EXHIBIT 10.118
                       ELECTROSOURCE, INC.
                      CONSULTING AGREEMENT

                            96-C-079

      THIS CONSULTING AGREEMENT (the "Agreement"), made effective
the  1st  day  of  January, 1996, is between ELECTROSOURCE,  INC.
("Electrosource"), a Delaware corporation, having  its  principal
offices at 3800-B Drossett Drive, Austin, Texas, 78744-1131,  USA
and  JACK J. GUY (Consultant) having his place of business at 702
Winstead Court, Sunnyvale, California 94087.

                      W I T N E S S E T H:

      WHEREAS,  Consultant possesses knowledge and experience  in
battery   technology,   research  and   development,   marketing,
fundraising and business alliances; and

      WHEREAS, Consultant has the knowledge and ability to assist
Electrosource in matters related to the development, testing  and
commercialization of its technology; and

     WHEREAS, Electrosource desires the assistance of Consultant.

      NOW,  THEREFORE, in consideration of the promises  and  the
mutual agreements hereinafter contained, the parties hereto agree
as follows:

     Electrosource and Consultant, intending to be legally bound,
agree as follows:

1.   Term

     1.1    Electrosource  hereby  engages   Consultant   as
     independent contractor for a term commencing on January
     1, 1996 and ending on December 31, 1996.

     1.2   Electrosource  may  cancel  this  Agreement  with
     thirty (30) days prior written notice to Consultant but
     only  in the event of severe budgetary constraints such
     that  it  has  to curtail its activities significantly.
     Electrosource's sole liability will be for hours worked
     at  the  rate specified, and for reasonable  travel  or
     business  expenses incurred in accordance with  Section 4.

     1.3    Notwithstanding  any  other  provision  of  this
     Agreement,   if   Consultant  breaches   any   of   its
     provisions, Electrosource may terminate this  Agreement
     immediately upon written notice to Consultant.

     1.4   Upon  termination of this Agreement in accordance
     with any of its provisions, Electrosource shall have no
     obligation  to make further payments to Consultant  for
     services   performed  after  notice  is   received   by
     Consultant.   Notice  may be hand carried  or  sent  by
     certified  mail.  Notice is effective upon  receipt  or
     within five (5) days of mailing, whichever is earlier.

2.   Duties

     Consultant shall use his best, businesslike, timely  efforts
     on  behalf  of  Electrosource to assist  Electrosource  with
     respect  to  strategic relationships, partnering, marketing,
     fundraising,   research  and  development   agreements   and
     business alliances pertaining to battery technology, battery
     research  and  development and related matters.   Consultant
     shall  report  to  and be directed by the Chairman  and  CEO
     and/or   Vice  President  for  Marketing  of  Electrosource.
     Consultant shall be reasonably available on an on-call,  as-
     needed  basis to perform such advising and consulting duties
     as may be assigned from time to time by Electrosource to the
     extent  specified  in  Section  3  below.   Such  consulting
     services  shall  be  provided  either  at  the  offices   of
     Electrosource or Consultant, or at such other  locations  as
     the parties may agree.

3.   Compensation

     As  full  compensation  for  the services  which  Consultant
     renders to Electrosource under this Agreement, Electrosource
     will  pay to Consultant $6,000 per month, beginning  January
     1996, for approximately one week or 20% of Consultant's time
     each month.  If Electrosource requests more than one week of
     time  in  a particular month, such additional time  will  be
     paid  for  at  the  rate  of  $4,000  per  week.   Any  such
     additional time shall be approved in writing, in advance  by
     the  Chairman  and CEO of Electrosource.  Upon execution  of
     this  Agreement, Electrosource shall also pay to  Consultant
     $2,500  for  past  expenses and as  an  advance  for  future
     expenses  (to  be  supported by an itemized accounting  with
     receipts  from  Consultant)  and  a  $6,000  signing  bonus.
     Consultant  shall  submit invoices monthly to  Electrosource
     for services rendered, invoices shall include the heading "a
     professional consulting firm (or individual)."

4.   Expenses

     Electrosource shall reimburse Consultant for travel expenses
     incurred by him pursuant to Consultant's consulting  duties.
     Such  expenses may include necessary actual expenses of out-
     of-town  travel costs, communications, hotel accommodations,
     meals  and  the  like  provided that Consultant  shall  keep
     receipts  and provide Electrosource an accurate and complete
     accounting  of  all  such expenses so  incurred,  and  shall
     obtain  Electrosource's prior written consent  to  any  such
     travel.   Reimbursement of expenses in excess of the  $2,500
     payment  to  be  made under Section 3 above will  be  issued
     within   twenty  (20)  days  of  receipt  of  the   complete
     accounting, with receipts.

5.   Confidential and Proprietary Information

     5.1   The  parties agree that from time to time  during
     performance   of   this   Agreement   confidential   or
     proprietary  technical or business information  may  be
     provided   either   orally  or  in  written   form   to
     Consultant.   Such  information  will  be  specifically
     designated  by  Electrosource as "confidential"  and/or
     "proprietary."  Consultant shall keep confidential  all
     such  designated information furnished by Electrosource
     and  safeguard  same  from disclosure  or  use  by  any
     unauthorized individuals for any purpose other than  in
     performance of this Agreement.

     5.2   In  event of termination or cancellation of  this
     Agreement for any reason whatsoever, Consultant  agrees
     promptly  to  deliver  to  Electrosource  all   written
     information of any sort made available to Consultant or
     created by it under the terms of this Agreement.

     5.3   Work  product created by Consultant shall  become
     the confidential proprietary property of Electrosource.
     Consultant  agrees to treat such work  product  in  the
     same manner as confidential proprietary information  of
     Electrosource.  Consultant agrees that  any  remedy  at
     law   would  be  inadequate  or  a  violation  of  this
     provision;   consequently,   Consultant   agrees   that
     Electrosource  is  entitled  to  obtain  an  injunction
     against  Consultant's disclosure  of  any  confidential
     proprietary information.

     5.4   Neither  expiration  of this  Agreement  nor  its
     earlier   termination  for  any  reason  shall  release
     Consultant from its obligations under this Section 5.

6.   Works of Authorship and Inventions

     6.1   Consultant  shall  convey  to  Electrosource  all
     rights  to  each  work of authorship,  whether  or  not
     patentable, which is conceived, developed, written,  or
     reduced  to  practice by Consultant in  performing  the
     requirements of this Agreement.  Consultant  agrees  to
     execute    all    necessary   patent   and    copyright
     applications,  assignments  and  other  instruments  at
     Electrosource's  expense and to  give  all  lawful  and
     proper testimony in aid of Electrosource obtaining  and
     maintaining  in  its  name  full  and  complete  patent
     protection on any such invention.  Before final payment
     is  made under this Agreement, Consultant shall furnish
     Electrosource complete information with respect to  any
     invention and all work product subject to this Section.

     6.2    Consultant  hereby  irrevocably  appoints   each
     officer  and director of Electrosource as his attorney-
     in-fact  for  purposes of filing  any  applications  or
     assignments  necessary  to properly  reflect  the  sole
     ownership by Electrosource of any invention or work  of
     authorship subject to this Section.

7.   Assignment and Subcontracting

     Neither this Agreement nor its performance, either in  whole
     or in part, shall be assigned or subcontracted by Consultant
     to  a  third party without, in each case, the prior  written
     consent of Electrosource.

8.   No Conflicts

     8.1  Consultant represents and warrants that:

          (a)  He has full authority to enter into this
               Agreement   and   to   perform   his   obligations
               hereunder; and

          (b)  Performance  by  Consultant  of   his
               obligations hereunder will not be in conflict with
               any other of his obligations.

     8.2  Notwithstanding  any  other  provision  of  this
          Agreement,  Electrosource  shall  have  the  right   to
          suspend  this  Agreement  subject  to  arbitration   in
          accordance  with the rules of the American  Arbitration
          Association  if,  in Electrosource's  sole  opinion,  a
          conflict  of  interest  arises  or  may  arise  between
          Consultant's  representation of Electrosource  and  its
          representation of its other clients.

9.   Independent Contractor

     Consultant's relationship to Electrosource shall  be  solely
     to  provide  personal services on an independent  contractor
     basis.   In this capacity, Consultant will not be a  regular
     employee  of  Electrosource and  will  not  be  entitled  to
     worker's  compensation coverage, unemployment insurance,  or
     any  other  type  or form of insurance or  benefit  normally
     provided  by Electrosource for its employees.  Electrosource
     will  not  be responsible for withholding federal income  or
     social security taxes from the fees paid to Consultant.  The
     Consultant  will  be solely responsible  for  reporting  and
     paying  all Federal, State and Local taxes arising from  his
     performance of this Agreement.  The consultant is  generally
     free  to  perform  the  services  hereunder  in  any  manner
     desired,  subject to satisfactory completion of the  subject
     task.

10.  Notice

     A  notice communicated to Electrosource shall be sent to the
     Chairman  and  CEO,  Electrosource,  Inc.,  3800-B  Drossett
     Drive,  Austin, Texas 78744-1131, or to such other place  or
     places  as Electrosource by notice in writing shall specify.
     Any  notice to be served shall be deemed to be served if the
     same  be  sent by registered or certified mail  through  the
     United  States mail, addressed to the party on which service
     is  to  be effected at the address stated in the immediately
     preceding  sentences  and  shall  be  deemed  to  have  been
     received on the day indicated on the return receipt relating
     thereto.

11.  Binding Agreement

     This  Agreement  shall  be binding upon  and  inure  to  the
     benefit  of the successors and assigns of Electrosource  and
     to the successors and assigns of Consultant.

12.  Modification

     This   Agreement   supersedes  all   prior   agreements   or
     understandings between Consultant and Electrosource relating
     to  the subject matter hereof, and no change, termination or
     attempted  waiver of any of the provisions hereof  shall  be
     binding  unless  reduced  to  writing  and  signed  by  duly
     authorized officers of Electrosource and by Consultant.

13.  Construction

     This  Agreement  shall be construed in accordance  with  the
     laws  of  the State of Texas.  Consultant hereby submits  to
     the  continuing jurisdiction of the laws and the  courts  of
     the  State of Texas in the prosecution of any interpretation
     or  dispute under or arising out of this Agreement.   Should
     any  portion  of this Agreement be adjudged or  held  to  be
     invalid, unenforceable or void, such judgment shall not have
     the  effect of invalidating or voiding the remainder of this
     Agreement, and the parties hereto agree that the portion  to
     be held invalid, unenforceable or void shall, if possible be
     deemed  amended  or  reduced in scope  or  to  otherwise  be
     stricken from this Agreement to the extent required for  the
     purposes of validity and enforcement thereof.

     IN WITNESS WHEREOF, this Agreement is dated and is effective
the date and year first above written.

ELECTROSOURCE, INC.                CONSULTANT

By:     /S/                        By:    /S/
  James M. Rosel                     Jack J. Guy
  Vice President, General Counsel

Date: January 9, 1996              Date:  January 9, 1996

                                   SOCIAL SECURITY NUMBER OR
                                   FEDERAL IDENTIFICATION NUMBER:
                                         ###-##-####