OPTION AGREEMENT

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

   This Option Agreement (the "Option") is made and entered into
as  of  October 27, 1999, by and between Electrosource, Inc.,  a
Delaware  corporation (the "Company"), and  Kamkorp  Limited,  a
United Kingdom Company (the "Purchaser").

  The parties to this Option therefore agree as follows:

   1.  Grant of Option. This certifies that, for value received,
Purchaser, as the holder of this Option, is entitled to purchase
from  the  Company up to three million (3,000,000)  shares  (the
"Option Shares") of the Company's Common Stock, $1.00 par  value
("Common Stock"), at an exercise price of One Dollar ($US  1.00)
per share, subject to the terms and conditions contained herein.

  2. Exercise of Option.

   (a)  This  Option  may be exercised  by  the  Purchaser  as
follows:

       (i) As to two million (2,000,000) Option Shares, from  the
date hereof until 5:00 PM, Austin, Texas time on April 27, 2000;

       (ii)  As to five hundred thousand (500,000) Option Shares,
from  the  date hereof until 5:00 PM, Austin, Texas time  on  on
July 27, 2000; and

       (iii) As to five hundred thousand (500,000) Option Shares,
from  the  date hereof until 5:00 PM, Austin, Texas time  on  on
October 27, 2000.

     Each partial exercise shall be applied against the earliest
expiring tranche of options that remain exercisable at the  date
of the contemplated exercise.

   (b)    In order to exercise this Option, the Purchaser  shall
give  written notice of exercise at the principal office of  the
Company located at 2809 Interstate 35 South, San Marcos,  Texas,
and tender to the Company by certified or cashiers check or bank
wire transfer of funds a sum equal to the Exercise Price for the
shares of Common Stock to be purchased.

   (c)   As promptly as practicable, after receipt of such notice
and the tender of the Exercise Price for the Option Shares to be
purchased,  the  Company shall issue at its expense,  and  shall
deliver  to  The Purchaser at its principal office, or  at  such
other  place  as Purchaser reasonably may request, a certificate
or  certificates  for  the  number of  shares  of  Common  Stock
issuable  upon the exercise in question. Such exercise shall  be
deemed  to have been effected immediately prior to the close  of
business on the date (the "Exercise Date") on which the  Company
shall  have received such notice and the tender of the aggregate
Exercise  Price  for the Option Shares, and  at  such  time  the
Purchaser shall be deemed to have become the holder of record of
the shares represented thereby.

   (d)    The  Company  shall bear all sales, use,  documentary,
stamp  and other transfer taxes, if any, arising out  of  or  by
reason   of  the  transactions  contemplated  by  this   Option,
including without limitation the issuance of the Option and  the
issuance of Common Stock on exercise of the Option.

  3. No Rights as Stockholder. This Option shall not entitle the
Purchaser  to any of the rights of a stockholder of the  Company
prior to the exercise hereof.

   4. Representations of the Company. The Company represents and
warrants  to  The  Purchaser as of the date of  this  Option  as
follows:

   (a)    The  Company is a corporation duly organized,  validly
existing and in good standing under the laws of Delaware and  is
qualified  to  do business in every jurisdiction  in  which  its
ownership  of  property or conduct of business  requires  it  to
qualify.  The  Company  has all requisite  corporate  power  and
authority  and all material licenses, permits and authorizations
necessary  to  own and operate its properties, to carry  on  its
business  as  now  conducted and as  currently  proposed  to  be
conducted and to carry out the transactions contemplated by this
Option.

   (b)    The execution, delivery and performance of this Option
have   been   duly  authorized  by  the  Company.  This   Option
constitutes  a  legal,  valid  and  binding  obligation  of  the
Company, enforceable against the Company in accordance with  its
terms,  except as such enforcement may be limited by bankruptcy,
insolvency,   moratorium   or  other  similar   laws   affecting
creditors'  rights  generally or by  equitable  principles.  The
execution,  delivery  and performance by  the  Company  of  this
Option,  the  issuance  of Common Stock upon  exercise  of  this
Option,   and  the  fulfillment  of  and  compliance  with   the
respective terms hereof and thereof by the Company, do  not  and
will  not (i) conflict with or result in a breach of the  terms,
conditions  or  provisions of, (ii) constitute a default  under,
(iii)  result  in  the creation of any lien, security  interest,
charge  or  encumbrance upon the Company's or  any  subsidiary's
capital  stock or assets pursuant to, (iv) give any third  party
the  right to accelerate any obligation under, (v) result  in  a
violation  of,  or  (vi)  require  any  authorization,  consent,
approval, exemption or other action by or notice to any court or
administrative or governmental body pursuant to, the Certificate
of  Incorporation or Bylaws of the Company, or any law, statute,
rule  or  regulation  to which the Company is  subject,  or  any
agreement,  instrument, order, judgment or decree to  which  the
Company is subject.

   (c)    All  shares of Common Stock issuable upon exercise  of
this Option will, when issued, be duly and validly issued, fully
paid  and  nonassessable  and free from  all  taxes,  liens  and
charges.

   5.  Amendment. This Option may be amended only by  a  written
instrument executed by the Company and the Purchaser

   6.  Assignment.  This  Option may not be  sold,  transferred,
hypothecated or assigned without the express written consent  of
the Company.

   7.  Governing  Law;  Venue.  All  questions  concerning  the
construction, validity and interpretations of this  Option  will
be  governed by the internal laws, and not the law of conflicts,
of  the State of Delaware. Each party waives the right to demand
a  jury  in  any action, suit or proceeding arising pursuant  to
this Option.

   8.  Termination;  Survival. This Option shall  terminate  and
expire at 5:00 p.m., Austin, Texas time, on October 27, 2000, if
not exercised on or prior to such time.

   IN  WITNESS WHEREOF, the Company executed and delivered  this
Option as of October  27, 1999.

ELECTROSOURCE, INC.



By:       /s/ Benny Jay
   Benny Jay, President and CEO



ACCEPTED:

KAMKORP, LTD.


By:      /s/ Roger Musson
      Roger Musson