Arotech Electric Bus Runs Successfully on Commercial Zinc; Achieves Range Similar to That Achieved with Original Proprietary Zinc

NEW YORK--(BUSINESS WIRE)--Nov. 1, 2004--Arotech Corporation (NasdaqNM: ARTX) announced today that a test drive conducted with its all-electric hybrid bus using commercially available zinc demonstrated performance similar to that achieved with the proprietary dendritic zinc used to date. Corroborating lab results, the bus achieved a range of 133 miles on a simulated city-cycle drive, similar to the range achieved a year ago in a similar test with the proprietary zinc. The system's efficiency has been improved as well.

Arotech' Electric Vehicle Division has developed technology that will allow its zinc-air batteries to use commercially available zinc, eliminating the need for the special zinc used to date. Arotech's technological breakthrough for utilizing readily available zinc is expected to boost commercialization plans for the zinc-air hybrid bus, which until now required heavy investments in zinc producing infrastructure.

“Rising fuel prices increase the chances of this technology becoming a reality”

"Rising fuel prices increase the chances of this technology becoming a reality", said Robert S. Ehrlich, Arotech Chairman and CEO. "We are now investigating ways to capitalize on this new breakthrough technology."

About the Electric Fuel Bus

The electric bus is powered by Arotech's Electric Fuel zinc air technology. Coupled with a pack of advanced ultra capacitors and an energy management system, the hybrid all electric bus has zero tailpipe emissions. An urban transit fleet based the Electric Fuel bus will not only improve the quality of the air - it will also help national security by reducing the dependence on imported fuel.

In recent tests the bus traveled 130-145 miles under typical city bus driving conditions, including stop and go, acceleration and constant speed. The average normal full day cycle for New York City buses is less than 90 miles. The Company believes that all-electric buses utilizing Electric Fuel's Zinc-Air technology have sufficient range to offer a practical alternative to diesel-powered buses.

The Electric Fuel All Electric Transit Bus is designed to operate as a full-size, zero emission 40-foot bus having a 20-ton gross vehicle weight (including passengers) and operating all standard bus features, including air conditioning.

About Arotech Corporation

Arotech Corporation (www.arotech.com) provides quality defense and security products for the military, law enforcement and homeland security markets, including advanced zinc-air and lithium batteries and chargers, multimedia interactive simulators/trainers and lightweight armoring.

The Battery and Power Systems Division includes Electric Fuel Battery Corporation and Epsilor Electronic Industries Ltd. The Simulation, Training and Consulting Division includes IES Interactive Training, FAAC Incorporated and Arocon Security Consulting. The Armoring Division includes MDT Armor Corp., MDT Protective Industries Ltd. and Armour of America, Incorporated.

Arotech is incorporated in Delaware, with corporate offices in New York, and research, development and production subsidiaries in Alabama, Colorado, Michigan, California and Israel.

Except for the historical information herein, the matters discussed in this news release include forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995. Readers are cautioned not to place undue reliance on these forward-looking statements, as they are subject to various risks and uncertainties that may cause actual results to vary significantly. These risks and uncertainties include, but are not limited to, risks relating to: product and technology development; the uncertainty of the market for Arotech's products; changing economic conditions; delay, cancellation or non-renewal, in whole or in part, of contracts or of purchase orders; and other risk factors detailed in Arotech's most recent Annual Report on Form 10-K for the fiscal year ended December 31, 2003 and other filings with the Securities and Exchange Commission. Arotech assumes no obligation to update the information in this release. Reference to the Company's website above does not constitute incorporation of any of the information thereon into this press release.