China BAK Funded by National 863 Program for its Electric Vehicles Battery Project

SHENZHEN, China, Dec 29 /PRNewswire-Asia-FirstCall/ — China BAK Battery,
Inc. (“China BAK”, or “BAK”) (Nasdaq: CBAK), one of the largest lithium-ion
battery cell manufacturers in the world, as measured by production output,
today announced its Electric Vehicles Lithium-phosphate Power Battery
Industrialization Project (the “Project”) has been selected as a key project
of the PRC’s National High Technology Research and Development Program, or
“863 Program”, by the PRC’s Ministry of Science and Technology. Under expected
terms of the official election, China BAK will receive a grant of up to $3.1
million from the PRC’s central government and certain subsidy grants, amount
to be determined, from the Shenzhen Municipal Government in coming quarters.

BAK International (Tianjin) Limited, China BAK’s wholly-owned subsidiary,
which focuses on the R&D, manufacturing and distribution of advanced
high-power lithium-phosphate cells, will lead the commercialization of the
Project. It aims to commercialize the production of high-power
lithium-phosphate cells for use in light electric vehicles and hybrid electric
vehicles.

The 863 Program is one of the most important national science and
technology programs in China. It was launched in March 1986 by the PRC’s
central government as a national strategic development program to optimize and
upgrade China’s hi-tech development in the key fields of IT, biology, energy,
agriculture, pharmaceutical, new material, manufacturing and automation, as
well as resource and environment. The selection process for 863 Program is
highly rigorous and competitive.

China BAK has many years of experience in the R&D, manufacturing and
distribution of high-power lithium-phosphate cells. It began commercial
production of lithium-phosphate cells at its Shenzhen facility for use in
cordless power tools in October 2005, and for mining lamps in March 2007. In
December 2006, its new subsidiary, BAK International (Tianjin) Limited, was
incorporated to focus on the R&D, manufacturing and distribution of
lithium-phosphate cells. China BAK has since shifted all lithium-phosphate
cell manufacturing machinery, equipment and personnel from its Shenzhen
facility to its Tianjin facility. In October 2008, its Tianjin facility
completed construction of its first lithium-phosphate cell production line,
and initiated trial production of lithium-phosphate cells. It has also been
engaging in the research and development of lithium-phosphate cells for use in
light electric vehicles and hybrid electric vehicles, and has been actively
seeking market opportunities for such applications.

“To be selected to participate in the 863 Program, a symbol of high
technology in China, will further enhance our reputation as a hi-tech battery
manufacturer and increase our customers’ trust in our products. It is a great
opportunity for BAK to commercialize its high-power lithium-phosphate cells
production by seeking cooperation and leveraging supply chain in the
industry,” commented Xiangqian Li, CEO of China BAK.

About China BAK Battery Inc.

China BAK Battery Inc. is one of the largest manufacturers of
lithium-based battery cells in the world, as measured by production output. It
produces battery cells that are the principal component of rechargeable
batteries commonly used in cellular phones, notebook computers, portable
consumer electronics, such as digital media devices, portable media players,
portable audio players, portable gaming devices and PDAs (Personal Digital
Assistants), and other applications, such as cordless power tools and mining
lamps. China BAK Battery, Inc.’s 3.0 million square foot facilities are
located in Shenzhen and Tianjin, PRC, and have been recently expanded to
produce new products.

Safe Harbor Statement

This press release contains forward-looking statements, which are subject
to change. The forward-looking statements are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995. All
“forward-looking statements” relating to the business of China BAK Battery,
Inc. and its subsidiary companies, which can be identified by the use of
forward-looking terminology such as “believes,” “expects” or similar
expressions, involve known and unknown risks and uncertainties which could
cause actual results to differ. These factors include but are not limited to
risks related to China BAK’s business and risks related to operating in China.
Please refer to China BAK’s Annual Reports on Form 10-K for the fiscal years
ended September 30, 2006, 2007 and 2008, for specific details on risk factors.
Given these risks and uncertainties, you are cautioned not to place undue
reliance on forward-looking statements. China BAK’s actual results could
differ materially from those contained in the forward-looking statements.
China BAK undertakes no obligation to revise or update its forward-looking
statements in order to reflect events or circumstances that may arise after
the date of this release.

SOURCE China BAK Battery Inc.