2009 Axion Core Message

•75,000 sq. ft. mfg facility •55,000 sq. ft. new facility

Advanced Lead Acid Battery Development and Manufacturing

3

SAFE HARBOR

Certain statements in this presentation are "forward-looking statements" within the meaning of the Private Securities Litigation Act of 1995. These statements include, without limitation, statements concerning the Company's ability to expand its manufacturing capabilities and bring its new PbC® based battery products to market, the Company's belief that its completed products will be the only class of advance battery of its kind and that it will be a viable replacement for older generation lead-acid batteries. These forward-looking statements are based on our current expectations and beliefs and are subject to a number of risk factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Such risks and uncertainties include the risk for the Company to complete its development work, as well as the risks inherent in commercializing a new product (including technology risks, market risks, financial risks and implementation risks, and other risks and uncertainties affecting the Company), as well as other risks that have been included in filings with the Securities and Exchange Commission, all of which are available at www.sec.gov. We disclaim any intention or obligation to revise any forward-looking statements, including, without limitation, financial estimates, whether as a result of new information, future events, or otherwise.

• Operating ManagementTom Granville, CEO and Director

• 25 years as CEO and general partner in contracting, real estate and investment entities

Don Hillier, CFO• 20 years financial experience in public and

private companies engaged in manufacturing and service industries

Dr. Edward Buiel, VP and CTO• 12 years developing materials for lithium ion

and supercapacitor energy storage devices• Former project leader of the Energy Storage

Group at MeadWestvaco

Dr. Bob Nelson, VP of Manufacturing• 30 years lead acid battery R&D and

manufacturing

• Independent DirectorsBob Averill, Director

• Founder of three orthopedic implant companies

Dr. Howard Schmidt, Director• Exec. Director Rice University Carbon

Nanotechnology LabGlenn Patterson, Director

• Former CEO Oregon Electric, $130 million electric utility infrastructure contractor with a manufacturing division

Stan Hirschman, Director• President C Point, extensive public company

experience. Dr. Igor Filipenko, Director

• International entrepreneur with interests in more than a dozen companies worldwide ranging from manufacturing to oil exploration

Michael Kishinevsky, Director• Lawyer and entrepreneur. President of a

carbon company S Walker Wainwright, Director

• 30 years investment banking experience

EXPERIENCED MANAGEMENT TEAM

Standard (Lead-Lead)

Activated Carbon Electrodes

PbC® technology (Lead-Carbon)

TECHNOLOGY PLATFORM

• Commercializing new Advanced Lead Acid Battery TechnologiesPbC® Technology (Lead Carbon)

• Higher performance• Less Lead = Less Weight• Significantly longer life• Faster recharge time• Higher cycle efficiency

• ManufacturingStandard lead acid batteries

• Contract manufacturing• Branded lead acid battery

Manufacturing carbon electrodes• Target Markets

HEV / EV / PEV VehiclesHybrid Truck/Bus/TrainGrid-based Energy StorageTruck Auxiliary Power UnitMilitary Applications

COMPANY OVERVIEW

MARKET DRIVERSEU legislation on CO2 emission (2012: 160 to 120 g CO2/km for 65% of the fleet ramping to 100% by 2015.) US legislation on mileage (2015: mileage from 20 to 35 miles/gallon)

Car manufacturer required to improve fuel efficiency

=> New focus on MICRO HYBRIDS that will use ADVANCED LEAD ACID BATTERIES

CURRENT CARS

MICROHybrid

MILDHybrid

FULLHybrid

EV PHEV

FULL ELECTRIC DRIVECAPABILITY (Limited)

START/STOP+REGEN BRAKINGSTART/STOP

HYBRID VEHICLES ELECTRICALVEHICLES

Full ELECTRIC DRIVE10-100+ MILESExample:

HYBRID VEHICLES

Example Micro Hybrid: Saturn Vue

Limited Engine Modification

• Starter/Alternator replaced with Integrated Starter/Generator

• Remarkably similar to the standard alternator as shown in the picture

• 2 electric machines replaced by 1 – almost cost neutral for the drive train

Hybrid Types

Propulsion source Fuel / CO2savings

Applications

Micro hybrid

ENGINE ONLY

Electric motors provide functions such as auxiliary power, starter/generator, managing engine stop/start and may or many not use regenerative braking to charge the battery

5% to 15%

Audi A4 TDi Concept eBMW Ed ‘EfficientDynamics’Fiat 500 PUR-0² / Ford ECOnetic series Hyundaï i20 Blue / Kia Cee’d ISG Stop&GoMercedes ‘BlueEfficiency’ C classToyota Yaris /Auris Stop&Start

Mild hybrid

ENGINE + ELECTRIC MOTOR BOOST

Electric motor provides supplementary torque to the gasoline or diesel engine, but is never the sole source of driving power (up to 10% of the maximum engine power)

15% to 25%

Audi A1 Sportback ConceptBMW ActiveHybrid /Lexus HSCitroën C4 HYmotion2 / Honda Civic HybridHyundaï Sante Fe HybridKia Cee’d/Soul Hybrid / Mazda KiyoraMercedes BlueHybrid S ClassToyota Accord Hybrid

Full hybrid or strong hybrid

ENGINE OR ELECTRIC MOTOR Vehicle can be driven by the electric motor or the engine independently or together (electric motor provides around 40% of the maximum engine power as additional torque)

25% to 50%

Chevrolet VoltFord EscapeHonda Insight Toyota Prius

EV or PHEV or Series hybrid

ELECTRIC MOTORSole driving power source (no gas engine)

100% Bollore/Pininfarina B0Renault Zero Emission ConceptMini « E » / Mitsubishi iMiEVToyota FT-EV / Venturi Voltage

HYBRID VEHICLES

EU CO2 Reduction and US Café Requirements

95 g CO2/km**100%Long term (2020?)Europe

130 g CO2/km**1002015Europe

130 g CO2/km**802014Europe

130 g CO2/km**752013Europe

130 g CO2/km**652012Europe

35.5* MPG 1002016US

Requirement% of FleetDateRegion

*- Current US average fleet fuel economy = 20 MGP.**-130 g CO2/km = 42.4 MPG

EU CO2 Reduction Requirements

• Average Gasoline Carbon Content: 2,421 g/US Gallon1

• 1 Gallon Gasoline produces 2,421 X 44/12 = 8,877 g CO2

• EU Requirement = 130 g CO2/km

8,877 g CO2/gal X 0.621 mile/km X 1 km/130 gCO2 = 42.4 mpg

(based on US gallon, 48.7 miles/UK gal)• M = 5513 / C where

M = mileage in mpg (US gallon)C = CO2 emissions per km (g CO2/km)

1 Source: US EPA

MICROHybrid

MILDHybrid

FULLHybrid

EV PHEV

2013: 17M Hybrid cars

2008: 1.1M Hybrid cars

Source: Valeo

20080.4M Cars

80%2013

13.6M Cars

1.2M Cars 0.56M

Cars 12%

EUROPEAN HYBRID VEHICLE MARKET 2008-2013

2.0M Cars

7%<1%

Supplemental Slides

Lead Acid vs. PbC®battery in Micro Hybrid

1 Source: Ford Motor Company2 NiMH end of life power performance degrades with time3 Based on 3,000 A S discharge, time required to recover discharged energy4 $1,561 (Nissan Altima NiMH Hybrid) and $4,770 (Saturn Vue NiMH Hybrid) Cost Premiums (Source Deutsche

Bank)

1,500 -4,8004

300

250

150

Cost ($)

17-25 s

17 s

24 s

500 s

Time Between

Start/Stop Events3

Full90-602200NiMH

Full90200PbC®battery (Future)

Mild84150PbC®battery (Present)

Micro30120VRLA

Max Level of Hybrid

Energy Efficiency

(%)

Charge Current (Max)

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AXION PowerCube™

• Axion has developed solutions for renewable energy and distributed utility grid energy storage with the PowerCube™,an advanced Battery Energy Storage System (BESS).

• Utility/industrial energy storage deviceUp to 1 MW per cubeScalable up to 25 MW

• Applications Power qualityPower arbitrageOutage protection

AXION PowerCube™

• Target MarketsUtilitiesGrid based electrical energy storageIndustrial energy storageRenewableMilitary

• EconomicsDOE/Sandia target < 1,000 $/KWPowerCube < 1,000 $/KW total installed cost

• PbC Battery <500 $/KWOther battery technologies > 1,000 $/KW total installed cost

• Most other advanced batteries > 1,000 $/KW• Traction

Proposals out: 4 demonstration facilities (250-3,000 KW)Projects: 2 approved, 2 under review

AXION PowerCube™

Automotive MarketBMW ● FIAT ● FORD ● PSA ● Renault ● Suzuki ● Toyota ● VW ● VDAIndustrial and Motive Power MarketJohn Deere ● Ingersoll Rand ● Ryder ● Penske ● AT&T ● Bell Canada Crown Equipment ● Emerson Network Power ● Norfolk Southern CorpLockheed Martin ● York Electro-Mechanical Corporation

Wind Energy Storage Market Utility Grid Support Market

PV Storage Market Industrial UPS Market

CURRENT CUSTOMERS

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MILITARY APPLICATIONS

• Oct, 2008 Axion awarded $1.2 Million in Federal funding to develop PbC® batteries for Navy and Marine Corps Vehicle Applications

MANUCTURING PARTNER: EXIDE

• Exide is one of the largest lead battery manufactures in the world

• Exide currently sells to virtually all automotive OEM’s

• Axion’s PbC® Battery is an enabling technology for more efficient micro and mild hybrid vehicle technologies

VRLA fails cycle life and efficient targets

Other advanced batteries are significantly more expensive and require significant vehicle modification

• Axion will sell PbC® electrodes to ExidePossibly license technology later

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MANUCTURING PARTNER: EAST PENN

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AXPW - INFORMATION

Symbol AXPW

Corporate Headquarters New Castle, PA

Stock Price (09/03/09) || 52-Week Range $2.35 || $0.87 – 2.75

Shares Outstanding (06/30/09) 26,453,437

Market Capitalization $62M

Volume (daily 90-day average) 18,028

Debt (06/30/09) $0

Cash (06/30/09) $950,013

Insider Ownership 59%

Institutional Ownership Shares 47%

Full-time Employees 51

Fiscal Year Dec 31

Accounting Firm Rotenberg & Co., LLP

AXPW - INFORMATION

* Officers, Directors and 5% or greater stockholders

Total Insiders *

Common Stock 26,453,437 16,500,330

Convertible Preferred Stock(assuming full conversion into common) 9,355,276 6,026,388

Common Stock Purchase Warrants(average exercise price $2.91) 14,128,772 11,273,536

Common Stock Purchase Options(average exercise price $2.98) 1,911,905 1,335,455

Fully Diluted(after receipt of $46,803,451. in warrant and

option exercise proceeds)51,918,140 34,135,709

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SUMMARY

• Sales and manufacturing of conventional lead acid batteries

Utilize current manufacturing capacity• Contract manufacturing• Axion branded batteries

• Sales and manufacturing of Axion PbC®batteries

Fulfill funded and internal projectsManufacturing carbon electrodes

• Pursue military contracts• PowerCube™ development and sales• Leverage Exide and East Penn relationships for

HEV applications• Continue to explore government grant

opportunities

CONTACT INFORMATION

Axion Power International, Inc.New Castle, Pa

Tel: +1-724-654-9300www.axionpower.com

Stephanie [email protected]