ELECTROSOURCE, INC.

                      CONSULTING AGREEMENT

                            96-C-093

      THIS CONSULTING AGREEMENT (the "Agreement"), made effective
the  1st  day of September, 1996, is between ELECTROSOURCE,  INC.
("Electrosource"), a Delaware corporation, having  its  principal
offices at 2809 HI 35 South, San Marcos, Texas, 78666, U.S.A. and
Richard  J. Blanyer (Consultant) having his place of business  at
Route 2, Box 171AC, Smithville, Texas 78957.

                      W I T N E S S E T H:

      WHEREAS,  Consultant possesses knowledge and experience  in
battery technology, and related fields; and

     WHEREAS, Electrosource desires the assistance of Consultant,

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

1.    Term

      1.1    Electrosource  hereby  engages   Consultant   as
             independent contractor for a term commencing  on
             September 1, 1996 and ending on December 31, 1997.

      1.2    Electrosource shall have the right to extend this
             Agreement by written modification at the same  rate  of
             compensation  provided  for in  Section  3  by  written
             notice  not less than two (2) weeks prior to  the  last
             day  of the initial term of this Agreement or Amendment
             to same.

      1.3    Either party may cancel this Agreement at its sole
             discretion  with ten (10) days written  notice  to  the
             other.   Electrosource's sole  liability  will  be  for
             hours  worked at the rate specified, and for reasonable
             travel or business expenses incurred in accordance with
             Section 4.

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

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

2.    Duties

      Consultant  shall  use  its  best  efforts  on   behalf   of
      Electrosource  to assist Electrosource with respect  to  all
      matters  pertaining  to  battery  development,  and  related
      matters.   Consultant shall not, during  the  term  of  this
      Agreement,  accept  any other engagement as  consultant,  or
      enter  into  any  employment relationship, with  respect  to
      which  any portion of his duties would entail assisting  any
      other  entity in the field of battery development or battery
      technology.  The Consultant agrees not to perform work for a
      competitor  of  Electrosource,  during  the  term  of   this
      Consulting Agreement.  Consultant shall provide two days  of
      time per week to perform such advising and consulting duties
      as  may  be  assigned from time to time by Electrosource  by
      William  F.  Griffin, the Executive Vice President/Marketing
      or  such other person as is designated from time to time  by
      Electrosource.  Such consulting services shall  be  provided
      at  the  offices of Electrosource.  Invoices shall  be  paid
      within 15 days of receipt.

3.    Compensation

      As  full  compensation  for  the services  which  Consultant
      renders  to Electrosource under and in accordance  with  the
      terms   of  this  Agreement,  Electrosource  will   pay   to
      Consultant  $450.00  per  day for two  (2)  days  per  week.
      Invoices  Consultant submits to Electrosource  for  services
      rendered   shall   include  the  heading   "a   professional
      consulting firm or individual."

4.    Expenses

      Electrosource shall reimburse Consultant for all proper  and
      reasonable expenses incurred by him pursuant to Consultant's
      duties hereunder to the extent such expenses are approved in
      writing  in  advance by Electrosource.   Such  expenses  may
      include  necessary  actual expenses  of  out-of-town  travel
      costs    (e.i.   outside   of   Austin   or   San   Marcos),
      communications,  hotel accommodations, meals  and  the  like
      provided  that  Consultant shall keep receipts  and  provide
      Electrosource  an  accurate and complete accounting  of  all
      such  expenses so incurred, and shall obtain Electrosource's
      prior  written  consent to any such expenses.  Reimbursement
      of  expenses will be issued within ten (10) days of  receipt
      of complete accounting, with receipts, of same.

5.    Confidential and Proprietary Information

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

      5.2   Consultant  shall  restrict  the  disclosure   of
            Electrosource's    confidential   and/or    proprietary
            technical  and  business information to  those  of  his
            employees  who  need to know the same for  purposes  of
            carrying  out  this contract.  Consultant shall  advise
            all  such  employees  of  Consultant's  obligations  of
            confidentiality under this Agreement.

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

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

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

      6.1   Except  in  connection  with  authorized  visits,
            classified  materials shall not  be  possessed  by  the
            Consultant  off  the  premises  of  the  Company.   The
            Company  shall not furnish classified material  to  the
            Consultant  at any other location than the premises  of
            the  Company and performance of the consulting services
            by the Consultant shall be accomplished at the premises
            of  the  Company; and classification guidance  will  be
            provided by the Company.

      6.2   The Consultant and his certifying employees shall
            not  disclose  classified information  to  unauthorized
            persons.

      6.3   Electrosource shall brief the Consultant as to the
            security  controls  and procedures  applicable  to  the
            Consultant's performance.

7.    Works of Authorship and Inventions

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

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

8.   Assignment and Subcontracting

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

9.   No Conflicts

     9.1  Consultant represents and warrants that:

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

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

     9.2   Consultant  shall advise Electrosource's  General
           Counsel of all clients under similar agreement  to  him
           within five (5) days after execution of this Agreement.
           Consultant shall notify Electrosource within five  days
           of any subsequent contract for additional clients.

     9.3   Notwithstanding  any  other  provision  of  this
           Agreement,  Electrosource  shall  have  the  right   to
           terminate  this  Agreement if, in Electrosource's  sole
           opinion,  a  conflict of interest rises  or  may  arise
           between  Consultant's representation  of  Electrosource
           and  its  representation of its  other  clients.   Such
           termination shall become effective upon five  (5)  days
           written notification by Electrosource.

10.  Independent Contractor

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

11.  Notice

     A  notice  communicated to Electrosource shall  be  sent  to
     James   M.   Rosel,   Vice   President,   General   Counsel,
     Electrosource,  Inc., 2809 IN 35 South,  San  Marcos,  Texas
     78666, or to such other place or places as Electrosource  by
     notice  in  writing shall specify.  Any notice to be  served
     shall  be  sent  to  Richard Blanyer at Rt.  2,  Box  171AC,
     Smithville, Texas  78957. Any notice to be served  shall  be
     deemed  to  be  served if the same be sent by registered  or
     certified mail through the United States mail, addressed  to
     the  party on which service is to be effected at the address
     stated  in the immediately preceding sentences and shall  be
     deemed  to  have been received on the day indicated  on  the
     return receipt relating thereto.

12.  Binding Agreement

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

13.  Modification

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

14.  Construction

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

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

ELECTROSOURCE, INC.                CONSULTANT

By:        /s/                     By:       /s/
   James M. Rosel                     Richard J. Blanyer
   Vice President, General Counsel

Date:   10-3-1996                  Date:   01 Oct 96

                                   SOCIAL SECURITY NUMBER OR
                                   FEDERAL IDENTIFICATION NUMBER:

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