Fuji Heavy Industries Announces Its Development of the Turbo Parallel Hybridand Lithium-Ion Capacitor Technologies
Tokyo, August 18, 2005 – Fuji Heavy Industries, Ltd. (FHI), a global manufacturer of transportation andaerospace-related products and the maker of Subaru automobiles, today released information on its two
new technological projects for future environmentally friendly vehicles: one is the Turbo Parallel Hybrid(TPH), a revolutionary powertrain system to be applied to a hybrid electric vehicle (HEV) that thecompany plans to experimentally launch in the market in 2007; the other is the Lithium-ion capacitor (Liion), which is anticipated to broaden the possibilities for batteries in future automobiles. FHI has been
striving to create practical applications for these environmental technologies in its future vehicles.

The TPH is a strategically important technology for the power source of clean-energy vehicles and will beincorporated with Subaru’s core technologies: the Horizontally-Opposed Engine and Symmetrical AWD
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 automatictransmission. The combination of the motor generator and the boxer turbo engine, which adopts the Millercycle, creates a system that not only provides powerful and pleasurable driving in the mid-speed ranges
when turbocharger is active, as with conventional turbo models, but it also delivers excellent accelerationand fuel economy in practical use. This superb, all-range performance has been enabled by motor assist, afeature 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 since it uses a relatively more compact motor and a smaller battery.

In order to bring out even better driving performance from the TPH, FHI is planning to equip the systemwith 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 development ofsecondary batteries.

As for the Li-ion capacitor, its energy density has been drastically enhanced, while it retains the inherentlysuperior capability of instantaneous charge/discharge and the high durability of regular capacitors. The Liion 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 ofLi-ion on the negative electrode in this new capacitor, 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 incapacitors have been tested, and some progress has been made in that area of research. The application ofcertain 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’smarket.

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 thefuture, and the widespread use of this environmentally sustainable technology will certainly contribute to
the well-being of society.

To further address environmental issues and meet the social consensus on the transition from the currentburning of fossil fuels to cleaner, renewable, electricity-based secondary energy, FHI is committed to thedevelopment of power storage technologies as the key to further promote the use of hybrid vehicles, fuelcell vehicles, and electric vehicles.

Consequently, FHI has been concentrating specifically on the development of power storage systems andthe application of NEC Lamillion Energy –made high-capacity manganese Li-ion batteries to prototype
hybrid vehicles, including the Subaru R1e, 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 FHI’s power storage technologies, andthe practical advances they represent illustrate FHI’s dedication to environmental technology development.

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