Clean Diesel Technologies Announces Financial Results for the ThirdQuarter of 2008

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Stamford, CT - November 11, 2008 - Clean Diesel Technologies, Inc.
(NASDAQ:CDTI; XETRA:CDIA; AIM:CDT), the cleantech emissions reduction
company, today announced financial results for the third quarter and
nine months ended September 30, 2008.
 
Recent Developments:
 
  * Revenue for the third quarter was $1.6 million compared to $2.5
    million in the third quarter of 2007, with the decline mainly
    attributable to large upfront licensing fees in the third quarter
    of 2007
  * Revenue totaled $6.8 million for the nine months ended September
    30, 2008 compared to $3.9 million for the nine months ended
    September 30, 2007
  * Clean Diesel, EnBW Regional AG and H. Daugbjerg SA unveiled a
    diesel retrofit emissions control system at the IAA Commercial
    Vehicles 2008 trade show in Hannover, Germany in September
  * Michael Asmussen hired as Vice President of Sales, Americas, to
    lead domestic sales efforts
 
Dr. Bernhard Steiner, President and CEO of Clean Diesel Technologies,
commented, "Clean Diesel has not been immune to the external macro
events resulting in a global economic slowdown and the subsequent
downturn in the automotive industry. Revenue for the quarter was $1.6
million compared with $2.5 million in the third quarter of last year,
although it should be noted that last year's third quarter included
significant upfront licensing fees which comprised much of our
revenue for that period. Revenue also declined, as we expected, upon
completion of the second of four compliance deadlines of the London
Low Emission Zone (LEZ) in July 2008."
 
"Now with more than 300 patents and patents pending, the value of and
demand for our portfolio of emission reduction technologies remains
strong," continued Dr. Steiner. "Even though global events are
driving an economic downturn, powerful forces are driving the demand
for energy efficient solutions, and we see no signs of regulatory
clean air mandates abating in the U.S. or abroad. This situation
actually increases the competitive position and overall value of our
unique technology portfolio. We believe the need for energy efficient
emissions solutions is resulting in a new industry standard, embraced
by engine manufacturers, for the combined use of Exhaust Gas
Recirculation (EGR) and Selective Catalytic Reduction (SCR). Clean
Diesel holds exclusive patents on the combined use of these
technologies."
 
Dr. Steiner concluded, "Highlights in the third quarter include
signing an important new license agreement with one of the leading
companies in the industry. The brand awareness, know-how and value
generated from participating in the London LEZ continues to create
new opportunities, including participation with EnBW Regional AG, one
of the largest German power network operators, and H. Daugbjerg SA, a
Danish filter specialist, for a diesel retrofit emissions control
system for the German market based on Clean Diesel's PurifierTM e4
technology. Our European LEZ experience is directly applicable in the
Americas as we progress with verification by the California Air
Resources Board for the Purifier e4 and participate in the California
Off-Road Showcase and Supplemental Environmental Programs in Los
Angeles and Oakland. These activities and developments underscore our
global focus and market leadership."
 
Third Quarter 2008 Financial Results
 
Total revenue for the third quarter of 2008 was $1.6 million compared
to $2.5 million in the third quarter of 2007. The decrease in the
third quarter was primarily due to significant up-front license fees
recognized in the prior year third quarter. Net loss for the third
quarter of 2008 was $2.4 million or $0.29 per share compared to the
Company's only profitable quarter to date with a net profit of
$651,000 or $0.09 per share in the comparable period in 2007. Net
loss for the quarter included $262,000 of non-cash stock-based
compensation charges, compared to $91,000 in non-cash stock-based
compensation charges in the three months ended September 30, 2007.
 
Total revenue for the nine months ended September 30, 2008 was $6.8
million, an increase of 74%, compared to $3.9 million for the same
period in 2007. Net loss for the nine months ended September 30, 2008
was $6.1 million or $0.75 per share compared to $1.7 million or $0.25
per share in the comparable period in 2007. Net loss for the nine
months ended September 30, 2008 included $1.0 million of non-cash
stock-based compensation charges compared to $733,000 of non-cash
stock-based compensation charges in the nine months ended September
30, 2007. The company also recorded an unrealized loss of $750,000
for the nine months ended September 30, 2008 that reduced the value
of its investments in auction rate securities (ARS) with a
corresponding reduction in stockholders' equity.
 
The Company disclosed that in October 2008, it received an offer from
UBS AG for a put right permitting the Company to sell to UBS at par
value the $11.7 million investment in ARS, previously purchased from
UBS, at a future date (any time during a two-year period beginning
June 30, 2010). The Offer also includes a commitment to loan the
Company 75% of the UBS-determined value of the ARS at any time until
the put is exercised. The Company accepted the UBS Offer on November
6, 2008.
 
Additional information about the Company's financial results is
available on its Form 10-Q filed with the Securities & Exchange
Commission: http://www.sec.gov.
 
About Clean Diesel Technologies
Clean Diesel Technologies (NASDAQ: CDTI) is a cleantech company
providing sustainable solutions to reduce emissions, increase energy
efficiency and lower the carbon intensity of on- and off-road engine
applications. Clean Diesel's patented technologies and products allow
manufacturers and operators to comply with increasingly strict
regulatory emissions and air quality standards, while also improving
fuel economy and power. The Company's solutions, which are in
commercial use worldwide, significantly reduce emissions formed by
the combustion of fossil fuels and biofuels, including particulate
matter (PM), nitrogen oxides (NOx), carbon monoxide and hydrocarbons.
Clean Diesel solutions also reduce carbon dioxide (CO2) emissions, a
key greenhouse gas associated with global climate change.
 
Clean Diesel develops and manages intellectual property from original
concept to full-scale commercial deployment. Its offerings include
ARIS® Selective Catalytic Reduction (SCR); the patented combination
of SCR and Exhaust Gas Recirculation; hydrocarbon injection for
emissions control applications; Platinum Plus® Fuel-Borne Catalyst
(FBC); the Purifier(TM) family of particulate filter systems; and its
Wire Mesh Filter particulate filter technologies. The Company was
founded in 1995 and is headquartered in Stamford, Connecticut. A
wholly owned subsidiary, Clean Diesel International, LLC, is based in
London, England. For more information, please visit www.cdti.com.
 
Certain statements in this news release constitute "forward-looking
statements" within the meaning of the Private Securities Litigation
Reform Act of 1995. Such forward-looking statements involve known or
unknown risks, including those detailed in the Company's filings with
the U.S. Securities and Exchange Commission, uncertainties and other
factors which may cause the actual results, performance or
achievements of the Company, or industry results, to be materially
different from any future results, performance or achievements
expressed or implied by such forward-looking statements. Readers are
cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date hereof.
 
       Please visit us on the World Wide Web at: www.cdti.com
 
Contacts:
 
Crescendo Communications, LLC        Clean Diesel Technologies, Inc.
(U.S. investor contact)              Ann Ruple
David K. Waldman or Klea Theoharis   CFO
+1 212 671 1020                      +1 203 327 7050
cdti@crescendo-ir.com                aruple@cdti.com
 
Innovator Capital Limited            Charles Stanley Securities
(Financial press inquiries)          Nominated Adviser
Shaun Brown or Jade Summer           Philip Davies / Freddy Crossley
+44 20 7297 6840                     Tel: +44 20 7149 6457
jade.summer@innovator-capital.com.
 
Matter Communications
(Technical press inquiries)
Jacqueline Volovich
+1 415-984-6281
jackie@matternow.com
 
To read the complete press release including tables please click the
following link:
 
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Clean Diesel Technologies, Inc.
300 Atlantic Street, Suite 702 
Stamford, CT  USA
 
WKN: 898074; ISIN: US18449C1045; 
Listed: Xetra Stars in Frankfurter 
Wertpapierbörse;