FORM 10Q
              SECURITIES AND EXCHANGE COMMISSION
                    Washington, D.C.  20549

(Mark One)
[X]       QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
          SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2000
                                                  OR
[ ]       TRANSITION  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
          EXCHANGE ACT OF 1934

For the transition period from __________ to __________.

Commission file number 0-16323

                            ELECTROSOURCE, INC.

          (Exact name of Registrant as specified in its charter)

      Delaware                                  742466304
State or other jurisdiction of      (I.R.S. Employer Identification No.)
incorporation or organization)

2809 Interstate 35 South, San Marcos, Texas           78666
(Address of principal executive offices)            (Zip Code)


Registrant's telephone number, including area code:        (512) 753-6500

     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.

Yes X  No __

               APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                  PROCEEDINGS DURING THE PRECEDING FIVE YEARS

     Indicate by check mark whether the registrant has filed all documents
and reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a
plan confirmed by a court.

Yes  __  No __

                    APPLICABLE ONLY TO CORPORATE ISSUERS:

     Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date:  14,486,428
shares as of November 13, 2000.



                          INDEX TO FINANCIAL STATEMENTS
                                September 30, 2000

ELECTROSOURCE, INC.                          COMMISSION FILE NUMBER 0-16323

PART I - FINANCIAL INFORMATION

     Item 1.  Financial Statements.

          Condensed Balance Sheets at September 30, 2000 (Unaudited)
            and December 31, 1999                                     Page  3

          Condensed Statements of Operations for the three and
            nine months ended September 30, 2000 and 1999 (Unaudited) Page  4

          Condensed Statements of Cash Flows for the three and nine
            months ended September 30, 2000 and 1999 (Unaudited)      Page  5

          Notes to Condensed Financial Statements (Unaudited)         Page  6

     Item 2.  Management's Discussion and Analysis of Financial
       Condition and Results of Operations (Unaudited)                Page  8

PART II - OTHER INFORMATION

     Item 1.  Legal Proceedings                                       Page 12

     Item 2.  Changes in Securities                                   Page 12

     Item 3.  Defaults On Senior Securities                           Page 12

     Item 4.  Submission of Matters to a Vote of Security Holders     Page 12

     Item 5.  Other Information                                       Page 12

     Item 6.  Exhibits and Reports on Form 8-K                        Page 12

INDEX TO EXHIBITS                                                     Page 15



                    Part I - Financial Information
Item 1.  Financial Statements
                         Electrosource, Inc.
                      Condensed Balance Sheets

                                    September 30, 2000   December 31,
                                        (Unaudited)          1999
ASSETS

CURRENT ASSETS
  Cash and cash equivalents                $   16,203    $  157,008
  Trade receivables                         3,301,682     1,417,736
  Inventories                                 203,600       167,569
  Prepaid expenses and other assets            53,802        45,247
TOTAL CURRENT ASSETS                        3,575,287     1,787,560
PROPERTY  AND  EQUIPMENT (net of
  accumulated depreciation of $4,781,514
  in 2000 and $4,322,045 in 1999)           2,654,212     2,753,849

INTANGIBLE  ASSETS (net of Accumulated
  Amortization of $2,376,832 in 2000 and
  $2,235,217 in 1999)                         671,842       813,457

OTHER ASSETS                                   50,250        52,500
TOTAL ASSETS                               $6,951,591    $5,407,366

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
  Accounts payable                         $1,084,988    $1,044,086
  Accrued liabilities                       2,042,006     1,399,285
  Deferred revenue and advance
    payments on batteries                     269,625       387,421
  Current portion of capital lease
    obligations                                78,809        71,513

TOTAL CURRENT LIABILITIES                   3,475,428     2,902,305

CAPITAL LEASE OBLIGATIONS
  (less current portion)                       82,873             -

SHAREHOLDERS' EQUITY (DEFICIT)
  Common  Stock, par value  $1.00 per
    share; authorized 50,000,000 shares;
    issued and outstanding 14,486,428,
    in 2000 and 12,137,699 in 1999         14,486,428    12,137,699
  Preferred Stock, par value $1.00 per
    share; authorized 10,000,000 shares;
    no shares issued or outstanding
    issued or outstanding                           -             -
  Common Stock subscription receivable       (467,663)     (467,663)
  Warrants                                          -             -
  Paid in capital                          52,187,605    51,552,598
  Accumulated deficit                     (62,813,080)  (60,717,573)
                                            3,393,290     2,505,061
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY                      $ 6,951,591   $ 5,407,366

See notes to financial statements.


                              Electrosource, Inc.
                   Condensed Statements of Operations (Unaudited)

                           Three Months Ended         Nine Months Ended
                              September 30,              September 30,
                            2000         1999         2000        1999
Revenues
  Battery sale           $239,496     $152,230   $  749,532   $  427,204
  Project revenue         514,975      632,312    1,591,258    1,097,498
  Other income              9,836       53,338       24,808      108,154
  Interest income               4           13        1,666           77
                          764,311      837,893    2,367,264    1,632,933
Costs and expenses
  Manufacturing           671,289      569,167    2,190,022    1,897,466
  Selling, general and
    administrative        278,628      171,635    1,057,501      736,290
  Research and
    development           197,461      387,795      519,589      939,843
  Technology license
    and royalties          25,000       25,000       75,000       75,000
  Depreciation and
    amortization          187,740      223,589      601,086      690,687
  Interest expense         13,146        3,866       19,573       13,292
                        1,373,264    1,381,052    4,462,771    4,352,578
Loss before
  income taxes           (608,953)    (543,159)  (2,095,507)  (2,719,645)

  Income taxes                  -            -            -            -

Net loss                $(608,953)   $(543,159) $(2,095,507) $(2,719,645)

Net loss per
  common share             $(0.04)      $(0.05)      $(0.16)      $(0.28)

Average common shares
  outstanding          14,338,473   10,695,327   13,456,447    9,652,391

See notes to condensed financial statements.


                         Electrosource, Inc.
               Condensed Statements of Cash Flows Unaudited)

                                         Nine Months Ended September 30,
                                              2000             1999
OPERATING ACTIVITIES
  Net loss                                $ (2,095,507)    $(2,719,645)
  Adjustments to reconcile net
    loss to net cash used in
    operating activities:
      Depreciation and amortization            601,084         684,486
      Non-cash interest expense                  2,250          44,888
  Changes in operating assets
    and liabilities:
      Increase in trade receivables         (1,883,946)       (915,009)
      (Increase) Decrease in inventories       (36,031)        176,986
      Increase in prepaid expenses
        and other assets                        (8,555)            (70)
      Increase (decrease)in accounts
        payable and accrued liabilities        683,623         (40,200)
      Decrease in deferred revenue and
        advance payments on batteries         (117,796)       (253,134)
CASH USED IN OPERATING ACTIVITIES           (2,854,878)     (3,021,698)

INVESTING ACTIVITIES
  Purchases of property and equipment, net    (218,786)        (56,890)
CASH USED IN INVESTING ACTIVITIES             (218,786)        (56,890)

FINANCING ACTIVITIES
  Payment of capital lease obligations         (50,877)              -
  Proceeds from issuances of
    common stock, net                        2,983,736       2,877,186
CASH PROVIDED BY FINANCING ACTIVITIES        2,932,859       2,877,186

INCREASE (DECREASE) IN CASH
  AND CASH EQUIVALENTS                        (140,805)       (201,402)

Cash and cash equivalents
  at beginning of period                       157,008         207,246

CASH AND CASH EQUIVALENTS AT END OF PERIOD      16,203           5,844


See notes to financial statements.


Item 1 Notes to Condensed Financial Statements (Unaudited)

NOTE A - BASIS OF PRESENTATION

The accompanying unaudited condensed financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information.  Accordingly, they do not include all of the
information and notes required by generally accepted accounting principles
for complete financial statements.  In the opinion of management, all
adjustments, consisting of normal recurring accruals, considered necessary
for a fair presentation have been included.  These interim financial
statements should be read in conjunction with the financial statements and
notes thereto included in the Company's Annual Report on Form 10-K for the
year ended December 31, 1999, and are not necessarily indicative of results
for the entire year.


NOTE B - INVENTORIES

                                             2000         1999

      Raw materials                       $117,620      $121,027
      Work in progress                      76,949        46,222
      Finished goods                         9,031           320
                                          $203,600      $167,569


NOTE C - PROPERTY AND EQUIPMENT

                                             2000          1999

      Office equipment                   $  801,610    $  801,610
      Self constructed assets in
        progress                            241,183             -
      Production and lab equipment        5,517,014     5,398,365
      Leasehold improvements                875,919       875,919
                                          7,435,726     7,075,894
      Less - accumulated depreciation
        and amortization                 (4,781,514)   (4,322,045)
      Total Property and Equipment       $2,654,212    $2,753,849


NOTE D - CONTINGENCIES

In June of 2000, the Company entered into two engagement letters with an
investment banking firm in connection with the Company's efforts to raise
additional capital.  Subsequently, negotiations with respect to a proposed
sale of securities terminated.  The investment banker has notified the
Company that it believes the Company owes the banking firm a total of
$200,000 under the break-up provision of the engagement letters.  The
Company disputes the claim.  Also, the Company is involved in certain
contingencies incidental to its business.  While the ultimate results of
these matters cannot be predicted with certainty, management does not
expect them to have a material adverse effect on the financial position
of the Company.


NOTE E - EARNINGS PER SHARE

Basic and diluted loss per share is based on the average number of shares
of common stock outstanding during each period. Since the Company has
experienced net operating losses, outstanding options and warrants to
purchase common stock have an antidilutive effect.  Therefore, such options
and warrants were not included in the diluted loss per share calculation.


NOTE F - LIQUIDITY

Under the terms of an Agreement entered into with the Company in June 1998,
Kamkorp Limited ("Kamkorp") has provided $6,000,000 of equity funding for
6,000,000 Common Shares ("shares") at $1.00 per share.  In addition,
Kamkorp was granted an option to purchase up to 3,000,000 shares at $1.00
per share under the initial agreement.  On October 27, 1999, the Company
granted Kamkorp an option to purchase an additional 3,000,000 shares of
its Common Stock at a price of $1.00 per share.  As of November 13, 2000,
Kamkorp has exercised 2,500,000 of these shares and notified the Company
that it will exercise the remaining 500,000.  As of September 30, 2000,
Kamkorp is the record owner of 6,130,000 shares or 42.3% of the Company's
14,486,428 outstanding shares of Common Stock and, including options to
purchase Common Stock, the beneficial owner of 8,776,500 shares or 51% of
the Company's Common Stock (assuming the purchase of the 2,646,500
unexercised shares remaining under the Agreement).  Kamkorp has purchased
2,000,000 shares (13.8%) and 723,500 shares (5.0%) under the Agreements
and assigned the stock to Kamkorp Holdings Limited ("KHL") and Kamkorp
Microelectronics SA ("KM"), respectively.  Neither KHL or KM are
subsidiaries of Kamkorp Limited.  The Company has issued 500,000 (3.5%)
shares to Park Tower Management Limited at the request of Kamkorp Limited
under the Agreement.  The Company granted Kamkorp demand and piggyback
registration rights with respect to all such shares.

In accordance with the terms of the Agreement, Kamkorp nominated three
members of the Company's Board of Directors, who were unanimously approved
by the Board of Directors, and has the ability to ultimately have control
of the Board of Directors.  Additionally, pursuant to the terms of the
Agreement, the Company must obtain approval from Kamkorp for all important
management policies and decisions, which include the following:

     a.  the issuance of Common Stock or any security which provides
         for the right to acquire Common Stock, or any other capital stock
         of the Company;
     b.  overall policy decisions relating to business direction and
         manufacturing capacity;
     c.  any agreement or commitment that materially affects or
         modifies the intellectual property owned by the Company;
     d.  approval of the annual operating budget, capital budget,
         overhead budgets and business plans of the Company;
     e.  approval of any merger, consolidation, partnership or joint venture;
     f.  approval of transfer of any assets of the Company with a fair
         market value greater than $100,000;
     g.  incurring indebtedness for borrowed money, granting any material
         pledge or security interest in the assets of the Company;
     h.  increasing the size of the Company's Board of Directors;
     i.  amending the Company's Certificate of Incorporation or Bylaws;
     j.  entering into any transaction involving an amount greater than, or
         having a value in excess of $100,000 or involving a term or
         commitment for more than 12 months; and
     k.  other various management policies and decisions.

During the nine months ended September 30, 2000, existing battery orders
and contract work have not been adequate to sustain the Company on an
ongoing basis and the Company continues to be dependent on cash payments
from Kamkorp and its affiliates to continue operations on a day-to-day basis.
The Company anticipates that funds will be available from Kamkorp in an
amount sufficient to sustain operations; however, Kamkorp is not obligated
to provide this funding.

The Company has approximately $1,078,000 of outstanding accounts payable,
as of November 10, 2000, most of which is payable to raw materials
suppliers and service providers, some of which is considerably past due.
In the first nine months of 2000, several vendors and service providers
have filed suits against the Company.  Payout agreements were worked out
with most of these vendors and service providers.  Currently, the Company
is in default on most of these payout agreements.  One of these agreements
was with the Hays County Tax Assessor-Collector for unpaid property taxes.
On July 31, 2000, the Company was served a Tax Search and Seizure Warrant
by Hays County for the collection of $195,359 in cash or the equivalent in
personal property owned by the Company.  Subsequently, the Company has paid
the total amount that was due to the Hays County Tax Assessor-Collector.
Another of these agreements was with an equipment leasing firm which
repossessed equipment in October since the Company was unable to continue
making the agreed payments.  The Company is making efforts to satisfy these
old obligations while continuing to produce limited quantities of batteries
for its customers.

As of November 10, 2000 the Company has not met its obligations to pay
certain monthly operating costs including building rent, utilities,
corporate insurance premiums, worker's compensation insurance premiums,
payroll, employee health and life insurance premiums, payments to the
Internal Revenue Service for payroll taxes, 401(k) contributions and
employee expense reports.

Funding from Kamkorp, additional battery orders, or other financing will
be required to continue operations.  There can be no assurance that the
Company will obtain such additional funding or battery orders.

The Company's Common Stock is traded in the Over-the-Counter Market and is
reported on the Nasdaq Stock Markets. In order to maintain listing by
Nasdaq under rules which went into effect in February 1998, the Company must
maintain a minimum $2,000,000 of net tangible assets (total assets,
excluding goodwill, minus total liabilities) and the Company's closing
price cannot fall below $1.00 per share for 30 consecutive trade dates.
On April 15, 1999, the Company received notice from Nasdaq that it was
concerned that the Company may not be able to sustain compliance with the
continued listing requirements of Nasdaq in light of the "going concern"
opinion from its independent auditor.  To address this concern Nasdaq
requested a detailed letter from the Company on or about April 30, 1999,
discussing the timeline for resolution of these items and a discussion
explaining why the Company believes it will be able to sustain compliance
with the continued listing standards of Nasdaq.  The Company complied with
this request on April 30, 1999.  Additionally, on May 20, 1999, the Company
received notice that since the Company failed to meet the requirement for
net tangible assets of $2 million on the March 31, 1999 Form 10-Q, the
Company would be required to submit before June 4, 1999, a proposal for
achieving compliance.  This proposal was submitted June 3, 1999.  The
Nasdaq Staff responded to both of these issues in a letter dated July 14,
1999.  The Staff reviewed the Company's plan for regaining and maintaining
compliance and stated while the Staff has determined that the Company will
not be delisted due to its previously cited failures to comply, they have
determined to apply more stringent reporting requirements.  The Company was
required to submit an internal balance sheet and statement of operations
for the period ended July 31, 1999 by August 20, 1999.  Thereafter, until
further notice, the Company has been required to submit by the 20th of
each month, an internal balance sheet and statement of operations for the
preceding month's end.  To date, the Company has complied with this
requirement.  The Company is required to keep Nasdaq apprised of all
material events and any changes in its financial statements.  Should the
Company fail to maintain $2 million net tangible assets, the Staff will
issue a formal delisting letter to the Company.  If the Company does not
continue to maintain the required listing criteria, it is likely that the
Company's shares would be delisted from the Nasdaq Small Cap Market at a
time specified by Nasdaq, in which event the shares could be quoted on
the Over-the-Counter ("OTC") Bulletin Board and/or the Pink Sheets of the
National Quotation Board ("NQB"). In such trading markets, brokers and
dealers effecting trades in the Common Stock would become subject to the
Securities and Exchange Commission rules covering trading in "penny stocks."
Becoming subject to the "penny stock" rules would likely have a material
adverse effect on both the price and trading liquidity of the Company's
Common Stock.


If the Company were delisted from Nasdaq, it would likely be more difficult
to obtain additional funding. There can be no assurance that additional
funding which will generate sufficient cash to sustain operations can be
obtained on terms acceptable to the Company, if at all. The financial
statements do not include any adjustments to reflect the possible future
effects on the recoverability and classification of assets or the amounts
and classification of liabilities that may result from the possible
inability of the Company to continue as a going concern.

Item 2.  Management's Discussion and Analysis of Financial Condition
           and Results of Operations

Financial Condition

The Company's cash balance decreased from $157,008 to $16,203 during the
nine months ended September 30, 2000, as a result of operating losses in
excess of equity sales.  The Company sold an additional 650,000; 723,500;
and 500,000 shares of Common Stock to Kamkorp for $1.00 per share in the
quarters ended March 31, June 30 and September 2000 respectively (the
723,500 shares were assigned to Kamkorp Microelectronics SA); participants
in the Company's stock option plans exercised options for 139,721; 41,533
and 10,195 shares of Common Stock in the aggregate for a total consideration
of approximately $282,399; $72,054 and $17,617, and 280,830 and 2,950
warrants were exercised for a total consideration of approximately $730,604
and $7,561.  Subsequent to September 30, 2000 the Company was notified that
it was Kamkorp's intention to exercise an additional 500,000 shares of its
Common Stock to Kamkorp at $1.00 per share to provide needed working capital.

As of November 10, 2000 the Company has not met its obligations to pay
certain monthly operating costs including building rent, utilities,
corporate insurance premiums, worker's compensation insurance premiums,
payroll, employee health and life insurance premiums, payments to the
Internal Revenue Service for payroll taxes, 401(k) contributions and
employee expense reports.  Funding from Kamkorp, additional battery orders,
or other financing will be required to continue operations. There can be no
assurance that the Company will obtain such additional funding or battery
orders.   Inventories increased from $167,569 to $203,600.

Results of Operations:

Revenues.  The Company had battery sales of approximately $239,000 and
$750,000 for the three and nine months ended September 30, 2000 compared
to $152,000 and $427,000 for the three and nine months ended September 30,
1999.  Approximately 59% (three months) and 41% (nine months) of the year
2000 battery sales were to Frazer-Nash Research LTD and Electrosource
International LTD, collectively (Kamkorp Limited affiliated companies).
Approximately 26% (three months) and 23% (nine months) of the year 2000
battery sales were to Chrysler and Lockheed Martin, collectively.

Approximately 36% of the first nine months of 1999 battery sales were to
Lockheed Martin for use in Hybrid Electric Vehicles ("HEV") and Electric
Vehicles ("EV") they were producing for testing and evaluation.  The
majority of the remainder of the first nine months of 1999 battery sales
(30%) were to Chrysler Corporation.  These purchases were for testing and
evaluation of the Horizon battery in the EPIC Minivan Program.

The Company had project revenue of approximately $515,000 and $1,591,000
for the three and nine months ended September 30, 2000 compared to $632,000
and $1,097,000 for the three and nine months ended September 30, 1999.
Seventy-nine and sixty-two percent of the revenue generated in the first
nine months of 2000 and 1999, respectively, was under agreements with
Frazer-Nash Research Limited and Frazer-Nash Research, Inc. for the
continued research and development of the Company's battery technology.
The balance of the revenue generated in 2000 and 1999 was from cooperative
development and research agreements with the Defense Advanced Research
Projects Agency ("DARPA") and with the Department of Energy ("DOE") and
other smaller projects.  The DARPA programs are for various HEV and EV
applications.  The DOE program is for the development of core technology
for a lithium polymer material eventually to be used in batteries.

Costs and Expenses.  Total costs were nearly identical for the three and
nine months ended September 30, 2000 compared to the same periods in 1999.
Manufacturing costs have remained high as a percentage of battery sales,
primarily due to the lack of capital required to further automate the
production processes, materials being purchased in low volumes and the
fixed facility cost for leasing and maintaining the 88,000 square foot
manufacturing and office facility.  Management expects that manufacturing
costs can decrease as a percentage of battery sales as volume production
begins; however, additional capital will be required to significantly
reduce labor and raw material costs per battery.

Selling, general and administrative costs increased for the three and
nine months ended September 30, 2000 compared to the same period in 1999
primarily due to an increase in marketing and business related travel costs,
patent protection costs, and penalties, late charges and legal fees
resulting from past due accounts, financing activities and general corporate
counsel.

Research and development costs decreased for the three and nine months
ended September 30, 2000 compared to the same period in 1999 due to the
completion of the cooperative development and research agreements with the
Defense Advanced Research Projects Agency and with the Department of Energy,
and because the Company has been continuing research and development of
its technology with Frazer-Nash as discussed above.

Depreciation and amortization costs decreased for the three and nine months
ended September 30, 2000 compared to the same period in 1999 primarily due
to the full depreciation of various pieces of production equipment during
1999 and 2000 which remain in use.

Interest costs increased for the three and nine months ended September 30,
2000 compared to the same period in 1999 as the Company is incurring
significant interest charges on past due accounts.

Liquidity and Capital Resources. Liquidity and Capital Resources have been
discussed in detail under "NOTE F - LIQUIDITY" to the interim financial
statements, which is incorporated into this Item 2 by reference.

In addition to the disclosures under that Note, in December 1997, the Company
issued 299,304 shares of Common Stock to BDM as partial payment for past
obligations owed to BDM for occupancy related costs (which the Company has
accrued) and as prepayment under operating leases for manufacturing equipment
which are guaranteed by BDM.  The number of shares issued was determined
based on the fair market value of the shares at the date of the agreement
($2.56 per share).  When the shares are sold by BDM, the proceeds will be
used to satisfy these past and future obligations.  If the proceeds from
the sale of such shares are not sufficient to satisfy the obligations, the
Company will issue additional shares of Common Stock or pay cash to BDM to
make up the deficiency.  BDM has agreed to reduce amounts owed to it by
at least $1.00 per share or $299,304 for the shares issued.  BDM will
retain any overage from the sale of such shares in excess of the amounts
owed.  The Company's closing market price as reported by Nasdaq on
November 10, 2000 was $2.00.

In the first nine months of 2000, several vendors and service providers
have filed suits against the Company.  Payout agreements were worked out
with most of these vendors and service providers.  Currently, the Company
is in default on most of these payout agreements.  One of these agreements
was with the Hays County Tax Assessor-Collector for unpaid property taxes.
On July 31, 2000, the Company was served a Tax Search and Seizure Warrant
by Hays County for the collection of $195,359 in cash or the equivalent in
personal property owned by the Company.  Subsequently, the Company has paid
the total amount that was due to the Hays County Tax Assessor-Collector.
Another of these agreements was with an equipment leasing firm which
repossessed equipment since the Company was unable to continue making
payments.  The Company is making efforts to satisfy these old obligations
while continuing to produce limited quantities of batteries for its customers.

In June of 2000, the Company entered into two engagement letters with an
investment banking firm in connection with the Company's efforts to raise
additional capital.  Subsequently, negotiations with respect to a proposed
sale of securities terminated.  The investment banker has notified the
Company that it believes the Company owes the banking firm a total of
$200,000 under the break-up provision of the engagement letters.  The
Company disputes the claim.

From time to time the Company may publish forward-looking statements
relating to such matters as anticipated financial performance, business
prospects, technological development, new products, research and development
activities and similar matters. The Private Securities Litigation Reform Act
of 1995 provides a safe harbor for forward-looking statements. In order
to comply with the terms of the safe harbor, the Company notes that a
variety of factors could cause the Company's actual results and experience
to differ materially from the anticipated results or other expectations
expressed in the Company's forward-looking statements.  When used in this
discussion, the words "expects," "believes," "anticipates" and similar
expressions are intended to identify forward-looking statements. Such
statements are subject to certain risks and uncertainties which could cause
actual results to differ materially from those projected.  The risks and
uncertainties that may affect the operations, performance, development and
results of the Company's business primarily include completion of existing
battery orders, uncertainty as to receipt of additional orders, inability to
obtain additional debt or equity financing, continued willingness and
ability of Kamkorp and its affiliates to provide agreed upon financing,
currency controls and other uncertainties arising from Malaysia and Far
East economies upon which the Company is dependent for equity financing
and battery sales, delisting of the Company's Common Stock on Nasdaq,
delays in shipment or cancellation of orders, timing of future orders,
customer reorganization, fluctuations in demand primarily associated with
governmental mandates for the production of zero emission vehicles and the
ability to successfully commercialize the Horizon battery.  Readers are
cautioned not to place undue reliance on these forward-looking statements
which speak only as of the date hereof.  The Company undertakes no obligation
to republish revised forward-looking statements to reflect events or
circumstances after the date hereof or to reflect the occurrence of
unanticipated events.  Readers are also urged to carefully review and
consider the various disclosures made by the Company which attempt to advise
interested parties of the factors which affect the Company's business in this
report and in the Company's periodic reports on Forms 10-K and 8-K filed with
the Securities and Exchange Commission.



                         Part II - Other Information

Item 1.  Legal Proceedings

Item 2.  Changes in Securities

         The Company sold 500,000 shares of its Common Stock under the
         Agreement with Kamkorp Limited at a price of $1.00 per share
         in cash during the third quarter of 2000.  There were no
         underwriters involved in the sale, and no underwriting discounts
         or commissions.  The securities were sold pursuant to exemptions
         under Section 4(2) of the Securities Act of 1933 and Regulation D
         thereunder; the offering was to a single sophisticated, accredited
         investor in a transaction not involving public solicitation or
         advertising.

Item 3.  Defaults on Senior Securities
         None.

Item 4.  Submission of Matters to a Vote of Security Holders
         None.

Item 5.  Other Information
         Effective July 28, 2000, Ms. Audrey Dearing retired from her
         position as Corporate Secretary.
         Effective October 12, 2000, Mr. Don Perriello was appointed
         as Assistant Corporate Secretary.

Item 6.  Exhibits and Reports on Form 8-K
(a)      Exhibits
         10.   Consulting Agreement-A. Dearing
         27.   Financial Data Schedule.

(b)  Reports on Form 8-K.

     Reports on Form 8-K filed during the quarter ended September 30, 2000
     and up to the date of this filing on Form 10-Q were:

     None.


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereto duly authorized.


Date:  November 13, 2000
                                        ELECTROSOURCE, INC.



                                                  /s/
                                        Benny E. Jay
                                        President, Chief Executive Officer



                                                  /s/
                                        Don C. Perriello
                                        Vice President, Treasurer and
                                        Chief Accounting Officer




                             Washington, D.C.  20549




                                   EXHIBITS TO
                                    FORM 10-Q


               QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                        THE SECURITIES EXCHANGE ACT OF 1934


               For the quarter ended              Commission File
               September 30, 2000                 Number 0-16323






                              ELECTROSOURCE, INC.
          (Exact name of Registrant as specified in its charter)

               Delaware                         742466304
(State or other jurisdiction of       (I.R.S. Employer Identification No.)
incorporation or organization)

2809 Interstate 35 South, San Marcos, Texas              78666
 (Address of principal executive offices)              (Zip Code)

          Registrant's telephone number, including area code:
                              (512) 753-6500

       Securities registered pursuant to Section 12(b) of the Act:
                                   None

       Securities registered pursuant to Section 12(g) of the Act:

               Common Stock, par value $1.00 per share
                              (Title of Class)



INDEX TO EXHIBITS


No.                      Description                         Page

10       Consulting Agreement-A. Dearing                      16
27       Financial Data Schedule                              27