China BAK Battery, Inc.

(NASDAQ: CBAK)

Investor Presentation
September 2010
Safe Harbor Statement

This presentation contains “forward-looking statements”. These statements

relate to future events or to the Company’s anticipated performance
involving known and unknown risks, uncertainties and other factors that
could cause the actual results, level of activities, performance or
achievements of the Company to differ materially from the results, level of
activities, performance or achievements expressed or implied by such
statements, including changes from anticipated levels of sales, future
national or regional economic and competitive conditions, changes in
relationships with customers, access to capital, difficulties in developing and
marketing new products, marketing existing products, customer acceptance
of existing and new products, and other factors.

Accordingly, although the Company believes that the expectations reflected

in such forward-looking statements are reasonable, there can be no
assurance that such expectations will prove to be correct. The Company will
not and has no obligation to update the forward-looking information
contained in this presentation. You should not place undue reliance on
forward-looking statements.

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Stock at a Glance

Symbol: NASDAQ: CBAK

Price (8/30/10): $1.42

Basic Shares Outstanding: 63.6 million

Market Cap. (8/30/10): $90.3 million

Revenues (FY10E) $220 million

P/S (FY09): 0.4x

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Investment Summary

1 Leading lithium-ion battery manufacturer in China

2 Technology leader with leading R&D team and strong product pipeline

3 State-of-the-art manufacturing facility with focus on quality

4 Cost reduction through automation, process optimization

5 Transitioning to low-cost, high-quality manufacturer

6 Mid-term growth from cylindrical cells; longer term: E-bike, EV

7 Maintaining positive operating cash flow in 2HFY10

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Company Overview

‹ BAK Shenzhen established in 2001

‹ Leading producer of Li-ion batteries in China
‹ Corporate goal: Become a leading, global Li-ion battery supplier
‹ R&D centers in Vancouver, Shenzhen, and Tianjin; sales offices in Germany,
India, and Austin, TX
‹ Approximately 6,000 employees
FY09 Sales = $211.1 Million
Li Polymer
7%

BAK Tianjin
Cylindrical
26%

Prismatic
67%

BAK Headquarters in Shenzhen

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 Corporate Milestones

★BAK International ★BAK International

(Tianjin) founded in commenced operation
Tianjin, China ★Started supply to several
first tier notebook brands
★Reverse merger
★BAK and APO
founded in ★Engaged ★ BAK was ★ Appointed
Shenzhen, production of Li Iron awarded “China’s Jun Zou as
China Phosphate cell famous brands’ new CFO

2001 2002 2003 2004 2005 2006 2007 2008~2009 2010

★Upgraded to ★ BAK awarded the

★ Production capability
increased to 1 million
cells/day from 2002
to 2005
NASDAQ
★Shenzhen BAK started to
produce Li ion cells for laptops
863 EV Project by the
Ministry of Science and
Technology

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Diversified Product Portfolio

Cylindrical Cells Prismatic Cells

‹ Notebook computers ‹ Cell phones
‹ Only China supplier ‹ Bread-and-butter
qualified by Top-6 business today
‹ Mid-term growth
driver

Li-ion
Rechargeable
Batteries
Polymer Cells High-Power Cells
‹ PDAs ‹ Hybrid-electric
‹ Digital cameras vehicles
‹ Bluetooth headsets ‹ Light-electric
‹ MP3/ Portable vehicles
entertainment ‹ Uninterruptible
power supplies

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Lithium Battery Market

‹ Global battery market: $36B in 2009

(Cascadia Capital)
Global Lithium Battery Production (CY09)
‹ Global Li-ion battery production: 3B USA
5%
cells in 2009 (IIT)
China
‹ Lithium battery market forecasted to 22%
be $8B by 2015 (Pike Research) Japan
46%
‹ China has a leading position in
global Li-ion battery market and a
25% cost advantage (Roland Berger)
‹ HEV/EV battery market could be $6- Korea
13 billion in 2017 (Roland Berger) 27%

‹ We were ranked #2 in China and #6

globally in 2009 (IIT) Source: Institute of Information Technology, Ltd.

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 Battery Types

Nickel Metal
Nickel Cadmium Lithium-Ion Lithium Polymer
Hydride
Max Voltage (V) 1.2 1.2 3.6 3.6
Energy density Low Medium High High
Memory effect High Low Low Low
Portable consumer Small portable
Toys, lights, power Vehicles, power
Uses electronics, vehicles, electronics,
tools, cordless phones tools
UPS headsets

Revenue (%) Current capacity

Gross margin
FY 2009 (per month)
Prismatic 55% 17 million cells Above average

Cylindrical 26% 8 million cells Above average

High-Power <1% 0.6 million cells Below average

Polymer 7% 3 million cells Below average

Packs assembly for

12% 2 million cells Above average
cell phones

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Diverse, Marquee Customers

Cylindrical Prismatic

Two Leading US PC
manufacturers

Tier-1 notebook
manufacturer

Polymer High Power

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 Extensive Sales Network

FY09 Sales = $211.1 Million

Hong India Other USA
Kong 5% 1% 1%
8%

Taiwan
23%
PR China
62%

‹ CBAK sells products to international customers through direct

sales, distributors and pack manufacturers

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 BAK—Company in Transition

‹ Started as low-cost, aftermarket producer

‹ Transforming into an automated, high-
quality producer with a broad product line
‹ International presence
‹ Strengthened management team globally
‹ Made a 100 day plan to conduct a value
creation audit and strengthen core team
‹ Actively managed performance by analyzing
financial performance and setting up KPIs
for different units
Tianjin Facility

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Automated Production and
Quality Assurance

Performance test Safety test Control room

Mixing
‹ Four levels of quality control:
Design → Process → Material inflow → Output
Coating ‹ Zero defects tolerated during design and structuring

Calendering

Slitting

Tab cleaning

Tab welding

Winding

Significant process yield improvements over the last 12 months,

focus on continuous performance improvement
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Strong R&D Team

Dr. HuanYu Mao Dr. ZhongYi Deng Dr. Ulrich von Sacken Dr. Brian Way
Joined BAK in 2004 Joined BAK in 2006 Joined BAK in 2007 Joined BAK in 2007
17 years battery 15 years battery 20 years battery 16 years battery
experience experience experience experience

Shenzhen facility has the most advanced R&D Center in the PRC
‹ Team of 200 researchers and scientists
‹ Gained government recognition as post doctoral working station
‹ Maintains strong relationships with key institutes and universities

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Product Pipeline

Voltage Capacity Applications

No. Type
/V /Ah (HEV/PHEV/EV)

1 18650 3.6 2.0 EV

2 26650HP 3.2 2.2 HEV/PHEV Current products
3 26650MP 3.2 2.7 PHEV/EV
4 36800MP 3.2 5.5 PHEV/EV
5 20148130 3.2 20 HEV/PHEV
In development
6 20148240 3.2 50 EV
7 42148240 3.2 100 EV

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Demand for Global EV Market

Global Electric Vehicle Market (Sales): Scenario Analysis, 2008-2015

Source: Frost & Sullivan

2020
Scenario 2008 2009 2015 (% of total car
sales)

Optimistic 5,103 17,475 2,266,450 12%

Moderate 5,103 8,911 1,226,607 7%
Conservative 5,103 7,550 520,953 4%

By 2020, EVs could account for approximately 7-12% of total car sales
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China’s EV Market

Electric Vehicle Market: Market Breakdown By Region (Asia Pacific), 2015

Source: Frost & Sullivan
80000 169,000
70000
21%
60000

50000

40000

30000
75%

650 20000

10000

0 4%
2008 Japan China India Korea Australia Others 2015
NEV = Neighborhood Electric Vehicle NEVs
CEV =CEVs
City Electric
PHEVsVehicle PHEV = Plug in Hybrid Electric Vehicle

‹ China is the world leader in Lithium batteries for Light Electric Vehicles
‹ E-bikes have become the most popular personal transportation in towns,
current production capability 30 million e-bikes per year

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China’s EV Infrastructure Backed by
Strong Government Support

• 13 cities in China have implemented EV

Pilot programs

• According to Roland Berger Analysis, sales

of EV will account for approximately 19% of
Changchun total sales of vehicle under the pilot program

Beijing Dalian • $8,784 government subsidies will be

granted to buyers for purchasing pure
electric vehicles in: Changchun, Shenzhen,
Jinan
Hangzhou and Hefei
Hefei Shanghai
Wuhan • Buyers of plug-in hybrid cars will receive
Chongqing Hangzhou
subsidies up to $7,321
Changsha Nanchang
•Government subsidies of RMB 500,000/bus for
Kunming
Shenzhen 1,000 buses in 2010

• Government support to promote EV culture

and cut emissions creating opportunities
Cities in China have announced EV Pilot
for CBAK

Source: Roland Berger Analysis and China Daily

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Growth Strategy

• Increase production levels as relationships with current

Current and New Tier 1 OEMs evolve
Customers • Maintain share with current customers and complete
testing to receive orders from new Tier 1 OEMs

Strengthen R&D • Strengthen R&D activities to maintain and advance

Capabilities leading-edge technology, develop higher-power cells

• Capture market for E-bike and EV segments

Expand into New • Penetrate China EV/HEV market by selling to FAW, Chery
Markets and Haima, etc.
• Establish partnerships with U.S. and foreign companies

• Develop or acquire complementary technologies

Expand
Product Line • Develop new applications such as storage power
stations, UPS, power tools

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Strong Management Team

Xiangqian Li • Visionary leader in China Li-ion battery industry

Founder, • Bachelor’s in thermal energy and power
Chairman engineering, Lanzhou Railway Institute; Ph.D. in
and CEO quantitative economics, Jilin University

• 16+ years of financial management and capital-

Jun Zou markets experience
Chief Financial • CFO at GCL Silicon, BU Global Svcs for Huawei
Officer and Ericsson; prior experience with tier 1 banks
• B.S. Shanghai Intl Studies Univ.; MBA, Univ. of TX

• 20+ years in the Li-ion battery industry

Ken Broom
• GM/EVP at NEC Moli Energy and E-One Moli
Chief Operating
Energy
Officer
• B.S. in chem. engineering from Univ. of Waterloo

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Revenue, Gross Profit and Margin

$70 20%
19.0%
17.9% 58.6 18%
$60 57.6
16%
50.2 50.4
$50 14.1% 14%
44.7
Revenue ($ Million)

Gross Margin (%)

40.8
12%
$40 11.3%
10%
$30
8%
7.4% 7.5%
$20 6%

9.6 4%
8.1 9.0
$10
5.0 4.4 2%
3.0
$0 0%
2Q09 3Q09 4Q09 1Q10 2Q10 3Q10*

Revenue Gross Profit Gross Margin

*Non-GAAP gross profit and margin for the third quarter of 2010 exclude the impact of a non cash inventory provision of $5.6
million. Non-GAAP gross profit and gross margin include the impact of a competitive pricing strategy for cylindrical cells to
gain increased share in the OEM market and sales of slow-moving inventory at discount to increase operating cash flow
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 Summary Income Statement

Year ended Sept 30 ($ Million) 2007 2008 2009

Net revenues $145.9 $245.3 $211.1

Cost of revenues 120.3 214.4 184.4

Gross profit 25.6 30.9 26.8

Operating income 4.6 (0.5) (7.1)

Income (loss) before taxes 0.3 (9.0) (15.2)

Net income (loss) 0.5 (7.9) (14.0)

Comprehensive income (loss) 6.9 7.3 (14.3)

Diluted EPS $0.01 ($0.15) ($0.25)

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 Summary Balance Sheet

September 30,
($ Millions) June 30, 2010 March 31, 2010
2009
Cash and cash $24.9 $39.6 $30.7
equivalents
Total current assets 193.1 231.1 220.0

Total assets 449.0 481.1 472.1

Total current liabilities 252.2 269.1 266.3

Total liabilities 293.6 309.1 315.5

Shareholders’ equity 155.4 172.0 156.6

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Investment Summary

1 Leading lithium-ion battery manufacturer in China

2 Technology leader with leading R&D team and strong product pipeline

3 State-of-the-art manufacturing facility with focus on quality

4 Cost reduction through automation, process optimization

5 Transitioning to low-cost, high-quality manufacturer

6 Mid-term growth from cylindrical cells; longer term: E-bike, EV

7 Maintaining positive operating cash flow in 2HFY10

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Contact Information

China BAK Battery, Inc. Investor Relations Firm:

CCG Investor Relations Inc.

Mr. Jun Zou Ms. Elaine Ketchmere, Partner
Chief Financial Officer Phone: +1-310-954-1345
Phone: +86-755-8977-0598 elaine.ketchmere@ccgir.com
Email: zoujun@bak.com.cn

Mr. Crocker Coulson, President

Counsel
+1-646-213-1915
crocker.coulson@ccgir.com
Pillsbury Winthrop Shaw Pittman LLP
2300 N Street, NW
Auditor
Washington, DC 20037-1122
PKF Certified Public Accountants
Hong Kong

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Thank You
Appendix

China BAK Battery, Inc. and subsidiaries

Reconciliation of non-GAAP Gross Profit to GAAP Gross Profit

For the quarter ended

June 30, 2010

Gross Profit as reported under GAAP (1,207,145)

Add: Provision for obsolete inventories 5,573,979

Non-GAAP Gross Profit 4,366,834

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