Coates Announces Key Element of Proposed Joint Effort with China

WALL TOWNSHIP, New Jersey - Coates International, Ltd. (OTC Bulletin Board: COTE) — After reviewing
the proposed agreement with the Chinese, to enter into a joint effort in
China, George J. Coates, President and CEO stated that, “This is a deal that
our company cannot pass up. It opens up great opportunities for Coates
International, Ltd. to market, sell, distribute and license its CSRV Engines
and products throughout China and the Far East which is a vast market. We
plan to move forward on this joint effort expeditiously.”

(Photo: www.newscom.com/cgi-bin/prnh/20090325/NY88576 )

The proposed agreement is constructed in three steps:

1. Coates will supply a prototype CSRV engine for testing and
validation of the technological benefits at the Clean Energy Automotive
Engineering Research Center, in Shanghai, China. Upon completion of testing,
the next phase of the agreement provides for:

2. Setting-up a mass production facility to manufacture the
Coates CSRV Engines and products in China, with Chinese business partners.
The agreement is currently targeting this step for the end of 2009.

3. Marketing of the CSRV products throughout China and other
Asian countries in the Far East. Marketing will be undertaken by Chinese
entities. Licensing to original engine and vehicle manufacturers in the
following categories of engines applications in the territory of China:

– Automobiles
— Light Trucks
— Heavy Trucks
— Industrial Machinery
— Farm Machinery
— Small Electric Power Generators
— Large Electric Power Generators
— Buses
— Vans
— Taxis
— Motorcycles, Scooters, Mopeds
— Small Boats
— Large Ships
— Locomotives
— Light Aircraft
— Water Sport Crafts
— Racing and Performance
— Military Vehicles
— Military Equipment

The CSRV engine will be designed to be powered by standard and
alternative fuels including:

– Gasoline
— Diesel
— Biodiesel
— Compressed Natural Gas (CNG)
— Liquid Natural Gas (LNG)
— Propane
— Landfill Gas (Methane)
— Flare-off Gas (Sour Gas)
— Ethanol
— Methanol
— Hydrogen
— Possible mixtures of some of the above fuels

Management is very enthusiastic about this opportunity in China.
However, it is a complex task to get the agreement completed. An agreement of
this magnitude is inherently complex and it involves extensive details that
need to be addressed. We intend to diligently work with our outside
professionals in properly structuring the arrangements. This process is
further complicated by the dual language requirements and importance of
ensuring mutual understanding and obtaining final agreement by the parties.
We anticipate that the process of finalizing an agreement is likely to occur
over a several week period.

The Company has already begun production of a prototype test
engine, which is a straight four cylinder 1600cc CSRV gasoline engine, with a
compression ratio of 13 to 1, sequential fuel injection and computerized
functional controls. The engine is expected to be completed by the end of
April of 2009.

Additional information about the Company, including photos and
videos are available at our Coates News website, www.mostadvancedengine.com.
Readers may also visit our corporate website at www.coatesengine.com.

About Coates International, Ltd.: Coates has been developing,
over a period of more than 15 years, a patented spherical rotary valve CSRV
Internal Combustion Engine, invented by George J. Coates and his son Gregory.
The CSRV system is adaptable to combustion engines of many types. This
technology is currently adapted to a number of practical applications,
including industrial generators powered by engines incorporating the CSRV
technology and designed to run on flare-off gas from oil wells, landfill gas
and raw natural gas. The Company is actively engaged in preparing for the
commencement of manufacturing of products for this technology.

This press release contains forward-looking statements that are
made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. By their nature, forward-looking statements
and forecasts involve risks and uncertainties because they relate to events
and depend on circumstances that will occur in the near future. There are a
number of factors that could cause actual results and developments to differ
materially from forecasted results. These risks and uncertainties include
market conditions, regulatory approvals, and other risks inherent in our
operations. For a discussion of these risks and uncertainties, please see our
filings with the Securities and Exchange Commission. Our public filings with
the SEC may be viewed and printed on the website maintained by the SEC at
www.sec.gov.

Source: Coates International, Ltd.

Sharon Arena of Coates International, Ltd., +1-732-449-7717, info at coatesengine.com. Photo: https://www.newscom.com/cgi-bin/prnh/20090325/NY88576