Stuart Energy Partners With The Hydrogen Car Company

TORONTO--Jan. 1, 20043, 2004--Stuart Energy Systems Corporation (TSX:HHO) announced today that it has formed a strategic partnership with the Hydrogen Car Company (HCC), led by S. David Freeman, former Chairman of the California Power Authority. HCC is a privately-held, California-based company focused on developing and marketing a new generation of cars and trucks that are powered by hydrogen internal combustion engines (H2ICEs). To support the sale of its vehicles, HCC will exclusively offer Stuart Energy hydrogen fueling infrastructure solutions to its customers, ranging from the Personal Energy Stations (PES), under development for home fueling, to large scale Hydrogen Energy Stations (HES), currently being deployed around the world for fleet fueling and power applications. In addition to being an exclusive hydrogen infrastructure partner, Stuart Energy is also a strategic investor in HCC.

HCC has partnered with Carroll Shelby, through Carroll Shelby Licensing Inc., to jointly develop a full line of H2ICE-powered vehicles that will be manufactured by Shelby and sold and serviced by HCC directly. HCC and Shelby plan to modify the engines and fuel storage systems of new and existing sport coupes, sport utility vehicles and pick-up trucks to run on hydrogen, with production expected to start in 2004. The first vehicle, an H2ICE-powered Shelby Cobra, is currently being demonstrated by HCC. Carroll Shelby is the creator of the Shelby Cobra and is legendary in the automotive world for developing, racing and marketing high-performance cars for more than 40 years.

"For hydrogen to be widely adopted as a replacement for fossil fuels, we must get commercial products in the hands of consumers," commented Jon Slangerup, President and CEO of Stuart Energy. "We believe our strategic partnership with HCC will increase the demand for our innovative hydrogen infrastructure products and accelerate the mass adoption of hydrogen as a clean, safe fuel."

"We have an historic opportunity to fundamentally change the fuel we use to power our cars," said HCC's Chairman, S. David Freeman. "We develop and market innovative vehicles that deliver critical energy security and environmental benefits needed today. We have chosen the commercially proven ICE platform to power our hydrogen vehicles because it is able to meet the reliability and performance demands of consumers now and well into the future. We don't have to wait decades for clean cars - they are available today."

Stuart Energy is the leading global provider of water electrolysis-based hydrogen fueling infrastructure and has already installed several HES fueling systems in California that span from Richmond to Chula Vista.

"I am both encouraged and excited by California Governor Schwarzenegger's recent State of the State address in which he reiterated his commitment to the environment and his strong support of developing a 'Hydrogen Highway' for California," commented Jon Slangerup. "HCC and Stuart Energy are well positioned to deploy both the vehicles and the fueling infrastructure to support this visionary initiative."

About Stuart Energy

Stuart Energy Systems Corporation (TSX: HHO) is the world leading developer and supplier of integrated hydrogen solutions that use the Company's proprietary hydrogen generation water electrolysis technology with products from corporate partners to serve existing and emerging markets for power generation, transportation and industry. The Company's website address is http://www.stuartenergy.com.

About HCC

The Hydrogen Car Company (HCC) develops and markets H2ICE vehicles that enable consumers to reduce air pollution and dependency on foreign oil, while at the same time meeting government-imposed environmental mandates without compromising performance, reliability and comfort. Operating on clean hydrogen, HCC's H2ICE vehicles use existing, proven technologies to deliver the environmental benefits of a hydrogen fuel cell, but at a fraction of the complexity and cost. HCC's vehicles have all the power and drivability of a normal gasoline-powered vehicle, but instead of guzzling gasoline they run on clean-burning hydrogen made in America.