Subaru Announces Development of Turbo Parallel Hybrid and Lithium-Ion Capacitor Technologies

-- Company continues 'green' efforts to help safeguard the environment --

CHERRY HILL, N.J., Sept. 7 -- Subaru of America, Inc. today announced that its parent company Fuji Heavy Industries, Ltd. (FHI) is developing new technology for future more environmentally friendly vehicles: the Turbo Parallel Hybrid (TPH) and Lithium-ion capacitor (Li-ion). Subaru is striving to create practical applications for these environmental technologies in its future products.

In addition to these new developing technologies, Subaru continues to manufacture and market PZEV (Partial Zero Emission Vehicles) at the Subaru plant in Lafayette, Ind., that was the first auto assembly plant to ever achieve zero landfill status and that is actually recognized as a Backyard Wildlife Habitat by the National Wildlife Federation.

"Subaru always has been and will continue to be committed to safeguarding the natural environment that so many of our customers avidly enjoy," said Kunio Ishigami, chairman, president and CEO, Subaru of America, Inc. "We will continue to make these technologies a priority in our product development, manufacturing and business processes."

New Technology

The Turbo Parallel Hybrid (TPH) is a revolutionary powertrain system to be applied to hybrid electric vehicles (HEV) that the company plans to test launch in the Japanese market in 2007. The TPH is a strategically important technology for the power source of clean-energy vehicles and will be incorporated with the Subaru core technologies including the horizontally- opposed Subaru Boxer Engine and Symmetrical All-Wheel-Drive System. FHI has been developing the TPH in view of its future mass production.

The TPH system places a thin, 10-kW motor generator between a vehicle's engine and its automatic transmission. The combination of the motor generator and the turbo-charged Subaru Boxer engine, which adopts the Miller cycle, creates a system that not only provides power in the mid-speed ranges when the turbocharger is active, as with conventional turbo models, but it also delivers excellent acceleration and fuel economy for practical use. This superb, all-range performance has been enabled by motor assist, a feature that is designed to boost engine torque at low revolutions.

Compared to the SSHEV (Sequential Series Hybrid) system that FHI had previously developed, the TPH excels in cost performance as it uses a more compact motor and a smaller battery. In order to bring out even better driving performance from the TPH, Subaru is planning to equip the system with high-performance manganese Lithium-ion batteries, which are currently under development at NEC Lamillion Energy, Ltd. That company was jointly established by NEC and FHI in 2002 for the development of secondary batteries.

The Lithium-ion capacitor (Li-ion) is anticipated to broaden the possibilities for batteries in future automobiles. The Li-ion capacitor drastically enhances energy density, while retaining the inherently superior capability of instantaneous charge/discharge and the high durability of regular capacitors. The Li-ion capacitor's negative electrode uses newly developed Li-ion occlusive carbon material, while its electrolyte is also made of Li-ion. The technique called pre-doping enables occlusion of large amount of Li-ion on the negative electrode in this new capacitor, which helps boost the capacity of the negative electrode, and increases the electrical potential difference, thereby making achievement of high voltage possible without deterioration in positive electrode performance. Furthermore, the principle of the Li-ion capacitor holds the potential for greater versatility and increased performance of capacitor occlusion. Many new materials to be used for high-energy accumulation in capacitors have been tested, and some progress has been made in that area of research. The application of certain new materials to the positive electrode, combined with the pre-doping technique of the Li-ion capacitor, will theoretically double the estimated accumulation capacity of capacitors available in today's market.

FHI is currently conducting performance tests on prototype cells of the new Li-ion capacitor. The eventual successful commercialization of Li-ion capacitors for compact cars would open up many other business opportunities, including helping to meet the increased demand for new hybrid buses, trucks, and passenger vehicles. This new capacitor also has the potential to be an alternative to conventional lead batteries in the future.

Subaru is committed to the development of power storage technologies as the key to further promote the use of hybrid vehicles, fuel cell vehicles, and electric vehicles. Consequently, FHI has been concentrating specifically on the development of power storage systems and the application of NEC Lamillion Energy-made high-capacity manganese Li-ion batteries on prototype hybrid vehicles, including the Subaru R1e (sold in Japan), for further testing and evaluation. This approach has allowed the company to efficiently acquire added technical value with minimum investment and to solve issues concerning the practical application and mass production of high-capacity manganese Li-ion batteries.

The TPH and Li-ion capacitor development projects are the latest in the company's power storage technologies, and the practical advances they represent illustrate the dedication of Subaru to enhance its environmental technology development.

PZEV Vehicles

Subaru currently manufactures PZEV vehicles in its U.S. plant. PZEV vehicles meet California's SULEV (Super-Ultra-Low-Emission Vehicle) exhaust emission standard for 15 years/150,000 miles. Additionally, they meet the zero-evaporative emission standard and have a 15 year/150,000 mile emission defects and performance warranty. The SULEV standard is 90 percent cleaner than the average 2003 model year vehicle.

According to the Air Resources Board of the California Environmental Protection Agency, gasoline vehicles meeting PZEV emissions standards sometimes even have lower emissions than some hybrid or alternative fuel vehicles. These vehicles with PZEV emissions rating have such tight pollution controls, and the burning of fuel is so complete, that in very smoggy urban areas, exhaust out of the tailpipe can actually be cleaner than the air outside. In fact, 28 percent of all 2005 model year Subaru vehicles sold in the state of California met the PZEV requirements.

What separates the Subaru PZEV vehicles from other competitors is that no sacrifice in performance was made to achieve the emissions rating. In fact, Subaru makes the most powerful PZEV engine available in the U.S. today.

Subaru of Indiana Automotive (SIA)

The average household sends more to a landfill than the Subaru manufacturing plant in Lafayette, Indiana. The Subaru plant is the first auto assembly plant to achieve zero landfill status - nothing from its manufacturing efforts goes into a landfill. It's all reused and recycled.

Subaru was also the first auto assembly plant in the U.S. to be smoke free in 1994. In 1998 it was the first auto assembly plant in the U.S. to be ISO 14001 Certified. In 2002, it became the first auto assembly plant in the U.S. with an on-site solvent recovery system that produces dry still bottoms. And last year, the plant became the first auto assembly plant to dry paint and wastewater sludge on-site.

The Subaru plant was determined to be the first auto assembly plant in the U.S. to be designated a Backyard Wildlife Habitat by the National Wildlife Federation in 2003. Deer, coyotes, beavers, blue herons, Canadian geese, rabbits, squirrels, meadowlarks, ducks and other animals live on the plant property in peaceful coexistence with the Subaru plant.

About Subaru of America, Inc.

Subaru of America, Inc. is a wholly owned subsidiary of Fuji Heavy Industries Ltd. of Japan. Headquartered in Cherry Hill, N.J., the company markets and distributes Subaru Symmetrical All-Wheel Drive vehicles, parts and accessories through a network of nearly 600 dealers across the United States. Subaru makes the best-selling All-Wheel Drive car sold in America based on R.L. Polk & Co. new vehicle retail registration statistics calendar year-end 2004. For more information visit http://www.subaru.com/.