom Systems

Top Speed 65 MPH / Maximum Range 125 Miles


Motive > Marine > Stationary > Medical > Industrial

Stationary IndustrialMedical

Valence is Following Lithium Opportunities Into a Variety of

Markets

Fleets 1st to Market

Valence Technology Valence Technology Moving to Other MarketsMoving to Other Markets

““The Power of Lithium & Safety of Phosphate”The Power of Lithium & Safety of Phosphate”

““A Common Sense, Scalable A Common Sense, Scalable Manufacturing Approach to Serve Manufacturing Approach to Serve Global Alternative Energy Markets Global Alternative Energy Markets

as they Mature and Standards as they Mature and Standards Develop”Develop”

Robert L KanodeRobert L KanodePresident & CEOPresident & CEO


REFERENCE


Fleet Value AssumptionsFleet Value Assumptions

Diesel Delivery Truck Assumptions

“Conventional Fleet Truck”

• Initial Cost $70,000

• Fuel Economy 7 MPG • Diesel Cost $4 / Gallon

• Diesel Cost Increase 5% / year

• Maintenance Cost $5,000/ Truck

Electric Delivery Truck Assumptions“Valence Powered”

• Initial Cost $50,000 (Without Engine and Drive Train)• Electric Drive Train Components $32,000• Valence extended range battery pack for fleet service $58,000• Electricity Cost Increase 3% / year• Battery Pack Replaced Every 10 Years• Replacement Batteries Packs are Estimated to be 33% of Today’s Cost in 10 Years.• Maintenance Cost $1,500 / year• Tax Penalty Due to Higher Initial Price (California Sales tax of 8.25% on the difference)


Valence Lithium Iron Magnesium Phosphate Valence Lithium Iron Magnesium Phosphate (P1a)(P1a)

&.&.Lithium Vanadium Phosphate Rate Lithium Vanadium Phosphate Rate

Capabilities (LVP)Capabilities (LVP)

LVP capacity and voltage are higher than P1a at all rates and temperaturesLVP capacity is less sensitive to rate and temperature than P1a

1.5

2.0

2.5

3.0

3.5

4.0

4.5

0 50 100 150% relative capacity

Vo

ltag

e

LVPP1a

0.5C rate

10C rate0.5C rate

10C rate

23°C

0

20

40

60

80

100

120

-20 -10 0 10 20 30 40 50 60

Temperature °C

% c

apac

ity r

eta

ined

at 1

C r

ate

.

LVPP1a

1-C rate


Technology & ProductsTechnology & Products

Patented Technology

Vast IP estate with new patents added every year

Significant and recent patent infringement victory vs. Phostech Lithium (Canada)

Cathode Materials (LFMP, LVP, LVPF)

Manufactured with patented carbo-thermal reduction process

Cells

Full line of cylindrical and prismatic cells

U-Charge® Modular Storage Systems

Scalable up to 1,000 volts

Featuring Valence interactive “Command & Control System”

Custom Storage Systems

With Valence materials, cells and command & control logic

Application Engineering Support

Integration of energy storage systems into customers applications

Program “Command & Control Logic” to specific custom needs

U-Charge® U-Charge® Scalable SystemsScalable Systems

The Power of Lithium & Safety of Phosphate Commercial Evolution Commercial Evolution Robert L....

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