Ballard, Tokyo Gas, EBARA BALLARD and EBARA Enhance Relationship.

Business Editors

VANCOUVER, B.C.--(BUSINESS WIRE)--Jan. 10, 2002

Ballard Power Systems (NASDAQ:BLDP)(TSE:BLD.) announced today that its subsidiary Ballard Generation Systems, Tokyo Gas, EBARA BALLARD and EBARA Corporation have signed a three-year collaboration agreement to commercialise residential 1-kW Proton Exchange Membrane (PEM) fuel cell cogeneration units comprised of a BALLARD(R) fuel cell and fuel processing system manufactured by EBARA BALLARD based on Tokyo Gas' fuel processing technology.

Ballard Generation Systems and EBARA BALLARD also signed a Patent and License Agreement to license Tokyo Gas' unique fuel processing technology worldwide for PEM fuel cell systems.

"This enhanced relationship indicates our clear progress towards the goal of commercialising residential fuel cell power generation technology in Japan," said Mike Murry, Ballard's Vice-President, Power Generation. "We are proud of the technological advances shown by our associate company EBARA BALLARD."

"We have made significant progress since we began our relationship with Tokyo Gas in 2000," said EBARA BALLARD President, Masakatsu Ohya. "Today's licence agreement and our third phase collaboration agreement with Tokyo Gas are indicative of the strong long-term relationship our companies have forged."

EBARA BALLARD recently unveiled their second-generation prototype fuel cell power generator for the Japanese residential market. The second-generation prototype unit has advanced to include an electrical inverter, to convert DC to usable AC power, and has reached AC gross electrical efficiency of 34 per cent (lower heating value "LHV"). The volume of the prototype unit has been reduced by 40 per cent from the first generation, and has increased heat recovery efficiency to 47 per cent (LHV), giving total efficiency of 81% (LHV).

EBARA BALLARD is a jointly held company of EBARA Corporation of Japan and Ballard Generation Systems with a mandate to supply Ballard Generation Systems fuel cell power generators incorporating the BALLARD(R) fuel cell to customers in Japan.

EBARA Corporation is globally recognized as a major developer, manufacturer and distributor of fluid machinery and systems, precision machinery and environmental engineering systems and as a leader in zero-emission energy technology.

Tokyo Gas is the largest natural gas company in Japan both in terms of the number of customers - over 8.9 million in total - and gas sales volume. Founded in 1885, its service area now covers over 3,100 square kilometres in the heart of the Kanto region, Tokyo and neighbouring prefectures, the largest and most densely populated region in Japan with a total of some 40 million people. Tokyo Gas is conducting research and development in many areas including cost reduction, safety enhancement and efficient utilization of natural gas, and fuel-processing technologies.

This release contains forward-looking statements that are based on the beliefs of Ballard's management and reflect Ballard's current expectations as contemplated under the Safe Harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. When used in this release, the words "estimate", "project", "believe", "anticipate", "intend", "expect", "plan", "predict", "may", "should", "will", the negative of these words or such other variations thereon or comparable terminology are intended to identify forward-looking statements. Such statements reflect the current views of Ballard with respect to future events based on currently available information and are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated in those forward-looking statements.

Ballard Power Systems is recognised as the world leader in developing, manufacturing and marketing zero-emission proton exchange membrane ("PEM") fuel cells. Ballard is commercialising fuel cell engines for the transportation market, electric drive trains for both fuel cell and battery powered electric vehicles, power conversion equipment for microturbines and other distributed generation technologies, fuel cell power generation equipment for markets ranging from 1-kilowatt portable power products to larger stationary power generation products and is a Tier 1 automotive supplier of friction materials for power train components. Ballard's proprietary technology is enabling automobile, electrical equipment and portable power product manufacturers to develop environmentally clean products for sale. Ballard is partnering with strong, world-leading companies, including DaimlerChrysler, Ford, ALSTOM and EBARA, to commercialise BALLARD(R) fuel cells. Ballard has supplied fuel cells to Honda, Nissan, Volkswagen, Yamaha, Cinergy, Coleman Powermate and Matsushita Electric Works, among others.

Ballard's Common shares are listed on The Toronto Stock Exchange under the trading symbol "BLD" and on the Nasdaq National Market System under the symbol "BLDP". Ballard, the Ballard logo and Power to Change the World are registered trademarks of Ballard Power Systems Inc.