The sale will generate proceeds of approximately US$4 million, including estimated working capital adjustments. As a result of the transaction, Ballard expects to incur a non-cash write-down of goodwill in the fourth quarter of 2006 of approximately US$105 million. With the sale, Ballard will reduce operating cash consumption by approximately US$10 million per year. The transaction is expected to close in January 2007, subject to certain closing conditions.

"This transaction, the result of an extensive strategic review process, is consistent with our focus on our core fuel cell stack business and our commitment to continue to improve Ballard's financial performance," said John Sheridan, Ballard's President and Chief Executive Officer. "Siemens VDO is an excellent fit with the Dearborn electric drive operations. Together with our Alliance partners, DaimlerChrysler AG and Ford Motor Company, we look forward to working with Siemens VDO on next-generation fuel cell vehicle development programs."

With this transaction completed, along with the sale of its automotive system integration division in Germany in 2005, Ballard's corporate structure and scope is now fully aligned with its core fuel cell stack strategy. "We are now solidly positioned to execute on our plans to grow value in the nearer-term markets of materials handling, residential cogeneration and back-up power, and longer-term opportunities with automotive fuel cell stack technology," said Mr. Sheridan.

About Ballard Power Systems

Ballard Power Systems (TSX:BLD.TO - News)(NASDAQ:BLDP - News) is recognizeed as a world leader in the design, development and manufacture of zero-emission proton exchange membrane fuel cells. Ballard's mission is to make fuel cells a commercial reality. To learn more about what Ballard is doing with Power to Change the World®, visit http://www.ballard.com.