Ballard to Acquire Carbon Products Division of Textron Systems.

Business Editors

VANCOUVER, B.C.--(BUSINESS WIRE)--May 22, 2001

Ballard Power Systems Inc. (NASDAQ:BLDP)(TSE:BLD.) announced today that it has signed an agreement with Textron Systems of Wilmington, Massachusetts under which Ballard will acquire Textron's carbon products business unit for US$12.8-million.

The acquisition is expected to close on May 25, 2001.

This business unit develops and manufactures a variety of carbon materials for automotive and fuel cell applications, including a gas diffusion layer (GDL) for use in proton exchange membrane (PEM) fuel cells. A GDL allows the even diffusion of gases against the membrane at the heart of a PEM fuel cell. A GDL must have good electrical conductivity and be suited to volume manufacturing techniques.

The acquired business unit, to be known as Ballard Material Products, Inc., will be a wholly owned subsidiary of Ballard Power Systems. It will employ over 50 people and be located in a 137,000 sq. ft. manufacturing facility on eight acres in Lowell, Massachusetts (a suburb of Boston). The acquisition includes intellectual property comprising 66 patents issued and pending worldwide, covering 14 distinct inventions.

Firoz Rasul, Ballard's Chairman and Chief Executive Officer, said, "This acquisition brings to Ballard expertise in carbon materials engineering and automotive component manufacturing, a portfolio of relevant intellectual property and a business unit that can substantially fund all of its research and development expenditures from its current revenues. I want to welcome to the Ballard team our newest members at Ballard Material Products. I know that they will contribute to the commercial success of Ballard."

In 2000, the acquired business unit had revenues of US$11.8 million from sales of its specialized carbon products to a wide range of customers. The division is a qualified Tier 1 supplier to General Motors on a sole-source basis through the 2003 model year of friction material used in automotive transmissions. The division is both QS9000 and ISO9001 certified.

Ballard Power Systems is recognized as the world leader in developing, manufacturing and marketing zero-emission proton exchange membrane fuel cells for use in transportation, electricity generation and portable power products. Ballard Power Systems' proprietary fuel cell technology is enabling automobile, electrical equipment and portable power product manufacturers to develop environmentally clean products for sale. The fundamental component of these end-user products is the BALLARD(r) fuel cell that combines hydrogen (which can be obtained from methanol, natural gas, petroleum or renewable sources) and oxygen (from air) without combustion to generate electricity. Ballard is partnering with strong, world-leading companies, including DaimlerChrysler, Ford, GPU, ALSTOM and EBARA, to commercialize BALLARD(r) fuel cells. Ballard has also 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 and the Ballard logo are registered trademarks of Ballard Power Systems Inc.

This release contains forward-looking statements reflecting Ballard's current expectations as contemplated under the Safe Harbour provisions of the US Private Securities Litigation Reform Law of 1995. Investors are cautioned that all forward-looking statements involve risks and uncertainties, including, without limitation, product development delays, changing environmental regulations, the ability to attract and retain business partners, future levels of government funding, competition from other fuel cell manufacturers, competition from other advanced power technologies, competition from existing power technologies, evolving markets for generating electricity and power for transportation vehicles, and the ability to provide the capital required for product development, operations and marketing. These factors should be considered carefully and readers should not place undue reliance on Ballard's forward-looking statements. Investors are encouraged to review the section titled "Operating Results, Capital Requirements and Risks" (pages 41 to 46) in the Management's Discussion and Analysis section of Ballard's 2000 Annual Report for a more complete discussion of factors that could affect Ballard's future performance.