WARRANT


THE  SECURITIES  REPRESENTED  BY OR  UNDERLYING  THIS  INSTRUMENT  HAVE NOT BEEN
REGISTERED  UNDER THE  SECURITIES  ACT OF 1933, AS AMENDED,  OR QUALIFIED  UNDER
APPLICABLE  STATE  SECURITIES  LAWS AND HAVE BEEN TAKEN FOR INVESTMENT  PURPOSES
ONLY  AND NOT  WITH A VIEW TO OR FOR SALE IN  CONNECTION  WITH ANY  DISTRIBUTION
THEREOF. THE SECURITIES MAY NOT BE SOLD OR OTHERWISE  TRANSFERRED IN THE ABSENCE
OF SUCH  REGISTRATION  AND  QUALIFICATION  WITHOUT AN OPINION OF COUNSEL FOR THE
HOLDER,  CONCURRED  IN BY COUNSEL FOR THE  COMPANY  THAT SUCH  REGISTRATION  AND
QUALIFICATION ARE NOT REQUIRED.

THE  SECURITIES  REPRESENTED  BY OR UNDERLYING  THIS  INSTRUMENT  ARE SUBJECT TO
RESTRICTIONS  ON  TRANSFER  PURSUANT  TO  REGULATION  S  PROMULGATED  UNDER  THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD,  TRANSFERRED,  ASSIGNED
OR HYPOTHECATED EXCEPT PURSUANT TO THE PROVISIONS UNDER REGULATION S OR PURSUANT
TO REGISTRATION  UNDER SUCH ACT OR PURSUANT TO AN AVAILABLE  EXEMPTION FROM SUCH
REGISTRATION.

THE WARRANTS AND WARRANT  SHARES HAVE NOT BEEN  REGISTERED  UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"), AND (i) THE WARRANTS AND THE WARRANT SHARES
MAY NOT BE EXERCISED,  OFFERED OR SOLD BY OR ON BEHALF OF U.S. PERSONS, (ii) THE
WARRANTS MAY NOT BE EXERCISED IN THE UNITED STATES AND (iii) THE WARRANT  SHARES
MAY NOT BE  DELIVERED  IN THE UNITED  STATES  UNLESS,  IN EACH CASE,  THERE IS A
REGISTRATION  STATEMENT IN EFFECT  COVERING  THE WARRANTS AND WARRANT  SHARES OR
THERE IS AVAILABLE AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT.

THE  SECURITIES  REPRESENTED  BY OR UNDERLYING  THIS  INSTRUMENT  ARE SUBJECT TO
CERTAIN  RESTRICTIONS  ON TRANSFER  SET FORTH IN THAT  CERTAIN  OCTOBER 25, 1996
SUBSCRIPTION AGREEMENT BETWEEN THE ORIGINAL HOLDER HEREOF AND THE COMPANY.

No. Series C-11
                                                                  500,000 Shares


               CASHLESS EXERCISE WARRANT TO PURCHASE COMMON STOCK

         U.S.  ELECTRICAR,  INC., a California  corporation (the "Corporation"),
hereby grants to FONTAL INTERNATIONAL LTD. (the "Holder"), the right to purchase
from the Corporation five hundred thousand  (500,000) shares of the common stock
of the Corporation (the "Warrant  Shares"),  subject to the terms and conditions
set forth below.  This Warrant is one of a duly authorized series of Warrants of
the  Corporation  (which  Warrants  are  identical  except  for  the  variations
necessary  to express  the name of the Holder and number of  "Warrant  Shares"),
which Warrants together are designated  "Series C Warrants" acquired pursuant to
the terms and conditions set forth in that certain October 25, 1996 Subscription
Agreement (the Subscription Agreement").

         1.  Term.  This  Warrant  may be  exercised  at any time after the date
hereof through October 25, 1997 (the "Exercise Period").


<PAGE>

         2.  Purchase   Price.   The  purchase  price  for  each  share  of  the
Corporation's common stock purchasable  hereunder shall be Thirty Cents ($0.30),
subject to  adjustment  as  provided in Section 8 below (the  "Warrant  Exercise
Price").

         3.  Exercise of Warrant.  This  Warrant may be exercised in whole or in
part (except for a cashless exercise which shall require exercise in full) , but
not for less than one hundred thousand  (100,000) Warrant Shares (or such lesser
number of Warrant  Shares as may at the time of exercise  constitute the maximum
number  exercisable)  and in excess of 100,000  Warrant  Shares in increments of
10,000  Warrant  Shares.  It is  exercisable,  subject  to the  satisfaction  of
applicable  securities  laws,  at any time  during  the  Exercise  Period by the
surrender of the Warrant to the  Corporation  at its principal  office  together
with the Notice of Exercise annexed hereto duly completed and executed on behalf
of the  Holder,  accompanied  by payment in full of the amount of the  aggregate
purchase price of the Warrant Shares in immediately  available funds,  except if
exercised under the cashless  exercise option as provided below. The Corporation
agrees  that  the  Warrant  Shares  so  purchased  shall  be  issued  as soon as
practicable thereafter,  and that the Holder shall be deemed the record owner of
such  Warrant  Shares as of and from the close of  business on the date on which
this Warrant  shall be  surrendered,  together  with payment in full as required
above.  It shall be a condition  to the exercise of this Warrant that the Holder
or any transferee  hereof certify to the  Corporation,  at the time of exercise,
either that he or it is not a U.S.  Person (as defined in Regulation S under the
Securities Act of 1933, as amended (the "Securities  Act") and that this Warrant
is not being exercised on behalf of a U.S.  Person,  or to provide an opinion of
counsel that the Warrant and the Warrant  Shares to be delivered  upon  exercise
thereof have been registered  under the Securities Act or that an exemption from
the registration  requirements of the Securities Act is available. It shall be a
further  condition  to the  exercise of this Warrant that the Warrant may not be
exercised  in the United  States and the Warrant  Shares may not be delivered to
the United States absent  registration  under the Securities Act or an available
exemption from registration.

         4. Cashless Exercise Option.  Notwithstanding the foregoing,  if on the
date of exercise  the "Fair  Market  Value" of one Warrant  Share is equal to or
greater  than twice the  Warrant  Exercise  Price and during  the  preceding  20
trading  days prior to the date of  exercise  under  this  Warrant  the  average
trading  volume  was in  excess  of  100,000  shares  per  day,  then in lieu of
exercising this Warrant for cash, the Holder may elect to receive Warrant Shares
equal to the value of this  Warrant (or equal to the value of the portion of the
Warrant  Shares thereof being  cancelled)  which shall be that number of Warrant
Shares equal to the quotient  obtained by dividing (Z) the product obtained when
(i) the number of Warrant Shares being exercised/cancelled under this Warrant is
multiplied  by (ii) the value of one  Warrant  Share for which  this  Warrant is
being  cancelled on the exercise date  (determined  by  subtracting  the Warrant
Exercise  Price for one Warrant Share on the exercise date from the "Fair Market
Value" (as  hereinafter  defined) of one Warrant Share on the exercise  date) by
(ZZ) the Warrant  Exercise  Price for one  Warrant  Share on the  exercise  date
illustrated as follows:

X = Y(A-B)
    ------
     B

Where     X = the number of Warrant Shares to be issued to Holder
          Y =  the number of Warrant Shares being exercised/cancelled under this
Warrant
          A = the "Fair Market  Value" of one Warrant  Share on the date of 
          exercise 
          B = Exercise Price on the date of exercise

Fair Market Value of one share of a Warrant Share shall mean:



                                       -2-

<PAGE>

         a. If the Corporation's Common Stock is listed on a national securities
exchange or is quoted on the National  Association of Securities  Dealers,  Inc.
Automated Quotation/ National Market System (NASDAQ/NMS), then the average price
of all of the  closing  or last sales  prices,  respectively,  reported  for the
twenty (20) trading days immediately preceding the exercise date.

         b. If the  Corporation's  Common  Stock  is not  listed  on a  national
securities   exchange   or   quoted  on   NASDAQ/NMS,   but  is  traded  in  the
over-the-counter  market,  then the  average  price  of all of the  mean  prices
between the closing bid and asked prices of the  Corporation's  publicly  traded
stock as listed and traded on the NASDAQ  electronic  bulletin  board during the
twenty (20) trading days immediately preceding the exercise date.

         In the  event  of a  cashless  exercise,  the  entire  Warrant  must be
surrendered,  and no new Warrant  shall be issued.  In no event shall a cashless
exercise  entitle the Holder to exercise more than the Warrant  Shares set forth
on page 1 of this Warrant, less any number previously exercised.

         5. Warrant Confers No Rights of Shareholder.  The Holder shall not have
any rights as a shareholder of the Corporation with regard to the Warrant Shares
prior to actual exercise resulting in the purchase of the Warrant Shares.

         6. Holder  Representations  and Warranties.  The Holder  represents and
warrants to the Corporation that:

                  a.   Purchase  For  Own   Account/Regulation   S.  The  Holder
understands  that neither this Warrant nor the Warrant Shares  issuable upon the
exercise of this Warrant have been registered  under the Securities Act of 1933,
as amended (the "Securities  Act"), or any state securities laws, by reason of a
specific exemption from the registration  provisions of the Securities Act which
depends  upon,  among other  things,  the bona fide nature of the  investment as
expressed  herein.  The Holder is acquiring  this Warrant for investment for its
own  account,  and not with a view to, or for  resale in  connection  with,  any
distribution thereof, and it has no present intention of selling or distributing
this Warrant.  The Holder agrees that any Warrant Shares  issuable upon exercise
of this  Warrant will be acquired for  investment  for its own account,  and not
with a view to, or for resale in connection with, any distribution  thereof, and
such  Warrant  Shares  will  not be  registered  under  the  Securities  Act and
applicable  state  securities  laws and that such Warrant  Shares may have to be
held indefinitely unless they are subsequently registered or qualified under the
Securities Act and applicable  state  securities laws or, based on an opinion of
counsel  reasonably  satisfactory  to the  Corporation,  an exemption  from such
registration and qualification is available. The Holder further understands that
the  Corporation is relying on the rules and  regulations  governing  offers and
sales  made  outside  the  United  States  to  non-"U.S.  Persons"  pursuant  to
Regulation  S under the  Securities  Act.  The  Holder,  by  acceptance  hereof,
consents to the  placement  of the  following  restrictive  legends,  or similar
legends,  on each  certificate to be issued to the Holder by the  Corporation in
connection with the issuance of such Warrant Shares:


                                       -3-

<PAGE>

         THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
         UNDER THE  SECURITIES ACT OF 1933, AS AMENDED,  OR QUALIFIED  UNDER ANY
         STATE  SECURITIES  LAW, AND MAY NOT BE SOLD,  TRANSFERRED,  ASSIGNED OR
         HYPOTHECATED  UNLESS (A) THERE IS AN EFFECTIVE  REGISTRATION  STATEMENT
         UNDER  SUCH ACT OR LAWS  COVERING  SUCH  SECURITIES,  OR (B) THE HOLDER
         RECEIVES  AN  OPINION  OF  COUNSEL  FOR THE  HOLDER  OF THE  SECURITIES
         SATISFACTORY  TO THE  CORPORATION,  STATING  THAT SUCH SALE,  TRANSFER,
         ASSIGNMENT  OR  HYPOTHECATION  IS  EXEMPT  FROM  THE  REGISTRATION  AND
         PROSPECTUS  DELIVERY  REQUIREMENTS  OF SUCH  ACT AND THE  QUALIFICATION
         REQUIREMENTS UNDER APPLICABLE STATE LAW.

         THE  SECURITIES   REPRESENTED  BY  THIS   CERTIFICATE  ARE  SUBJECT  TO
         RESTRICTIONS ON TRANSFER PURSUANT TO REGULATION S PROMULGATED UNDER THE
         SECURITIES ACT OF 1933, AS AMENDED,  AND MAY NOT BE SOLD,  TRANSFERRED,
         ASSIGNED  OR  HYPOTHECATED  EXCEPT  PURSUANT  TO THE  PROVISIONS  UNDER
         REGULATION S OR PURSUANT TO REGISTRATION  UNDER SUCH ACT OR PURSUANT TO
         AN AVAILABLE EXEMPTION FROM SUCH REGISTRATION.

         THE SECURITIES  REPRESENTED HEREBY ARE SUBJECT TO CERTAIN  RESTRICTIONS
         ON  TRANSFER  SET  FORTH IN THAT  CERTAIN  MAY 1,  1996  [Don,  review]
         INVESTMENT BANKING AGREEMENT BETWEEN THE ORIGINAL HOLDER HEREOF AND THE
         COMPANY.

                  b.  Access  to Data.  The  Holder  has had an  opportunity  to
discuss the  Corporation's  business,  management and financial affairs with its
management and to obtain any additional  information which the Holder has deemed
necessary or  appropriate  for deciding  whether or not to purchase this Warrant
and  the  Warrant  Shares,  including  the  information  provided  or  otherwise
disclosed under the  Subscription  Agreement.  The Holder  acknowledges  that no
other  representations  or  warranties,  oral or written,  have been made by the
Corporation or any agent thereof except as set forth in this Agreement.

                  c. No  Fairness  Determination.  The  Holder is aware  that no
federal,  state or other agency has made any finding or  determination as to the
fairness of the investment,  nor made any  recommendation or endorsement of this
Warrant or the Warrant Shares.

                  d. Knowledge And Experience. The Holder has such knowledge and
experience in financial and business  matters,  including  investments  in other
start-up companies, that it is capable of evaluating the merits and risks of the
investment  in this Warrant and the Warrant  Shares,  and it is able to bear the
economic risk of such  investment.  Further,  the Holder has such  knowledge and
experience in financial and business matters that he is capable of utilizing the
information  made  available  to him in  connection  with the  offering  of this
Warrant  and the  Warrant  Shares,  of  evaluating  the  merits  and risks of an
investment  in this  Warrant  and the  Warrant  Shares and of making an informed
investment decision with respect to this Warrant and the Warrant Shares.


                                       -4-

<PAGE>

                  e. Limited  Public  Market.  The Holder is aware that there is
currently a very limited  "over-the-counter" public market for the Corporation's
registered securities and that the Corporation became a "reporting issuer" under
the Securities  Exchange Act of 1934, as amended,  on January 27, 1995. There is
no guarantee that a more  established  public market will develop at any time in
the future.  The Holder understands that this Warrant and the Warrant Shares are
all  unregistered  and may not  presently  be sold in even this  limited  public
market.  The Holder  understands that this Warrant and the Warrant Shares cannot
be readily sold or liquidated in case of an emergency or other  financial  need.
The Holder has  sufficient  liquid  assets  available  so that the  purchase and
holding of this Warrant and the Warrant Shares will not cause it undue financial
difficulties.

                  g.  Investment  Experience.   The  Holder  is  an  "accredited
investor" as that term is defined in Regulation D promulgated  by the Securities
and Exchange  Commission.  The term  "accredited  investor"  under  Regulation D
refers to:

         (1) A person or entity who is a director  or  executive  officer of the
         Corporation;

         (2) Any bank as defined in Section  3(a)(2) of the  Securities  Act, or
         any savings and loan  association  or other  institution  as defined in
         Section  3(a)(5)(A)  of  the  Securities  Act  whether  acting  in  its
         individual  or  fiduciary  capacity;  any  broker or dealer  registered
         pursuant  to  Section  15 of the  Exchange  Act;  insurance  company as
         defined in Section  2(13) of the  Securities  Act;  investment  company
         registered  under the  Investment  Company  Act of 1940;  or a business
         development  company as defined in Section  2(a)(48) of that Act; Small
         Business  Investment  Company  licensed  by  the  U.S.  Small  Business
         Administration  under  Section  301(c)  or (d) of  the  Small  Business
         Investment Act of 1958; any plan established and maintained by a state,
         its political subdivisions, or any agency or instrumentality of a state
         or its political subdivisions for the benefit of its employees, if such
         plan has total assets in excess of  $5,000,000;  employee  benefit plan
         within the meaning of the Employee  Retirement  Income  Security Act of
         1974,  if the  investment  decision  is  made by a plan  fiduciary,  as
         defined in Section 3(21) of such Act,  which is either a bank,  savings
         and loan  association,  insurance  company,  or  registered  investment
         adviser,  or if the employee benefit plan has total assets in excess of
         $5,000,000 or, if a self-directed  plan, with investment  decision made
         solely by persons that are accredited investors;

         (3) Any  private  business  development  company  as defined in Section
         202(a)(22) of the Investment Advisers Act of 1940;

         (4) Any  organization  described  in Section  501(c)(3) of the Internal
         Revenue Code, corporation,  Massachusetts or similar business trust, or
         partnership,  not formed for the  specific  purpose of  acquiring  this
         Warrant  or  the  Warrant  Shares,  with  total  assets  in  excess  of
         $5,000,000;

         (5) Any natural person whose  individual net worth,  or joint net worth
         with  that  person's  spouse,  at  the  time  of his  purchase  exceeds
         $1,000,000;


                                       -5-

<PAGE>

         (6) Any  natural  person  who had an  individual  income  in  excess of
         $200,000  during each of the  previous  two years or joint  income with
         that  person's  spouse in excess of $300,000 in each of those years and
         has a reasonable  expectation  of reaching the same income level in the
         current year;

         (7) Any trust,  with total assets in excess of  $5,000,000,  not formed
         for the  specific  purpose of  acquiring  this  Warrant or the  Warrant
         Shares,  whose  purchase is directed by a person who has such knowledge
         and experience in financial and business  matters that he is capable of
         evaluating the merits and risks of the prospective investment; or

         (8) Any  entity  in  which  all of the  equity  owners  are  accredited
         investors.

         As used in this Section 6(g),  the term "net worth" means the excess of
         total assets over total  liabilities.  For the purpose of determining a
         person's net worth,  the  principal  residence  owned by an  individual
         should  be  valued  at  fair  market  value,   including  the  cost  of
         improvements,  net of  current  encumbrances.  As used in this  Section
         6(g),  "income"  means actual  economic  income,  which may differ from
         adjusted  gross  income  for  income  tax  purposes.  Accordingly,  the
         undersigned  should  consider  whether  it should add any or all of the
         following items to its adjusted gross income for income tax purposes in
         order to reflect  more  accurately  its  actual  economic  income:  Any
         amounts attributable to tax-exempt income received, losses claimed as a
         limited  partner in any  limited  partnership,  deductions  claimed for
         depletion,  contributions  to an  IRA or  Keogh  retirement  plan,  and
         alimony payments.

                  h.       Restrictions On Transfer Re Regulation S.

                           (1) Not A "U.S.  Person." The Holder hereby certifies
that (i) it is not a "U.S.  Person" as defined  under Rule 902,  Section  (o) of
Regulation S promulgated  under the  Securities Act (a copy of which is attached
hereto as Schedule 2) and is not  acquiring  this Warrant or the Warrant  Shares
for the account or benefit of any U.S.  Person,  and (ii) it is  acquiring  this
Warrant and the Warrant  Shares in an "offshore  transaction"  as defined  under
Section (i) of such Rule 902 (a copy of which is attached hereto as Schedule 3).

                           (2)  Transfer  Restrictions.  The  Holder  shall  not
attempt to have  registered  any transfer of this Warrant or the Warrant  Shares
not made in accordance  with the  provisions of Regulation S. In addition to any
other  restrictions on transfer set forth in this Warrant,  the Holder agrees to
transfer  this  Warrant or the Warrant  Shares only (i) in  accordance  with the
provisions of Regulation S, pursuant to  registration  under the Securities Act,
or pursuant to an available exemption from registration,  and (ii) in accordance
with any  applicable  state  securities  laws.  Unless so  registered  or exempt
therefrom,  such transfer  restrictions  shall include but not be limited to and
the Holder warrants and represents the following:

                                    (i) The Holder  shall not sell this  Warrant
or the Warrant Shares publicly or privately, or through any short sale, or other
hedging transaction to any U.S. Person,  whether directly or indirectly,  or for
the  account  or  benefit of any such U.S.  Person  for the  restrictive  period
mandated  by  Regulation  S after the  purchase  of this  Warrant or the Warrant
Shares, as applicable, unless registered or exempt from registration;

                                       -6-

<PAGE>

                                    (ii) Any other offer or sale of this Warrant
or the Warrant  Shares shall be made only if (A) during the  restrictive  period
any subsequent  purchaser  certifies in writing that it is not a U.S. Person and
is not acquiring  this Warrant or the Warrant  Shares for the account or benefit
of any U.S.  Person,  or (B) after the  restrictive  period this Warrant and the
Warrant Shares are purchased in a transaction that did not require  registration
under the Securities Act and applicable Blue Sky laws; and

                                    (iii) Any  transferee of this Warrant or the
Warrant  Shares  shall  agree in writing to resell  this  Warrant or the Warrant
Shares,  as applicable,  only in accordance with the provisions of Regulation S,
pursuant to  registration  under the Securities Act, or pursuant to an available
exemption from registration.

                           (3) Restrictions On Resales In the United States. The
Holder understands and acknowledges that the Securities Act prohibits resales of
securities  in the United States  except  pursuant to an effective  registration
statement or an exemption  from  registration  for which the  securities and the
Holder  holding  such   securities   qualifies.   The  Holder   understands  and
acknowledges the requirements for qualifying for an exemption from  registration
afforded by Section 4 of the  Securities  Act and that there can be no assurance
that the Holder will be able to qualify for such an exemption from registration.

         7.  Reservation of Shares.  The Corporation  agrees at all times during
the Exercise Period to have authorized and reserved,  for the exclusive  purpose
of issuance and delivery upon exercise of this Warrant,  a sufficient  number of
shares of its common stock to provide for the exercise of the rights represented
hereby.

         8.   Adjustment  for   Re-Classification   of  Capital  Stock.  If  the
Corporation  at any time  during the  Exercise  Period  shall,  by  subdivision,
combination or re-classification of securities,  change any of the securities to
which  purchase  rights  under this  Warrant  exist under the same or  different
number of  securities  of any class or classes,  this Warrant  shall  thereafter
entitle the Holder to acquire such number and kind of  securities  as would have
been  issuable  as a result of such change  with  respect to the Warrant  Shares
immediately prior to such subdivision,  combination,  or  re-classification.  If
shares of the Corporation's common stock are subdivided into a greater number of
shares of common stock,  the purchase price for the Warrant Shares upon exercise
of this Warrant shall be proportionately reduced and the Warrant Shares shall be
proportionately increased; and conversely, if shares of the Corporation's common
stock are combined into a smaller number of common stock shares, the price shall
be  proportionately  increased,  and the Warrant Shares shall be proportionately
decreased.

         9. Public Offering  Lock-Up.  For a period of up to  one-hundred-eighty
(180)  days (the  "Stand-off  Period"),  Holder  shall not if  requested  by the
Corporation at any time in contemplation of a public registration,  sell, pledge
or  otherwise  transfer  any  Warrant  Shares  (or any  other  shares  exchanged
therefor).  Notwithstanding  the foregoing,  the  Corporation  may exercise this
public offering lock-up only one time.

         10. Loss, Theft,  Destruction or Mutilation of Warrant. Upon receipt by
the

                                       -7-

<PAGE>

Corporation  of  evidence  reasonably  satisfactory  to it of the  loss,  theft,
destruction  or mutilation of any Warrant or stock  certificate,  and in case of
loss, theft or destruction,  of indemnity or security reasonably satisfactory to
it,  and  upon  reimbursement  to the  Corporation  of all  reasonable  expenses
incidental thereto, and upon surrender and cancellation of such Warrant or stock
certificate,  if mutilated,  the Corporation will make and deliver a new Warrant
or stock certificate of like tenor and dated as of such cancellation, in lieu of
this Warrant or stock certificate.

         11. Assignment. The Holder of this Warrant shall not assign or transfer
this Warrant or any of the Warrant  Shares  without the  transferee  meeting the
suitability  requirements set forth in Section 6 (above) and without the consent
of  the  Corporation  and  in  compliance  with  applicable  state  and  federal
securities  laws. In giving its consent,  the Corporation may request an opinion
of counsel reasonably  acceptable to it that such transfer is in compliance with
all applicable state and federal securities laws.

         12.  Governing  Law. This Warrant shall be governed by and construed in
accordance  with the laws of the State of  California  applicable  to  contracts
between  California  residents entered into and to be performed  entirely within
the State of California.

         13. Notices.  Any notice required or permitted under this Warrant shall
be given in writing and shall be deemed effectively given upon personal delivery
to the party to be  notified  by hand or  professional  courier  service  or for
mailings  from and to any address in North  America  (Canada,  United States and
Mexico)  five (5) days after  deposit  with the United  States Post  Office,  by
registered or certified  mail,  postage prepaid and addressed to the party to be
notified at the address indicated for such party in the Subscription  Agreement,
or at such other  address as such party may  designate by ten (10) days' advance
written notice to the other parties.

         14.  Attorneys' Fees. If any action at law or in equity is necessary to
enforce or interpret the terms of this Warrant,  the  prevailing  party shall be
entitled to reasonable  attorneys' fees, costs and  disbursements in addition to
any other relief to which such party may be entitled.

         15.  Amendments.  Any terms of this  Warrant  may be  amended  with the
written  consent  of the  Corporation  and the  holders  of  Series  C  Warrants
representing  not less  than 67% of the  shares of Common  Stock  issuable  upon
exercise of all Series C Warrants.

Dated: October 25, 1996            U.S. ELECTRICAR, INC.

                                     By: /s/ Roy Kusumoto
                                         ---------------------------
                                         Roy Y. Kusumoto, President


                                       -8-

<PAGE>



                               NOTICE OF EXERCISE

To:      U.S. ELECTRICAR, INC.

         (1) The  undersigned  hereby  elects to purchase  __________  shares of
Common Stock of Electricar, Inc., pursuant to the terms of the attached Warrant,
and tenders herewith payment of the purchase price for such shares in full.
         (2) In exercising  this Warrant,  the  undersigned  hereby confirms and
acknowledges  that the shares of Common Stock are being acquired  solely for the
account  of the  undersigned  and not as a  nominee  for any  other  party,  for
investment,  and that the undersigned will not offer,  sell or otherwise dispose
of any such shares of Common  Stock  except  under  circumstances  that will not
result in a violation of the Securities Act of 1933, as amended (the "Securities
Act"), including,  but not limited to, Regulation S promulgated  thereunder,  or
any state securities laws.

         (3) The undersigned hereby certifies that either (i) the undersigned is
not a U.S.  Person (as such term is defined in Regulation S under the Securities
Act), or (ii) the  undersigned  has delivered to the  Corporation  an opinion of
counsel to the effect that this  Warrant and the Warrant  Shares to be delivered
upon  exercise  thereof  have been  registered  under the  Securities  Act or an
exemption from such registration is available.

         (4) The  undersigned  further  certifies that this Warrant is not being
exercised  in the United  States and  understands  and agrees  that the  Warrant
Shares may not be delivered to the United States absent  registration  under the
Securities Act or an available exemption from such registration.

         (5) Please issue a certificate representing said shares of Common Stock
in the name of the undersigned.

         (6)  Please  issue a new  Warrant  for the  unexercised  portion of the
attached Warrant in the name of the undersigned.


                                        ___________________________
                                                 (Name)


_________________                       ___________________________

(Date)                                         (Signature)



                                       -9-

<PAGE>

                                     WARRANT


THE  SECURITIES  REPRESENTED  BY OR  UNDERLYING  THIS  INSTRUMENT  HAVE NOT BEEN
REGISTERED  UNDER THE  SECURITIES  ACT OF 1933, AS AMENDED,  OR QUALIFIED  UNDER
APPLICABLE  STATE  SECURITIES  LAWS AND HAVE BEEN TAKEN FOR INVESTMENT  PURPOSES
ONLY  AND NOT  WITH A VIEW TO OR FOR SALE IN  CONNECTION  WITH ANY  DISTRIBUTION
THEREOF. THE SECURITIES MAY NOT BE SOLD OR OTHERWISE  TRANSFERRED IN THE ABSENCE
OF SUCH  REGISTRATION  AND  QUALIFICATION  WITHOUT AN OPINION OF COUNSEL FOR THE
HOLDER,  CONCURRED  IN BY COUNSEL FOR THE  COMPANY  THAT SUCH  REGISTRATION  AND
QUALIFICATION ARE NOT REQUIRED.

THE  SECURITIES  REPRESENTED  BY OR UNDERLYING  THIS  INSTRUMENT  ARE SUBJECT TO
RESTRICTIONS  ON  TRANSFER  PURSUANT  TO  REGULATION  S  PROMULGATED  UNDER  THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD,  TRANSFERRED,  ASSIGNED
OR HYPOTHECATED EXCEPT PURSUANT TO THE PROVISIONS UNDER REGULATION S OR PURSUANT
TO REGISTRATION  UNDER SUCH ACT OR PURSUANT TO AN AVAILABLE  EXEMPTION FROM SUCH
REGISTRATION.

THE WARRANTS AND WARRANT  SHARES HAVE NOT BEEN  REGISTERED  UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"), AND (i) THE WARRANTS AND THE WARRANT SHARES
MAY NOT BE EXERCISED,  OFFERED OR SOLD BY OR ON BEHALF OF U.S. PERSONS, (ii) THE
WARRANTS MAY NOT BE EXERCISED IN THE UNITED STATES AND (iii) THE WARRANT  SHARES
MAY NOT BE  DELIVERED  IN THE UNITED  STATES  UNLESS,  IN EACH CASE,  THERE IS A
REGISTRATION  STATEMENT IN EFFECT  COVERING  THE WARRANTS AND WARRANT  SHARES OR
THERE IS AVAILABLE AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT.

THE  SECURITIES  REPRESENTED  BY OR UNDERLYING  THIS  INSTRUMENT  ARE SUBJECT TO
CERTAIN  RESTRICTIONS  ON TRANSFER  SET FORTH IN THAT  CERTAIN  OCTOBER 25, 1996
SUBSCRIPTION AGREEMENT BETWEEN THE ORIGINAL HOLDER HEREOF AND THE COMPANY.

No. Series C-12
                                                                1,500,000 Shares


               CASHLESS EXERCISE WARRANT TO PURCHASE COMMON STOCK

         U.S.  ELECTRICAR,  INC., a California  corporation (the "Corporation"),
hereby grants to FONTAL INTERNATIONAL LTD. (the "Holder"), the right to purchase
from the Corporation one million five hundred thousand (1,500,000) shares of the
common stock of the Corporation (the "Warrant Shares"), subject to the terms and
conditions set forth below.  This Warrant is one of a duly authorized  series of
Warrants  of the  Corporation  (which  Warrants  are  identical  except  for the
variations  necessary  to express  the name of the Holder and number of "Warrant
Shares"),  which Warrants together are designated  "Series C Warrants"  acquired
pursuant to the terms and conditions set forth in that certain  October 25, 1996
Subscription Agreement (the Subscription Agreement").

         1.  Term.  This  Warrant  may be  exercised  at any time after the date
hereof through October 25, 1997 (the "Exercise Period").


<PAGE>

         2.  Purchase   Price.   The  purchase  price  for  each  share  of  the
Corporation's common stock purchasable  hereunder shall be Thirty Cents ($0.30),
subject to  adjustment  as  provided in Section 8 below (the  "Warrant  Exercise
Price").

         3.  Exercise of Warrant.  This  Warrant may be exercised in whole or in
part (except for a cashless exercise which shall require exercise in full) , but
not for less than one hundred thousand  (100,000) Warrant Shares (or such lesser
number of Warrant  Shares as may at the time of exercise  constitute the maximum
number  exercisable)  and in excess of 100,000  Warrant  Shares in increments of
10,000  Warrant  Shares.  It is  exercisable,  subject  to the  satisfaction  of
applicable  securities  laws,  at any time  during  the  Exercise  Period by the
surrender of the Warrant to the  Corporation  at its principal  office  together
with the Notice of Exercise annexed hereto duly completed and executed on behalf
of the  Holder,  accompanied  by payment in full of the amount of the  aggregate
purchase price of the Warrant Shares in immediately  available funds,  except if
exercised under the cashless  exercise option as provided below. The Corporation
agrees  that  the  Warrant  Shares  so  purchased  shall  be  issued  as soon as
practicable thereafter,  and that the Holder shall be deemed the record owner of
such  Warrant  Shares as of and from the close of  business on the date on which
this Warrant  shall be  surrendered,  together  with payment in full as required
above.  It shall be a condition  to the exercise of this Warrant that the Holder
or any transferee  hereof certify to the  Corporation,  at the time of exercise,
either that he or it is not a U.S.  Person (as defined in Regulation S under the
Securities Act of 1933, as amended (the "Securities  Act") and that this Warrant
is not being exercised on behalf of a U.S.  Person,  or to provide an opinion of
counsel that the Warrant and the Warrant  Shares to be delivered  upon  exercise
thereof have been registered  under the Securities Act or that an exemption from
the registration  requirements of the Securities Act is available. It shall be a
further  condition  to the  exercise of this Warrant that the Warrant may not be
exercised  in the United  States and the Warrant  Shares may not be delivered to
the United States absent  registration  under the Securities Act or an available
exemption from registration.

         4. Cashless Exercise Option.  Notwithstanding the foregoing,  if on the
date of exercise  the "Fair  Market  Value" of one Warrant  Share is equal to or
greater  than twice the  Warrant  Exercise  Price and during  the  preceding  20
trading  days prior to the date of  exercise  under  this  Warrant  the  average
trading  volume  was in  excess  of  100,000  shares  per  day,  then in lieu of
exercising this Warrant for cash, the Holder may elect to receive Warrant Shares
equal to the value of this  Warrant (or equal to the value of the portion of the
Warrant  Shares thereof being  cancelled)  which shall be that number of Warrant
Shares equal to the quotient  obtained by dividing (Z) the product obtained when
(i) the number of Warrant Shares being exercised/cancelled under this Warrant is
multiplied  by (ii) the value of one  Warrant  Share for which  this  Warrant is
being  cancelled on the exercise date  (determined  by  subtracting  the Warrant
Exercise  Price for one Warrant Share on the exercise date from the "Fair Market
Value" (as  hereinafter  defined) of one Warrant Share on the exercise  date) by
(ZZ) the Warrant  Exercise  Price for one  Warrant  Share on the  exercise  date
illustrated as follows:

X = Y(A-B)
    ------
      B

Where    X = the number of Warrant Shares to be issued to Holder
         Y =  the number of Warrant Shares being exercised/cancelled under this
         Warrant
         A = the  "Fair  Market  Value"  of one  Warrant  Share  on the date of
         exercise
         B = Exercise Price on the date of exercise

Fair Market Value of one share of a Warrant Share shall mean:



                                       -2-

<PAGE>

         a. If the Corporation's Common Stock is listed on a national securities
exchange or is quoted on the National  Association of Securities  Dealers,  Inc.
Automated Quotation/ National Market System (NASDAQ/NMS), then the average price
of all of the  closing  or last sales  prices,  respectively,  reported  for the
twenty (20) trading days immediately preceding the exercise date.

         b. If the  Corporation's  Common  Stock  is not  listed  on a  national
securities   exchange   or   quoted  on   NASDAQ/NMS,   but  is  traded  in  the
over-the-counter  market,  then the  average  price  of all of the  mean  prices
between the closing bid and asked prices of the  Corporation's  publicly  traded
stock as listed and traded on the NASDAQ  electronic  bulletin  board during the
twenty (20) trading days immediately preceding the exercise date.

         In the  event  of a  cashless  exercise,  the  entire  Warrant  must be
surrendered,  and no new Warrant  shall be issued.  In no event shall a cashless
exercise  entitle the Holder to exercise more than the Warrant  Shares set forth
on page 1 of this Warrant, less any number previously exercised.

         5. Warrant Confers No Rights of Shareholder.  The Holder shall not have
any rights as a shareholder of the Corporation with regard to the Warrant Shares
prior to actual exercise resulting in the purchase of the Warrant Shares.

         6. Holder  Representations  and Warranties.  The Holder  represents and
warrants to the Corporation that:

                  a.   Purchase  For  Own   Account/Regulation   S.  The  Holder
understands  that neither this Warrant nor the Warrant Shares  issuable upon the
exercise of this Warrant have been registered  under the Securities Act of 1933,
as amended (the "Securities  Act"), or any state securities laws, by reason of a
specific exemption from the registration  provisions of the Securities Act which
depends  upon,  among other  things,  the bona fide nature of the  investment as
expressed  herein.  The Holder is acquiring  this Warrant for investment for its
own  account,  and not with a view to, or for  resale in  connection  with,  any
distribution thereof, and it has no present intention of selling or distributing
this Warrant.  The Holder agrees that any Warrant Shares  issuable upon exercise
of this  Warrant will be acquired for  investment  for its own account,  and not
with a view to, or for resale in connection with, any distribution  thereof, and
such  Warrant  Shares  will  not be  registered  under  the  Securities  Act and
applicable  state  securities  laws and that such Warrant  Shares may have to be
held indefinitely unless they are subsequently registered or qualified under the
Securities Act and applicable  state  securities laws or, based on an opinion of
counsel  reasonably  satisfactory  to the  Corporation,  an exemption  from such
registration and qualification is available. The Holder further understands that
the  Corporation is relying on the rules and  regulations  governing  offers and
sales  made  outside  the  United  States  to  non-"U.S.  Persons"  pursuant  to
Regulation  S under the  Securities  Act.  The  Holder,  by  acceptance  hereof,
consents to the  placement  of the  following  restrictive  legends,  or similar
legends,  on each  certificate to be issued to the Holder by the  Corporation in
connection with the issuance of such Warrant Shares:


                                       -3-

<PAGE>

         THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
         UNDER THE  SECURITIES ACT OF 1933, AS AMENDED,  OR QUALIFIED  UNDER ANY
         STATE  SECURITIES  LAW, AND MAY NOT BE SOLD,  TRANSFERRED,  ASSIGNED OR
         HYPOTHECATED  UNLESS (A) THERE IS AN EFFECTIVE  REGISTRATION  STATEMENT
         UNDER  SUCH ACT OR LAWS  COVERING  SUCH  SECURITIES,  OR (B) THE HOLDER
         RECEIVES  AN  OPINION  OF  COUNSEL  FOR THE  HOLDER  OF THE  SECURITIES
         SATISFACTORY  TO THE  CORPORATION,  STATING  THAT SUCH SALE,  TRANSFER,
         ASSIGNMENT  OR  HYPOTHECATION  IS  EXEMPT  FROM  THE  REGISTRATION  AND
         PROSPECTUS  DELIVERY  REQUIREMENTS  OF SUCH  ACT AND THE  QUALIFICATION
         REQUIREMENTS UNDER APPLICABLE STATE LAW.

         THE  SECURITIES   REPRESENTED  BY  THIS   CERTIFICATE  ARE  SUBJECT  TO
         RESTRICTIONS ON TRANSFER PURSUANT TO REGULATION S PROMULGATED UNDER THE
         SECURITIES ACT OF 1933, AS AMENDED,  AND MAY NOT BE SOLD,  TRANSFERRED,
         ASSIGNED  OR  HYPOTHECATED  EXCEPT  PURSUANT  TO THE  PROVISIONS  UNDER
         REGULATION S OR PURSUANT TO REGISTRATION  UNDER SUCH ACT OR PURSUANT TO
         AN AVAILABLE EXEMPTION FROM SUCH REGISTRATION.

         THE SECURITIES  REPRESENTED HEREBY ARE SUBJECT TO CERTAIN  RESTRICTIONS
         ON  TRANSFER  SET  FORTH IN THAT  CERTAIN  MAY 1,  1996  [Don,  review]
         INVESTMENT BANKING AGREEMENT BETWEEN THE ORIGINAL HOLDER HEREOF AND THE
         COMPANY.

                  b.  Access  to Data.  The  Holder  has had an  opportunity  to
discuss the  Corporation's  business,  management and financial affairs with its
management and to obtain any additional  information which the Holder has deemed
necessary or  appropriate  for deciding  whether or not to purchase this Warrant
and  the  Warrant  Shares,  including  the  information  provided  or  otherwise
disclosed under the  Subscription  Agreement.  The Holder  acknowledges  that no
other  representations  or  warranties,  oral or written,  have been made by the
Corporation or any agent thereof except as set forth in this Agreement.

                  c. No  Fairness  Determination.  The  Holder is aware  that no
federal,  state or other agency has made any finding or  determination as to the
fairness of the investment,  nor made any  recommendation or endorsement of this
Warrant or the Warrant Shares.

                  d. Knowledge And Experience. The Holder has such knowledge and
experience in financial and business  matters,  including  investments  in other
start-up companies, that it is capable of evaluating the merits and risks of the
investment  in this Warrant and the Warrant  Shares,  and it is able to bear the
economic risk of such  investment.  Further,  the Holder has such  knowledge and
experience in financial and business matters that he is capable of utilizing the
information  made  available  to him in  connection  with the  offering  of this
Warrant  and the  Warrant  Shares,  of  evaluating  the  merits  and risks of an
investment  in this  Warrant  and the  Warrant  Shares and of making an informed
investment decision with respect to this Warrant and the Warrant Shares.


                                       -4-

<PAGE>



                  e. Limited  Public  Market.  The Holder is aware that there is
currently a very limited  "over-the-counter" public market for the Corporation's
registered securities and that the Corporation became a "reporting issuer" under
the Securities  Exchange Act of 1934, as amended,  on January 27, 1995. There is
no guarantee that a more  established  public market will develop at any time in
the future.  The Holder understands that this Warrant and the Warrant Shares are
all  unregistered  and may not  presently  be sold in even this  limited  public
market.  The Holder  understands that this Warrant and the Warrant Shares cannot
be readily sold or liquidated in case of an emergency or other  financial  need.
The Holder has  sufficient  liquid  assets  available  so that the  purchase and
holding of this Warrant and the Warrant Shares will not cause it undue financial
difficulties.

                  g.  Investment  Experience.   The  Holder  is  an  "accredited
investor" as that term is defined in Regulation D promulgated  by the Securities
and Exchange  Commission.  The term  "accredited  investor"  under  Regulation D
refers to:

         (1) A person or entity who is a director  or  executive  officer of the
         Corporation;

         (2) Any bank as defined in Section  3(a)(2) of the  Securities  Act, or
         any savings and loan  association  or other  institution  as defined in
         Section  3(a)(5)(A)  of  the  Securities  Act  whether  acting  in  its
         individual  or  fiduciary  capacity;  any  broker or dealer  registered
         pursuant  to  Section  15 of the  Exchange  Act;  insurance  company as
         defined in Section  2(13) of the  Securities  Act;  investment  company
         registered  under the  Investment  Company  Act of 1940;  or a business
         development  company as defined in Section  2(a)(48) of that Act; Small
         Business  Investment  Company  licensed  by  the  U.S.  Small  Business
         Administration  under  Section  301(c)  or (d) of  the  Small  Business
         Investment Act of 1958; any plan established and maintained by a state,
         its political subdivisions, or any agency or instrumentality of a state
         or its political subdivisions for the benefit of its employees, if such
         plan has total assets in excess of  $5,000,000;  employee  benefit plan
         within the meaning of the Employee  Retirement  Income  Security Act of
         1974,  if the  investment  decision  is  made by a plan  fiduciary,  as
         defined in Section 3(21) of such Act,  which is either a bank,  savings
         and loan  association,  insurance  company,  or  registered  investment
         adviser,  or if the employee benefit plan has total assets in excess of
         $5,000,000 or, if a self-directed  plan, with investment  decision made
         solely by persons that are accredited investors;

         (3) Any  private  business  development  company  as defined in Section
         202(a)(22) of the Investment Advisers Act of 1940;

         (4) Any  organization  described  in Section  501(c)(3) of the Internal
         Revenue Code, corporation,  Massachusetts or similar business trust, or
         partnership,  not formed for the  specific  purpose of  acquiring  this
         Warrant  or  the  Warrant  Shares,  with  total  assets  in  excess  of
         $5,000,000;

         (5) Any natural person whose  individual net worth,  or joint net worth
         with  that  person's  spouse,  at  the  time  of his  purchase  exceeds
         $1,000,000;




                                       -5-

<PAGE>

         (6) Any  natural  person  who had an  individual  income  in  excess of
         $200,000  during each of the  previous  two years or joint  income with
         that  person's  spouse in excess of $300,000 in each of those years and
         has a reasonable  expectation  of reaching the same income level in the
         current year;

         (7) Any trust,  with total assets in excess of  $5,000,000,  not formed
         for the  specific  purpose of  acquiring  this  Warrant or the  Warrant
         Shares,  whose  purchase is directed by a person who has such knowledge
         and experience in financial and business  matters that he is capable of
         evaluating the merits and risks of the prospective investment; or

         (8) Any  entity  in  which  all of the  equity  owners  are  accredited
         investors.

         As used in this Section 6(g),  the term "net worth" means the excess of
         total assets over total  liabilities.  For the purpose of determining a
         person's net worth,  the  principal  residence  owned by an  individual
         should  be  valued  at  fair  market  value,   including  the  cost  of
         improvements,  net of  current  encumbrances.  As used in this  Section
         6(g),  "income"  means actual  economic  income,  which may differ from
         adjusted  gross  income  for  income  tax  purposes.  Accordingly,  the
         undersigned  should  consider  whether  it should add any or all of the
         following items to its adjusted gross income for income tax purposes in
         order to reflect  more  accurately  its  actual  economic  income:  Any
         amounts attributable to tax-exempt income received, losses claimed as a
         limited  partner in any  limited  partnership,  deductions  claimed for
         depletion,  contributions  to an  IRA or  Keogh  retirement  plan,  and
         alimony payments.

                  h.       Restrictions On Transfer Re Regulation S.

                           (1) Not A "U.S.  Person." The Holder hereby certifies
that (i) it is not a "U.S.  Person" as defined  under Rule 902,  Section  (o) of
Regulation S promulgated  under the  Securities Act (a copy of which is attached
hereto as Schedule 2) and is not  acquiring  this Warrant or the Warrant  Shares
for the account or benefit of any U.S.  Person,  and (ii) it is  acquiring  this
Warrant and the Warrant  Shares in an "offshore  transaction"  as defined  under
Section (i) of such Rule 902 (a copy of which is attached hereto as Schedule 3).

                           (2)  Transfer  Restrictions.  The  Holder  shall  not
attempt to have  registered  any transfer of this Warrant or the Warrant  Shares
not made in accordance  with the  provisions of Regulation S. In addition to any
other  restrictions on transfer set forth in this Warrant,  the Holder agrees to
transfer  this  Warrant or the Warrant  Shares only (i) in  accordance  with the
provisions of Regulation S, pursuant to  registration  under the Securities Act,
or pursuant to an available exemption from registration,  and (ii) in accordance
with any  applicable  state  securities  laws.  Unless so  registered  or exempt
therefrom,  such transfer  restrictions  shall include but not be limited to and
the Holder warrants and represents the following:

                                    (i) The Holder  shall not sell this  Warrant
or the Warrant Shares publicly or privately, or through any short sale, or other
hedging transaction to any U.S. Person,  whether directly or indirectly,  or for
the  account  or  benefit of any such U.S.  Person  for the  restrictive  period
mandated  by  Regulation  S after the  purchase  of this  Warrant or the Warrant
Shares, as applicable, unless registered or exempt from registration;

                                       -6-

<PAGE>

                                    (ii) Any other offer or sale of this Warrant
or the Warrant  Shares shall be made only if (A) during the  restrictive  period
any subsequent  purchaser  certifies in writing that it is not a U.S. Person and
is not acquiring  this Warrant or the Warrant  Shares for the account or benefit
of any U.S.  Person,  or (B) after the  restrictive  period this Warrant and the
Warrant Shares are purchased in a transaction that did not require  registration
under the Securities Act and applicable Blue Sky laws; and

                                    (iii) Any  transferee of this Warrant or the
Warrant  Shares  shall  agree in writing to resell  this  Warrant or the Warrant
Shares,  as applicable,  only in accordance with the provisions of Regulation S,
pursuant to  registration  under the Securities Act, or pursuant to an available
exemption from registration.

                           (3) Restrictions On Resales In the United States. The
Holder understands and acknowledges that the Securities Act prohibits resales of
securities  in the United States  except  pursuant to an effective  registration
statement or an exemption  from  registration  for which the  securities and the
Holder  holding  such   securities   qualifies.   The  Holder   understands  and
acknowledges the requirements for qualifying for an exemption from  registration
afforded by Section 4 of the  Securities  Act and that there can be no assurance
that the Holder will be able to qualify for such an exemption from registration.

         7.  Reservation of Shares.  The Corporation  agrees at all times during
the Exercise Period to have authorized and reserved,  for the exclusive  purpose
of issuance and delivery upon exercise of this Warrant,  a sufficient  number of
shares of its common stock to provide for the exercise of the rights represented
hereby.

         8.   Adjustment  for   Re-Classification   of  Capital  Stock.  If  the
Corporation  at any time  during the  Exercise  Period  shall,  by  subdivision,
combination or re-classification of securities,  change any of the securities to
which  purchase  rights  under this  Warrant  exist under the same or  different
number of  securities  of any class or classes,  this Warrant  shall  thereafter
entitle the Holder to acquire such number and kind of  securities  as would have
been  issuable  as a result of such change  with  respect to the Warrant  Shares
immediately prior to such subdivision,  combination,  or  re-classification.  If
shares of the Corporation's common stock are subdivided into a greater number of
shares of common stock,  the purchase price for the Warrant Shares upon exercise
of this Warrant shall be proportionately reduced and the Warrant Shares shall be
proportionately increased; and conversely, if shares of the Corporation's common
stock are combined into a smaller number of common stock shares, the price shall
be  proportionately  increased,  and the Warrant Shares shall be proportionately
decreased.

         9. Public Offering  Lock-Up.  For a period of up to  one-hundred-eighty
(180)  days (the  "Stand-off  Period"),  Holder  shall not if  requested  by the
Corporation at any time in contemplation of a public registration,  sell, pledge
or  otherwise  transfer  any  Warrant  Shares  (or any  other  shares  exchanged
therefor).  Notwithstanding  the foregoing,  the  Corporation  may exercise this
public offering lock-up only one time.

         10. Loss, Theft,  Destruction or Mutilation of Warrant. Upon receipt by
the 






                                       -7-

<PAGE>

Corporation  of  evidence  reasonably  satisfactory  to it of the  loss,  theft,
destruction  or mutilation of any Warrant or stock  certificate,  and in case of
loss, theft or destruction,  of indemnity or security reasonably satisfactory to
it,  and  upon  reimbursement  to the  Corporation  of all  reasonable  expenses
incidental thereto, and upon surrender and cancellation of such Warrant or stock
certificate,  if mutilated,  the Corporation will make and deliver a new Warrant
or stock certificate of like tenor and dated as of such cancellation, in lieu of
this Warrant or stock certificate.

         11. Assignment. The Holder of this Warrant shall not assign or transfer
this Warrant or any of the Warrant  Shares  without the  transferee  meeting the
suitability  requirements set forth in Section 6 (above) and without the consent
of  the  Corporation  and  in  compliance  with  applicable  state  and  federal
securities  laws. In giving its consent,  the Corporation may request an opinion
of counsel reasonably  acceptable to it that such transfer is in compliance with
all applicable state and federal securities laws.

         12.  Governing  Law. This Warrant shall be governed by and construed in
accordance  with the laws of the State of  California  applicable  to  contracts
between  California  residents entered into and to be performed  entirely within
the State of California.

         13. Notices.  Any notice required or permitted under this Warrant shall
be given in writing and shall be deemed effectively given upon personal delivery
to the party to be  notified  by hand or  professional  courier  service  or for
mailings  from and to any address in North  America  (Canada,  United States and
Mexico)  five (5) days after  deposit  with the United  States Post  Office,  by
registered or certified  mail,  postage prepaid and addressed to the party to be
notified at the address indicated for such party in the Subscription  Agreement,
or at such other  address as such party may  designate by ten (10) days' advance
written notice to the other parties.

         14.  Attorneys' Fees. If any action at law or in equity is necessary to
enforce or interpret the terms of this Warrant,  the  prevailing  party shall be
entitled to reasonable  attorneys' fees, costs and  disbursements in addition to
any other relief to which such party may be entitled.

         15.  Amendments.  Any terms of this  Warrant  may be  amended  with the
written  consent  of the  Corporation  and the  holders  of  Series  C  Warrants
representing  not less  than 67% of the  shares of Common  Stock  issuable  upon
exercise of all Series C Warrants.

Dated: October 25, 1996                  U.S. ELECTRICAR, INC.

                                           By: /s/ Roy Kusumoto
                                               ---------------------------
                                               Roy Y. Kusumoto, President


                                       -8-

<PAGE>

                               NOTICE OF EXERCISE

To:      U.S. ELECTRICAR, INC.

         (1) The  undersigned  hereby  elects to purchase  __________  shares of
Common Stock of Electricar, Inc., pursuant to the terms of the attached Warrant,
and tenders herewith payment of the purchase price for such shares in full.

         (2) In exercising  this Warrant,  the  undersigned  hereby confirms and
acknowledges  that the shares of Common Stock are being acquired  solely for the
account  of the  undersigned  and not as a  nominee  for any  other  party,  for
investment,  and that the undersigned will not offer,  sell or otherwise dispose
of any such shares of Common  Stock  except  under  circumstances  that will not
result in a violation of the Securities Act of 1933, as amended (the "Securities
Act"), including,  but not limited to, Regulation S promulgated  thereunder,  or
any state securities laws.

         (3) The undersigned hereby certifies that either (i) the undersigned is
not a U.S.  Person (as such term is defined in Regulation S under the Securities
Act), or (ii) the  undersigned  has delivered to the  Corporation  an opinion of
counsel to the effect that this  Warrant and the Warrant  Shares to be delivered
upon  exercise  thereof  have been  registered  under the  Securities  Act or an
exemption from such registration is available.

         (4) The  undersigned  further  certifies that this Warrant is not being
exercised  in the United  States and  understands  and agrees  that the  Warrant
Shares may not be delivered to the United States absent  registration  under the
Securities Act or an available exemption from such registration.

         (5) Please issue a certificate representing said shares of Common Stock
in the name of the undersigned.

         (6)  Please  issue a new  Warrant  for the  unexercised  portion of the
attached Warrant in the name of the undersigned.


                                        ___________________________
                                                 (Name)


_________________                       ___________________________

(Date)                                         (Signature)


                                       -9-