EXHIBIT 10.34
                 5% CONVERTIBLE PROMISSORY NOTE
                                
     THIS  NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES
     ACT  OF  1933,  AS AMENDED (THE "ACT"),  OR  UNDER  THE
     SECURITIES LAWS OF ANY STATE ("BLUE SKY LAWS"), AND MAY
     NOT  BE  SOLD  OR  TRANSFERRED IN  THE  ABSENCE  OF  AN
     EFFECTIVE  REGISTRATION  STATEMENT  UNDER  THE  ACT  OR
     DELIVERY TO THE COMPANY OF EVIDENCE SATISFACTORY TO THE
     COMPANY   TO   THE   EFFECT  THAT  AN  EXEMPTION   FROM
     REGISTRATION THEREUNDER IS AVAILABLE.

Dated October 26, 1995                               $190,000.00

       FOR   VALUE  RECEIVED,  Electrosource,  Inc.,  a  Delaware
corporation (the "Company"), hereby promises to pay to the  order
Mitsui   Engineering  and  Shipbuilding  Co.,  Ltd.,  a  Japanese
corporation  ("Mitsui" or the "original holder"),  the  principal
sum   of   One   Hundred  Ninety  Thousand  Dollars  and   NO/100
(U.S.$190,000.00) together with interest thereon calculated  from
the  date  hereof,  in  accordance with the  provisions  of  this
October 1995 Note.

      This  Note  is  the  5%  Convertible Promissory  Note  (the
"October  1995 Note") issued for payment of interest due pursuant
to  the  5%  Convertible  Promissory Note (the  "Original  Note")
issued  pursuant to a Note Purchase Agreement dated as of October
26, 1994, between the Company and the original holder hereof (the
"Purchase  Agreement").   The Purchase Agreement  contains  terms
governing  the  rights  and obligations of  the  holder  of  this
October  1995 Note, and all provisions of the Purchase  Agreement
are incorporated herein by reference.  Unless otherwise indicated
herein, capitalized terms used in this October 1995 Note  and  in
the  Original  Note have the same meaning as  set  forth  in  the
Purchase Agreement.

Part 1.   Payment of Interest.

     1.A. Rate of Interest.  Interest shall accrue at the rate of
five  percent  (5%) per annum on the unpaid principal  amount  of
this  October 1995 Note outstanding from time to time.   Interest
shall  be paid in additional Notes having terms identical to  the
Original Note except in respect of principal amount, dated as  of
the  Payment Date (as defined below) with respect to  which  such
interest  is payable and having a principal amount equal  to  the
amount of interest accrued and unpaid as of that Payment Date.

      1.B.  Payment  Dates.   On April  26,  1996,  and  on  each
subsequent October 26 and April 26 (each of which dates shall  be
a  "Payment Date"), all unpaid interest that has accrued  on  the
unpaid principal amount of this October 1995 Note on and prior to
such  Payment  Date or on any over due interest on  this  October
1995 Note shall become due and payable.

      1.C.  Payment  upon  Maturity or Prepayment.   All  accrued
interest that has not theretofore been paid shall be paid in full
in  cash  on  the  date  on  which the  entire  principal  amount
outstanding  under this October 1995 Note is paid,  whether  upon
maturity  as  provided  in paragraph 2.A or  upon  prepayment  as
provided in paragraphs 2.B or 2.C.  In the event that any portion
less than the entire outstanding principal amount of this October
1995  Note  is  prepaid pursuant to paragraph  2.B,  the  accrued
interest applicable to such portion prepaid shall be paid  as  of
the effective date of such partial prepayment.

     1.D. Saving Clause.  All agreements and transactions between
the Company and the holder of this October 1995 Note, whether now
existing or hereafter arising, whether contained herein or in any
other  instrument,  and  whether  written  or  oral,  are  hereby
expressly  limited so that in no contingency or event whatsoever,
whether  by  reason  of  acceleration  of  the  maturity  hereof,
prepayment, demand for prepayment or otherwise, shall the  amount
contracted for, charged or received by the holder of this October
1995  Note from the Company for the use, forbearance or detention
of  the  principal indebtedness or interest hereof, which remains
unpaid  from  time to time, exceed the maximum amount permissible
under applicable law, it particularly being the intention of  the
parties  hereto  to  conform strictly to the  applicable  law  of
usury.   Any  interest  payable  hereunder  or  under  any  other
instrument relating to the indebtedness evidenced hereby that  is
in   excess  of  the  legal  maximum,  shall,  in  the  event  of
acceleration  of maturity, prepayment, demand for  prepayment  or
otherwise, be automatically, as of the date of such acceleration,
prepayment,  demand or otherwise, applied to a reduction  of  the
principal indebtedness hereof and not to the payment of interest,
or  if such excessive interest exceeds the unpaid balance of such
principal, such excess shall be refunded to the Company.  To  the
extent  not prohibited by law, determination of the legal maximum
rate  of  interest  shall  at all times be  made  by  amortizing,
prorating,  allocating and spreading in equal  parts  during  the
periods of the full stated term of the indebtedness, all interest
at  any time contracted for, charged or received from the Company
in  connection with the indebtedness, so that the actual rate  of
interest  on  account of such indebtedness is uniform  throughout
the term hereof.

Part 2.   Payment of Principal

      2.A.  Payment  upon Maturity.  The entire unpaid  principal
amount hereof shall be due and payable on October 26, 2004.

     2.B. Prepayment.

      (i)  The Company may prepay all or any part of this October
1995  Note  at  any  time  on  or after  October  26,  1999  (the
"Prepayment Date"); provided that, the aggregate market price  of
the  shares  of the Company's Common Stock, par value  $0.10  per
share ("Common Stock") into which this October 1995 Note is  then
convertible  equals or exceeds for the thirty (30)  trading  days
preceding  the  date of notice of prepayment one  hundred  twenty
percent (120%) of the principal amount of this October 1995 Note.
The  Company  shall  give not less than thirty  (30)  days  prior
written  of  its  intention to prepay  this  October  1995  Note.
Notwithstanding  the  provisions of part 8 hereof,  this  October
1995  Note  may  not be converted into Common  Stock  during  the
period  of  ten (10) days prior to the date it is to be  prepaid.
The market price of the Common Stock for purposes of this section
2.B  shall  be  the average of the closing market price  of  such
Common Stock as reported on NASDAQ.

     (ii) Notwithstanding the provisions of part 8 hereof, in the
event  that  pursuant to part 5.D(ii) of the  Purchase  Agreement
Mitsui  gives notice of an intention to tender this October  1995
Note  or  any other Notes in payment of license fees at  a  price
determined pursuant to part 5.D(iii)(B) of the Purchase Agreement
or  to  tender  shares of Common Stock issued upon conversion  of
Notes  in  payment  of  license fees (in each  case,  other  than
license fees payable pursuant to paragraph 2.1(b) or (c)  of  the
Distribution  Agreement dated July 7, 1994, between  the  Company
and  Mitsui),  Mitsui shall not have the right  to  convert  this
October  1995 Note into shares of Common Stock during the  period
beginning  on the date of the notice of such tender and extending
for  sixty  (60)  days immediately following  the  date  of  such
tender.  The Company may, during such period, prepay all  or  any
portion  of  the  Notes  (other than that portion  of  the  Notes
tendered  in  payment of license fees pursuant to the  notice  of
tender  giving  rise  to such right) at  a  price  equal  to  the
aggregate  principal amount of Notes to be prepaid, plus  accrued
and  unpaid interest thereon; provided that, the aggregate market
price of the shares of the Common Stock into which the Notes  are
then  convertible equals or exceeds for the thirty  (30)  trading
days  preceding  the  date of notice of  prepayment  one  hundred
twenty percent (120%) of the principal amount of such Notes.

      (iii)      This  October 1995 Note may be  prepaid  at  the
option  of the Company only in accordance with the terms of  this
section 2.B.

Part 3.   Registration of Transfer.

      The  Company shall keep at its principal office a  register
for  the registration of Notes, which shall contain the name  and
address  of  the  registered holder (herein referred  to  as  the
holder)  of the Note and the principal and interest of the  Note.
No  transfer  of the Note or any right to receive payments  under
the  Note  shall  be  permitted unless made  upon  the  Company's
register.  Upon the surrender of any Note or Notes at such place,
the  Company  shall, at the request of the holder of  such  Note,
execute  and  deliver (at the Company's expense) a  new  Note  or
Notes  in  exchange therefore representing in the  aggregate  the
principal amount represented by the surrendered Note.  Each  such
new  Note  shall  be registered in such name and shall  represent
such  principal amount of Note as is requested by the  holder  of
the surrendered Note and shall be substantially identical in form
to  the  surrendered Note, and interest shall accrue on such  new
Note  from the date to which interest has been fully paid on such
Note  represented by the surrendered Note; provided that, if  any
Note is to be registered in the name of a person or persons other
than  the holder of the Note, there has been compliance with  all
laws  applicable  to such change of registered holder,  including
but not limited to federal and state securities laws.

Part 4.   Replacement.

      Upon  receipt  of evidence reasonably satisfactory  to  the
Company  of  the  ownership and the loss, theft,  destruction  or
mutilation  of any Note, and in the case of any such loss,  theft
or destruction, upon receipt of indemnity reasonably satisfactory
to  the  Company,  or,  in the case of any such  mutilation  upon
surrender  of  such  Note, the Company  shall  (at  its  expense)
execute and deliver in lieu of such Note, a new Note of like kind
representing  the  principal amount of Note represented  by  such
lost.  stolen, destroyed or mutilated Note and dated the date  of
such  lost,  stolen,  destroyed or mutilated Note,  and  interest
shall  accrue on the Note represented by such new Note  from  the
date  to which interest has been fully paid on such lost, stolen,
destroyed or mutilated Note.

Part 5.   Cancellation.

     After all principal and accrued interest at any time owed on
this  October 1995 Note has been paid in full, this October  1995
Note  shall  be  surrendered to the Company for cancellation  and
shall not be reissued.

Part 6.   Waiver of Notice, etc.

      The  Company  hereby  waives presentment,  demand,  notice,
protest  and all other demands and notice in connection with  the
delivery, acceptance, performance and enforcement of this October
1995  Note,  and assents to extension of the time of  payment  or
forbearance or other indulgence without notice.

Part 7.   Events of Default.

      7.A.  Events  of  Default.  Each  of  the  following  shall
constitute an Event of Default:

      (i)   the Company fails to pay when due the full amount  of
any  principal or interest on this October 1995 Note  whether  at
maturity or by acceleration or otherwise; or

      (ii)  the  Company makes an assignment for the  benefit  of
creditors  or  admits in writing its inability to pay  its  debts
generally as they become due; or an order, judgment or decree  is
entered  adjudicating the Company bankrupt or insolvent;  or  the
Company  petitions or applies to any tribunal for the appointment
of  a  trustee, receiver or liquidator of the Company or  of  any
substantial  part of the assets of the Company, or commences  any
proceeding  under  any  bankruptcy, reorganization,  arrangement,
insolvency, readjustment of debt, dissolution or liquidation  law
of  any  jurisdiction;  or any such petition  or  application  is
filed,  or  any such proceeding is commenced against the  Company
and  either  (X)  the  Company takes any  action  indicating  its
approval thereof, consent thereto, or acquiescence therein or (Y)
such  petition, application or proceeding is not dismissed within
ninety (90) days.

      7.B. Remedies.  Upon the occurrence and continuance of  any
Event  or  Events  of default, the holders of a majority  of  the
combined  aggregate  principal  amount  outstanding  under   this
October  1995  Note  and any Notes issued in payment  of  accrued
interest on Notes may, by written notice to the Company,  declare
all  or any part of the unpaid principal amount of the Notes then
outstanding  to be forthwith due and payable, and thereupon  such
unpaid  principal amount or part thereof, together with  interest
accrued   thereon,  shall  become  so  due  and  payable  without
presentation,   presentment,  protest,  notice   of   intent   to
accelerate, notice of acceleration, or further demand  or  notice
of  any kind, all of which are hereby expressly waived, and  such
holder  or holders may proceed to enforce payment of such  amount
or  part  thereof in such manner as it or they  may  elect.   The
Company  hereby waives to the extent not prohibited by applicable
law  which cannot itself be waived (i) all presentments,  demands
for  performance, notices of nonperformance (except to the extent
required  by  the  provisions hereof), (ii)  any  requirement  of
diligence or promptness on the part of any holder of Notes in the
enforcement  of its rights under the provisions of  this  October
1995  Note,  and  (iii) any and all notices  of  every  kind  and
description which may be required to be given by any  statute  or
rule of law.

Part 8.   Conversion.

     8.A. Conversion Procedure.

     (i)  The holder of this October 1995 Note may convert all or
any  portion  of  the outstanding principal amount  hereof  (plus
accrued  but unpaid interest on such principal amount or  portion
thereof)  held  by  such holder into a number of  shares  of  the
Company's Common Stock computed by dividing the principal  amount
of  this  October  1995 Note (plus accrued  but  unpaid  interest
thereon)  to  be converted by the "Conversion Price" (as  defined
below) then in effect.

     (ii) Each conversion will be deemed to have been effected as
of  the  close  of business on the date on which  the  instrument
representing this October 1995 Note has been surrendered  at  the
principal office of the Company.  At such time as such conversion
has  been effected, the rights of the holder of this October 1995
Note as such holder will cease and the person or persons in whose
name  or  names  any certificate or certificates  for  shares  of
Common Stock are to be issued upon such conversion will be deemed
to  have become the holder or holders of record of the shares  of
Common Stock represented thereby.

      (iii)      As soon as possible after a conversion has  been
effected (but in any event within three business days in the case
of  subparagraph  (a)  below), the Company will  deliver  to  the
converting holder:

          (a)     a certificate representing the number of shares
       of  Common Stock issuable by reason of such conversion  in
       such  name or names and such denomination or denominations
       as  the converting holder has specified (provided that, in
       the  event  that  the  name specified  by  the  converting
       holder  is  other than that of the converting holder,  the
       Company  has  received  evidence satisfactory  to  Company
       counsel  that  the  transfer  of  Common  Stock  from  the
       converting   holder  to  the  person  specified   may   be
       accomplished without violation of applicable law);

          (b)     a  replacement Note having terms  identical  to
       those  of  this October 1995 Note other than the principal
       amount,  which shall be equal to portion of the  principal
       amount of the original Note not converted; and

          (c)     the  amount  payable  under  subparagraph  (vi)
       below  with  respect to fractional shares of Common  Stock
       otherwise issuable upon such conversion.

     (iv) The issuance of certificates for shares of Common Stock
upon  conversion of this October 1995 Note will be  made  without
charge to the holder of such Note for any issuance tax in respect
thereof or other cost incurred by the Company in connection  with
such  conversion  and the related issuance of  shares  of  Common
Stock.   Upon  conversion of this October 1995 Note, the  Company
will  take  all such actions as are necessary in order to  insure
that  the  Common Stock issuable with respect to such  conversion
will be validly issued, fully paid and nonassessable.

      (v)   The  Company  will not close its  books  against  the
transfer  of this October 1995 Note or of Common Stock issued  or
issuable upon conversion of this October 1995 Note in any  manner
which interferes with the timely conversion of this October  1995
Note.

      (vi)  If any fractional interest in a share of Common Stock
would,  except for the provisions of this subparagraph  (vi),  be
deliverable  upon any conversion of this October 1995  Note,  the
Company,  in  lieu of delivering the fractional share  therefore,
may at its option pay a cash adjustment for such fractional share
equal  to such fraction times the fair market value per share  of
the  Common  Stock  at  the  close of business  on  the  date  of
conversion, as determined in good faith by the board of directors
of the Company.

      (vii)     In the event that pursuant to part 5.D(ii) of the
Purchase Agreement Mitsui gives notice of an intention to  tender
this  October 1995 Note or any other Notes in payment of  license
fees  at a price determined pursuant to part 5.D(iii)(B)  of  the
Purchase  Agreement  or to tender shares of Common  Stock  issued
upon  conversion  of Notes in payment of license  fees  (in  each
case,  other  than  license fees payable  pursuant  to  paragraph
2.1(b)  or (c) of the Distribution Agreement dated July 7,  1994,
between  the Company and Mitsui), the Company may, by  notice  to
Mitsui, require that Mitsui surrender for conversion into  Common
Stock  all then outstanding Notes other than those Notes actually
tendered  in  payment of license fees pursuant to the  notice  of
tender giving rise to such right on the part of the Company.  Any
such  conversion shall be effective as of the date of the  notice
given by Mitsui of its intention to tender.

      (viii)    The provisions of this part 8 shall be subject to
the limitations imposed by section 2.B hereof.

     8.B. Conversion Price.  The initial Conversion Price will be
U.S.$3.80.  In order to prevent dilution of the conversion rights
granted  under this part 8, the Conversion Price will be  subject
to adjustment from time to time pursuant to this part 8; provided
that the Conversion Price will in no event be less than $.0001.

      8.C.  Subdivision or Combination of Common Stock..  If  the
Company  at  any  time  subdivides (by  any  stock  split,  stock
dividend,  recapitalization or otherwise) its outstanding  shares
of  Common  Stock into a greater number of shares, the Conversion
Price  in  effect immediately prior to such subdivision  will  be
proportionately reduced, and if the Company at any time  combines
(by  reverse stock split or otherwise) its outstanding shares  of
Common  Stock  into  a smaller number of shares,  the  Conversion
Price  in  effect immediately prior to such combination  will  be
proportionately increased.

     8.D. Reorganization, Reclassification, Consolidation, Merger
or  Sale.   Any  reorganization, reclassification, consolidation,
merger  or  sale  of all or substantially all  of  the  Company's
assets  to  another Person which is effected in such a  way  that
holders  of Common Stock are entitled to receive (either directly
or  upon  subsequent liquidation), stock, securities  or  amounts
with  respect to or in exchange for Common Stock is  referred  to
herein as an "Organic Change."  Prior to the consummation of  any
Organic Change, the Company will make appropriate provisions  (in
form  and substance satisfactory to the holders of a majority  of
the  outstanding  principal amount of Notes then outstanding)  to
insure that each of the holders of Notes will thereafter (for  so
long  as  such  holders have the right to convert  the  Notes  as
provided in this part 8) have the right to receive, in lieu of or
in addition to the shares of Common Stock immediately theretofore
issuable upon the conversion of such holder's Notes, such  shares
of stock, securities or assets as such holder would have received
in  connection  with  such  Organic Change  if  such  holder  had
converted his Notes immediately prior to such Organic Change.  In
any  such case, the Company will make appropriate provisions  (in
form  and substance satisfactory to the holders of a majority  of
the  outstanding  principal amount of Notes then outstanding)  to
insure that the provisions of this part 8 will thereafter (for so
long  as  such  holders have the right to convert  the  Notes  as
provided in this part 8) be applicable to the Notes.

      8.E.  Certain  Events.  If any event  occurs  of  the  type
contemplated  by the provisions of this part 8 but not  expressly
provided  for  by  such provisions, then the Company's  Board  of
Directors  will make an appropriate adjustment in the  Conversion
Price  so as to protect the rights of the holder of this  October
1995  Note;  provided that no such adjustment will  increase  the
Conversion Price as otherwise determined pursuant to this part  8
or  decrease  the number of shares of Common Stock issuable  upon
conversion of this October 1995 Note.

     8.F. Notices.  Until the maturity of this October 1995 Note:

      (i)   Immediately  upon any adjustment  of  the  Conversion
Price, the Company will give written notice thereof to the holder
of this October 1995 Note.

      (ii) The Company will give written notice to the holder  of
this  October  1995 Note at least twenty (20) days prior  to  the
date on which the Company closes its books or takes a record  (a)
with  respect to any dividend or distribution upon Common  Stock,
(b) with respect to any pro rata subscription offer to Holders of
Common  Stock or (c) for determining rights to vote with  respect
to any Organic Change, dissolution or liquidation.

      (iii)     The Company will also give written notice to  the
holder of this October 1995 Note at least thirty (30) days  prior
to the date on which any Organic Change will take place.

Part 9.   Amendment and Waiver.

      No  amendment, modification or waiver shall be  binding  or
effective with respect to any provision of this October 1995 Note
without  the  prior written consent of the holders  of  at  least
sixty-seven  percent  (67%) of the combined  aggregate  principal
amount  of this October 1995 Note and any additional Notes issued
in payment of accrued interest then outstanding.

Part 10.  Notices.

     Except as otherwise expressly provided, all notices referred
to  herein will be in writing and will be delivered by registered
or  certified mail, return receipt requested, postage prepaid and
will  be  deemed  to have been given when so mailed  (i)  to  the
Company,  at  its  principal executive offices and  (ii)  to  any
holder of this October 1995 Note, at such holder's address as  it
appears in the Note register maintained pursuant to part 3 hereof
(unless otherwise indicated by any such holder).

      IN  WITNESS WHEREOF, the Company has executed and delivered
this October 1995 Note as of October 26, 1995.

ELECTROSOURCE, INC.



By:      /S/
  James M. Rosel
  Vice President
  General Counsel