Electric Bus Meets Federal Testing Requirements for First Time, As Market for Electric and Hybrid-Electric Buses Surges.

CHATTANOOGA, Tenn.--(BUSINESS WIRE)--Sept. 14, 1999--

An electric bus has for the first time ever completed a rigorous testing program that is required for buses purchases with federal funds. The 22-foot shuttle bus that was tested was manufactured by Advanced Vehicle Systems, Inc. (AVS) of Chattanooga, Tenn. for the Chattanooga Area Regional Transportation Authority (CARTA), which cooperated in the testing project. The market for electric and hybrid-electric buses has grown dramatically in recent months with large purchases of AVS buses by Los Angeles, Miami Beach, Tampa, Tempe and Norfolk. Later this year, AVS will begin delivering larger, more powerful bus models that will compete directly with conventional diesel transit buses.

"This test is a milestone for the electric bus industry," said CARTA Executive Director Tom Dugan. "The test results show that the AVS electric bus has the quality and durability necessary to perform in the rigorous environment of day to day transit services," he added.

The federal bus testing is a durability test designed to simulate several years' use in a shorter period of time. A new test protocol had to be designed since the Altoona, Pennsylvania Test Facility had never tested an electric bus. Tests included driving the bus for several weeks over an obstacle course with large holes and other features designed to test the strength of the bus chassis and suspension. The strength of the bus was also tested in special test gear maintained at the Altoona facility.

"The AVS-22 bus came through the tests with flying colors," said Joe Ferguson, chairman and CEO of Advanced Vehicle Systems, Inc. "Over the entire test period, the bus only required unscheduled maintenance five times, requiring the bus to be out of service for a total of only 4-1/2 hours," Mr. Ferguson stated. "It's not uncommon for some traditional, internal combustion-powered buses to have more problems," he added.

Since AVS was founded six years ago to make 12 electric buses for Chattanooga, the company has sold over 90 buses, and Chattanooga's fleet has increased to 18, the largest in the nation. Until now, electric and hybrid-electric buses were exempt from the federally mandated testing regimen because they had usually been sold in small quantities and were regarded as prototypes.

That exemption was lifted because AVS has recently begun selling its 22-foot electric and hybrid-electric buses in larger numbers:

-- In August Tempe, AZ ordered 31 hybrid-electric buses from AVS,

the largest single order for electric or hybrid electric buses in

the world, with pooled purchase options for other cities using

federal funds that could bring the total to 200 buses.

-- This summer Tampa, FL ordered 10 hybrid-electric buses from AVS,

with pooled-purchase options for other Florida cities to buy

additional buses, up to as many as 90.

-- In April Norfolk, VA initiated a shuttle service with 8 AVS

electric buses.

-- Los Angeles Department of Water & Power has ordered 25 electric

buses, 7 from AVS and 18 from a California company.

-- Miami Beach, FL has operated 7 AVS electric buses for over a year

in a downtown shuttle system similar to Chattanooga's.

Later this year, AVS will begin delivering new models of electric and hybrid-electric buses that it has designed for Chattanooga's transit agency CARTA. Ten of the new buses will be 30 and 35 feet in length and powered by a two micro-turbine generators -- supplied by Capstone MicroTurbine of Tarzana, CA -- that recharges the advanced battery pack while the bus is in operation. Because of their greater size and the increased power and range provided by the hybrid drive, these new buses will be the first practical electric alternatives to conventional full-size diesel buses. In Chattanooga, the new hybrids will replace 15 percent of the city's diesel fleet used in citywide transit.

After receiving CARTA's order for these new models, AVS initiated and recently completed an expansion that tripled its manufacturing capacity and increased its engineering capacity. Since the Tampa and Tempe orders were received, the company has begun making new expansion plans.