ZENN Motor Company Reports Third Quarter Fiscal 2008 Results

TORONTO, ONTARIO, Aug 27 (MARKET WIRE) --
ZENN Motor Company Inc. ("ZMC" or the "Company")(TSX VENTURE: ZNN) today
announced the financial results for the three months and nine months
ended June 30, 2008. All amounts are expressed in Canadian dollars unless
otherwise indicated.

Financial Results

For the current quarter and nine months ended June 30, 2008, gross
revenue was $977,305 and $2,618,477 respectively compared to $862,256 and
$1,646,443 in the corresponding prior periods. The Company recorded a
provision for rebates in the current three and nine month periods in the
amount of $14,980 and $314,574 relating to a marketing program initiated
in September 2007. Unit sales increased in the current period to 67 and
190 year to date from 60 and 113 in the comparable prior periods.

Net loss for the three months and nine months ended June 30, 2008 was
$1,910,304 and $5,425,895 or $0.06 and $0.18 per share respectively
compared with a net loss of $1,566,955 and $4,316,052 or $0.06 and $0.17
per share respectively for the corresponding periods in the prior year.

At June 30, 2008 the Company had working capital of $16,966,685 including
cash and cash equivalents of $16,181,151 compared to working capital of
$6,944,190 including cash and cash equivalents of $6,221,257 as at
September 30, 2007.

The Company is pleased to report progress on a number of key areas. The
2008 ZENN with its innovative air conditioning system has opened up
additional markets in the southern United States. In the current quarter,
Florida represented 22% of the orders booked in the period. "The level of
activity in Florida sets a positive trend for future periods" says Ian
Clifford, CEO of ZENN Motor Company. "We know from experience, that the
payback on targeted marketing programs can be several quarters later, so
to see this immediate uptake is a strong endorsement for our 2008 ZENN."

California, where the Company conducted a marketing campaign in late 2007
continues to be an active market. In the current fiscal quarter,
California represented 38% of orders booked, an increase from 15% in the
same quarter of the previous year.

The Company also completed a short form prospectus offering of common
shares in the quarter ended June 30, 2008. On May 30, the Company issued
4,060,000 common shares for gross proceeds of $15,225,000. "There was
significant interest in our long-term business strategy when we were
marketing our shares" says Clifford. "The additional capital allows us to
execute on the development of new products and strategies relating to the
highway capable cityZENN(TM) and the ZENNergy(TM) drivetrain projects for
new zero emission vehicles and the retrofit of used internal combustion
vehicles from gas to electric drive".

The Company's strategic partner in power storage technology, EEStor, Inc.
announced through a press release on July 29, 2008 its progress in
advancing the commercialization efforts of its technology. The Company
viewed this announcement as confirmation that significant progress is
being made toward the third-party verified permittivity results and
ultimately, the development of a commercial product.

Additional Information

Readers are encouraged to read the Company's unaudited consolidated
financial statements for the three months and nine months ended June 30,
2008, the corresponding Management's Discussion and Analysis, the
Company's Annual Information Form dated January 21, 2008 and the
Company's audited financial statements for the years ended September 30,
2008 and 2007, all of which are available at www.sedar.com or the
Company's website at www.ZENNcars.com.

The Company's Annual and Special Meeting of shareholders held on March
28, 2008 was broadcast live as a webcast and is available on-line through
the Company's website.

ABOUT ZENN Motor Company Inc.

ZENN Motor Company is dedicated to being the global leader in producing
zero emission transportation solutions for markets around the world. The
Company's current ZENN car is the perfect vehicle for urban commuters,
fleets (such as resorts, gated communities, airports, college and
business campuses, municipalities and parks), the environmentally
conscious driver, and consumers who just want to save money. The ZENN is
sold through a growing network of retailers across the United States.

The ZENN is a fully electric low speed vehicle (LSV) with European
styling and appointments that offers customers tremendous operational
cost savings compared to a vehicle powered by an internal combustion
engine. Recently named "Commuter King of the Plug-ins" by Newsweek
Magazine, the 2008 ZENN is ultra nimble quick from a stop and perfect for
small parking spaces and San Franciscan slopes.

The potential commercialization of the high power-density ceramic ultra
capacitor being developed by the Company's strategic partner, EEStor Inc.
for future ZENN vehicles will enable them to travel at highway speeds and
extended distances comparable to a traditional car but at a fraction of
the cost.

Forward-looking Statement

Certain statements in this release may contain "forward-looking
statements" within the meaning of the United States Private Securities
Litigation Reform Act of 1995 and applicable Canadian securities
legislation. Generally, these forward-looking statements can be
identified by the use of forward-looking terminology such as "plans",
"expects" or "does not expect", "is expected", "budget", "scheduled",
"estimates", "forecasts", "intends", "anticipates" or "does not
anticipate", or "believes", or variations of such words and phrases or
state that certain actions, events or results "may", "could", "would",
"might" or "will be taken", "occur" or "be achieved". Forward-looking
statements are subject to known and unknown risks, uncertainties and
other factors that may cause the actual results, level of activity,
performance or achievements of ZENN Motor Company Inc. to be materially
different from those expressed or implied by such forward-looking
statements including but not limited to those risk factors discussed in
the Company's most recent Annual Information Form. There can be no
assurance that such statements will prove to be accurate, as actual
results and future events could differ materially from those anticipated
in such statements. Accordingly, readers should not place undue reliance
on forward-looking statements. ZMC does not undertake to update any
forward-looking statements, except in accordance with applicable
securities laws.

ZENN Motor Company Inc.
Consolidated Balance Sheet

--------------------------------------------------------------------------
Jun. 30 2008 Sep. 30 2007
(unaudited) (audited)
$ $
--------------------------------------------------------------------------

Assets
Current
Cash and cash equivalents 16,181,151 6,221,257
Accounts receivable 295,306 272,946
Inventory 1,885,877 1,442,862
Prepaid expenses and other assets 296,856 642,061
------------ ------------
18,659,190 8,579,126
Property, plant and equipment 332,313 353,047
Deferred development costs 169,915 -
Rental deposits 94,978 100,535
EEStor technology rights 1,510,145 1,510,145
Equity investment in EEStor, Inc. 2,857,815 2,857,815
------------ ------------

23,624,356 13,400,668
------------ ------------
------------ ------------

Liabilities
Current
Accounts payable and accrued liabilities 1,692,505 1,634,936
------------ ------------
Shareholders' Equity
Capital stock 41,198,210 26,081,655
Contributed surplus 1,158,397 584,455
Warrant capital 477,425 575,908
Deficit (20,902,181) (15,476,286)
------------ ------------

21,931,851 11,765,732
------------ ------------

23,624,356 13,400,668
------------ ------------
------------ ------------

ZENN Motor Company Inc.
Consolidated Statement of Operations and Deficit
For the three months and nine months ended June 30
(unaudited)

--------------------------------------------------------------------------
Three Months Nine Months
------------ -----------
2008 2007 2008 2007
---- ---- ---- ----
$ $ $ $
--------------------------------------------------------------------------

Gross revenue 977,305 862,256 2,618,477 1,646,443
Provision for rebates 14,980 - 314,574 -
---------- ---------- ---------- ----------
Net revenue 962,325 862,256 2,303,903 1,646,443

Cost of sales 933,104 857,954 2,200,804 1,623,375
---------- ---------- ---------- ----------

Gross profit 29,221 4,302 103,099 23,068

Expenses
Modification and
engineering 155,202 128,059 488,894 395,511
General and
administrative 1,145,950 896,057 3,427,189 2,703,596
Marketing and promotion 645,307 375,094 1,625,274 1,012,712
Foreign exchange
loss (gain) 12,279 22,009 (15,943) 36,505
Amortization 39,331 24,403 106,204 63,517
Inventory write-down - 181,817 59,367 227,500
---------- ---------- ---------- ----------
1,998,069 1,627,439 5,690,985 4,439,341
---------- ---------- ---------- ----------

Loss from operations (1,968,848) (1,623,137) (5,587,886) (4,416,273)
Interest income 58,544 56,182 161,991 100,221
---------- ---------- ---------- ----------

Net loss for the period (1,910,304) (1,566,955) (5,425,895) (4,316,052)

Deficit, beginning
of period (18,991,877) (11,249,241) (15,476,286) (8,500,144)
---------- ---------- ---------- ----------

Deficit, end of
period (20,902,181) (12,816,196) (20,902,181) (12,816,196)
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------

Loss per share,
basic and diluted (0.06) (0.06) (0.18) (0.17)

Weighted average number
of shares outstanding 30,763,614 27,575,573 29,546,615 25,013,421

ZENN Motor Company Inc.
Consolidated Statement of Cash Flows
For the three months and nine months ended June 30
(unaudited)

--------------------------------------------------------------------------
Three Months Nine Months
------------ -----------
2008 2007 2008 2007
---- ---- ---- ----
$ $ $ $
--------------------------------------------------------------------------

Cash flows from (to)
operating activities
Net loss for period (1,910,304) (1,566,955) (5,425,895) (4,316,052)
Add items not
affecting cash flow
Amortization 39,331 24,403 106,204 63,517
Stock based
compensation 211,748 112,444 573,943 283,481
---------- ---------- ---------- ----------
(1,659,225) (1,430,108) (4,745,748) (3,969,054)

Changes in non-cash
working capital
Accounts receivable 67,722 (13,407) (22,362) (208,606)
Inventory (229,796) 611,948 (443,015) (930,535)
Prepaid expenses and
other assets 325,659 17,579 345,200 102,278
Accounts payable and
accrued liabilities 169,665 (46,458) 57,569 (276,779)
---------- ---------- ---------- ----------
(1,325,975) (860,445) (4,808,356) (5,282,696)
---------- ---------- ---------- ----------

Cash flow from (to)
investing activities
Property, plant and
equipment (53,565) (48,487) (85,464) (189,412)
Deferred development
costs (123,336) (16,800) (169,915) (60,720)
Rental deposits (3,658) 387 5,557 (28,228)
Technology rights - - - (643,170)
Shares of EEStor, Inc. - (2,857,815) - (2,857,815)
---------- ---------- ---------- ----------
(180,559) (2,922,715) (249,822) (3,779,345)
---------- ---------- ---------- ----------

Cash flow from (to)
financing activities
Issue of shares, net
of costs 14,086,598 4,766,615 14,086,598 14,097,782
Exercise of warrants - - 931,474 -
---------- ---------- ---------- ----------
14,086,598 4,766,615 15,018,072 14,097,782
---------- ---------- ---------- ----------

Increase (decrease) in
cash and cash
equivalents during
period 12,580,064 983,455 9,959,894 5,035,741
Cash and cash
equivalents at
beginning of period 3,601,087 6,269,248 6,221,257 2,216,962
---------- ---------- ---------- ----------
Cash and cash
equivalents at
end of period 16,181,151 7,252,703 16,181,151 7,252,703
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------

The TSX Venture Exchange does not accept responsibility for the
adequacy or accuracy of this release.

Contacts:
ZENN Motor Company Inc.
Catherine Scrimgeour
Public Affairs
(416) 535-8395 ext. 201
Email: cscrimgeour@ZENNcars.com
Website: www.ZENNcars.com

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