Valence Technology Signs MOU with S&C Electric Company to Develop Grid Connected Energy Storage Systems

Valence Technology to develop advanced battery storage solutions for premier global provider
of power transmission and distribution systems

AUSTIN, Texas (June 3, 2009) — Valence Technology, Inc. (NASDAQ: VLNC), a leading U.S.-based manufacturer and supplier of lithium iron magnesium phosphate energy storage solutions, and S&C Electric Company, Chicago-based global leader in the development of new products and services for the stationary electric power industry announce that they have signed a Memorandum of Understanding in which the two companies agree to work together to develop and evaluate products for stationary grid-connected electrical energy storage systems.

Jim Sember, Vice President of S&C’s Power Quality Products Division, said, “Renewable energy sources like wind and solar introduce ongoing and unpredictable power variations. The incredibly fast response of advanced battery storage systems allow for compensation of these fluctuations at a level not possible with today’s fossil generation plants.”

“There are tremendous growth opportunities for Valence Technology in the stationary energy storage market,” said Robert L. Kanode, President and CEO, Valence Technology. “Collaboration with S&C Electric Company will assist us in developing the right products for the right applications with advanced Valence Technology.”

About Valence Technology, Inc.

Valence Technology, headquartered in Austin, Texas, is an international leader in the development of safe, long life lithium phosphate energy storage solutions. Valence Technology is traded on the NASDAQ Capital Market under the ticker symbol VLNC. For more information, visit www.valence.com.

About S&C Electric Company

S&C Electric Company, headquartered in Chicago, IL, specializes in the development and manufacture of innovative products for the electric power industry, as well as the delivery of comprehensive, expert services for this industry.