----

**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**Washington,      D.C. 20549**

**FORM      10-Q**

**x**
**      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE**

**SECURITIES      EXCHANGE ACT OF 1934**

**For      the quarterly period ended July 1, 2006**

**o**
**      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE**

**SECURITIES      EXCHANGE ACT OF 1934**

**TECH/OPS      SEVCON, INC.**

*(Exact      name of registrant as specified in its charter)*

| **Delaware**                                                                                   | **04-2985631**                                        |
|------------------------------------------------------------------------------------------------|-------------------------------------------------------|
| *(State                or other jurisdiction of incorporation or                organization)* | *(I.R.S.                Employer Identification No.)* |

**155      Northboro Road, Southborough, Massachusetts, 01772**

*(Address      of principal executive offices and zip code)*

**(508)      281 5510**

*(Registrant's      telephone number, including area code)*

**x**
**o**

**o**
**o**
** **
** **
**x**

**o**
**x**

| **Class**                                       | **Outstanding                at August 9, 2006** |
|-------------------------------------------------|--------------------------------------------------|
| **Common                stock, par value $.10** | **3,211,051**                                    |

----

**TECH****/OPS,      SEVCON LTD**

**FORM      10-Q**

**FOR      THE QUARTER ENDED July 1, 2006**

**INDEX**

| **PART                I -FINANCIAL INFORMATION**                                                                                                         | **PAGE** |
|----------------------------------------------------------------------------------------------------------------------------------------------------------|----------|
| **Item                1** **Financial                Statements**                                                                                   | 3        |
| Consolidated                Balance Sheets                                                                                                               | 3        |
| Consolidated                Statements of Income                                                                                                         | 4        |
| Consolidated                Statements of Comprehensive Income                                                                                           | 4        |
| Consolidated                Statements of Cash Flows                                                                                                     | 5        |
| Notes                to Consolidated Financial Statements                                                                                                | 6        |
| **Item                2** Management’s                Discussion and Analysis of Financial Condition and Results of                Operations | 12       |
| **Item                3** Quantitative                and Qualitative Disclosures about Market Risk                                                 | 20       |
| **I****tem                4** Controls                and Procedures                                                                                | 21       |
| **PART                II - OTHER INFORMATION**                                                                                                           | 22       |
| **Item                4** Submission                of Matters to a Vote of Security Holder**s**                                                    | 22       |
| **Item                6** Exhibits                                                                                                                  | 22       |
| **SIGNATURES**                                                                                                                                           | 22       |
| **INDEX                OF EXHIBITS**                                                                                                                     | 22       |

----

**ITEM      1****.      FINANCIAL STATEMENTS**

**CONSOLIDATED****BALANCE      SHEETS**

| (in                thousands of dollars except per share data)                                                                                                                                                             |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                       |   |   | **July                1,****2006**  |   |   | September                30,2005 |   |
|                                                                                                                                                                                                                  |   |   | **(unaudited)**  |   |   | (derived                from audited statements | ) |
| **ASSETS**                                                                                                                                                                                                                 |   |   |   |   |   |   |   |
| **Current                assets:**                                                                                                                                                                                         |   |   |   |   |   |   |   |
| Cash                and cash equivalents                                                                                                                                                                                   |   | **$** | **330** |   | $ | 1,130 |   |
| Receivables,                net of allowances for doubtful accounts of $ 161 at July 1, 2006                and                $144 at September 30, 2005                                                                  |   |   | **6,819** |   |   | 6,193 |   |
| Inventories                                                                                                                                                                                                                |   |   | **5,523** |   |   | 3,737 |   |
| Prepaid                expenses and other current assets                                                                                                                                                                   |   |   | **1,195** |   |   | 915 |   |
| Total                current assets                                                                                                                                                                                        |   |   | **13,867** |   |   | 11,975 |   |
| **Property,                plant and equipment:**                                                                                                                                                                          |   |   |   |   |   |   |   |
| At                cost                                                                                                                                                                                                     |   |   | **10,308** |   |   | 9,593 |   |
| Less:                accumulated depreciation and amortization                                                                                                                                                             |   |   | **7,130** |   |   | 6,557 |   |
| Net                property, plant and equipment                                                                                                                                                                           |   |   | **3,178** |   |   | 3,036 |   |
| Goodwill                                                                                                                                                                                                                   |   |   | **1,435** |   |   | 1,435 |   |
| **Total                assets**                                                                                                                                                                                            |   | **$** | **18,480** |   | $ | 16,446 |   |
|                                                                                                                                                                                                                       |   |   |   |   |   |   |   |
| **LIABILITIES                AND STOCKHOLDERS’ INVESTMENT**                                                                                                                                                          |   |   |   |   |   |   |   |
| **Current                liabilities:**                                                                                                                                                                                    |   |   |   |   |   |   |   |
| Due                to banks                                                                                                                                                                                                |   | **$** | **426** |   | $ | - |   |
| Accounts                payable                                                                                                                                                                                            |   |   | **2,840** |   |   | 2,599 |   |
| Dividend                payable                                                                                                                                                                                            |   |   | **96** |   |   | 95 |   |
| Accrued                expenses                                                                                                                                                                                            |   |   | **2,924** |   |   | 2,685 |   |
| Accrued                and deferred taxes on income                                                                                                                                                                        |   |   | **427** |   |   | 445 |   |
| Total                current liabilities                                                                                                                                                                                   |   |   | **6,713** |   |   | 5,824 |   |
| Deferred                taxes on income                                                                                                                                                                                    |   |   | **35** |   |   | 33 |   |
| Commitments                and contingencies                                                                                                                                                                               |   |   |   |   |   |   |   |
| **S****tockholder                equity**                                                                                                                                                                                  |   |   |   |   |   |   |   |
| Preferred                stock, par value $.10 per share - authorized - 1,000,000                shares;outstanding                - none                                                                                  |   |   | **-** |   |   | - |   |
| Common                stock, par value $.10 per share - authorized - 8,000,000                shares;outstanding                3,211,051 shares at July 1, 2006 and 3,172,051 shares at September                30, 2005 |   |   | **321** |   |   | 317 |   |
| Premium                paid in on common stock                                                                                                                                                                             |   |   | **4,269** |   |   | 4,310 |   |
| Retained                earnings                                                                                                                                                                                           |   |   | **6,975** |   |   | 6,394 |   |
| Unearned                compensation on restricted stock                                                                                                                                                                   |   |   | **-** |   |   | (180 | ) |
| Cumulative                other comprehensive loss                                                                                                                                                                         |   |   | **167** |   |   | (252 | ) |
| Total                stockholder equity                                                                                                                                                                                    |   |   | **11,732** |   |   | 10,589 |   |
| **Total                liabilities and stockholder equity**                                                                                                                                                                |   | **$** | **18,480** |   | $ | 16,446 |   |
|  The                accompanying notes are an integral part of these consolidated financial                statements                                                                                                 |

----

**CONSOLIDATED      STATEMENTS OF INCOME**

| (in                thousands except per share data) |   |
|-----------------------------------------------------|--------|
|                                                |   | Three                months ended  | Nine                months ended |
|                                                     |   |   | **July                1,****2006**  |   |   | July                2,2005 |   |   | **July                1,****2006** |   |   | July                2,2005 |   |
| Net                sales                            |   | **$** | **9,313** |   | $ | 8,453 |   | **$** | **25,696** |   | $ | 24,089 |   |
| Costs                and expenses:                  |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cost                of sales                        |   |   | **5,761** |   |   | 5,293 |   |   | **15,780** |   |   | 14,961 |   |
| Selling,                research and administrative |   |   | **2,968** |   |   | 2,779 |   |   | **8,526** |   |   | 8,442 |   |
|                                                |   |   | **8,729** |   |   | 8,072 |   |   | **24,306** |   |   | 23,403 |   |
| Operating                income                     |   |   | **584** |   |   | 381 |   |   | **1,390** |   |   | 686 |   |
| Interest                expense                     |   |   | **(13** | **)** |   | (13 | ) |   | **(48** | **)** |   | (41 | ) |
| Interest                income                      |   |   | **1** |   |   | 1 |   |   | **3** |   |   | 3 |   |
| Foreign                currency gain or (loss)      |   |   | **(8** | **)** |   | (36 | ) |   | **(10** | **)** |   | (20 | ) |
| Income                before income taxes           |   |   | **564** |   |   | 333 |   |   | **1,335** |   |   | 628 |   |
| Income                taxes                         |   |   | **(195** | **)** |   | (117 | ) |   | **(464** | **)** |   | (220 | ) |
| Net                income                           |   | **$** | **369** |   | $ | 216 |   | **$** | **871** |   | $ | 408 |   |
| Basic                income per share               |   | **$** | **.12** |   | $ | .07 |   | **$** | **.28** |   | $ | .13 |   |
| Fully                diluted income per share       |   | **$** | **.12** |   | $ | .07 |   | **$** | **.28** |   | $ | .13 |   |

**CONSOLIDATED****STATEMENTS OF COMPREHENSIVE INCOME**

|                                                            |   | (in                thousands of dollars) |                                     |
|-----------------------------------------------------------------|--------|------------------------------------------|------------------------------------------|
|                                                            |   | Three                months ended   | Nine                months ended         |
|                                                            |   |                                     | **July                1,****2006**  |   |   | July                2,2005 |   |   | **July                1,****2006** |   |   | July                2,2005 |   |
| Net                income                                       |   | **$**                                    | **369**                                  |   | $ | 216 |   | **$** | **871** |   | $ | 408 |   |
| Foreign                currency translation adjustment          |   |                                     | **529**                                  |   |   | (568 | ) |   | **418** |   |   | (228 | ) |
| Changes                in fair market value of cash flow hedges |   |                                     | **14**                                   |   |   | (3 | ) |   | **1** |   |   | (18 | ) |
| Comprehensive                income (loss)                      |   | **$**                                    | **912**                                  |   | $ | (355 | ) | **$** | **1,290** |   | $ | 162 |   |

|  The                accompanying notes are an integral part of these consolidated financial                statements. |
|-----------------------------------------------------------------------------------------------------------------------------|

----

**CONSOLIDATED****STATEMENTS OF CASH FLOWS**

|                                                                                                                  |   | (in                thousands of dollars) |                                     |
|-----------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------|------------------------------------------|
|                                                                                                                  |   | Nine                months ended    |
|                                                                                                                  |   |                                     | **July                1,****2006**  |   |   | July                2,2005 |   |
| Cash                flow from operating activities:                                                                   |   |                                     |                                     |   |   |   |   |
| Net                income                                                                                             |   | **$**                                    | **871**                                  |   | $ | 408 |   |
| Adjustments                to reconcile net income to net cash from operating                activities:              |   |                                     |                                     |   |   |   |   |
| Depreciation                and amortization                                                                          |   |                                     | **469**                                  |   |   | 503 |   |
| Stock-based                compensation                                                                               |   |                                     | **143**                                  |   |   | 56 |   |
| Deferred                tax benefit                                                                                   |   |                                     | **2**                                    |   |   | (1 | ) |
| Increase                (decrease) in cash resulting from changes in operating assets and                liabilities: |   |                                     |                                     |   |   |   |   |
| Receivables                                                                                                           |   |                                     | **(626**                                 | **)** |   | (171 | ) |
| Inventories                                                                                                           |   |                                     | **(1,786**                               | **)** |   | 371 |   |
| Prepaid                expenses and other current assets                                                              |   |                                     | **(281**                                 | **)** |   | (270 | ) |
| Accounts                payable                                                                                       |   |                                     | **241**                                  |   |   | (468 | ) |
| Accrued                expenses                                                                                       |   |                                     | **239**                                  |   |   | 248 |   |
| Accrued                and deferred taxes on income                                                                   |   |                                     | **(18**                                  | **)** |   | 179 |   |
| Net                cash generated from (used by) operating activities                                                 |   |                                     | **(746**                                 | **)** |   | 855 |   |
| Cash                flow used by investing activities:                                                                |   |                                     |                                     |   |   |   |   |
| Acquisition                of property, plant and equipment                                                           |   |                                     | **(462**                                 | **)** |   | (345 | ) |
| Net                cash used by investing activities                                                                  |   |                                     | **(462**                                 | **)** |   | (345 | ) |
| Cash                flow used by financing activities:                                                                |   |                                     |                                     |   |   |   |   |
| Dividends                paid                                                                                         |   |                                     | **(287**                                 | **)** |   | (284 | ) |
| Exercise                of stock options                                                                              |   |                                     | **9**                                    |   |   | - |   |
| Short-term                bank borrowings                                                                             |   |                                     | **426**                                  |   |   | - |   |
| Net                cash generated from (used by) financing activities                                                 |   |                                     | **148**                                  |   |   | (284 | ) |
| Effect                of exchange rate changes on cash                                                                |   |                                     | **260**                                  |   |   | (257 | ) |
| Net                decrease in cash                                                                                   |   |                                     | **(800**                                 | **)** |   | (31 | ) |
| Beginning                balance - cash and cash equivalents                                                          |   |                                     | **1,130**                                |   |   | 905 |   |
| Ending                balance - cash and cash equivalents                                                             |   | **$**                                    | **330**                                  |   | $ | 874 |   |
| Supplemental                disclosure of cash flow information:                                                      |   |                                     |                                     |   |   |   |   |
| Cash                paid for income taxes                                                                             |   | **$**                                    | **619**                                  |   | $ | 117 |   |
| Cash                paid for interest                                                                                 |   | **$**                                    | **48**                                   |   | $ | 41 |   |
| Supplemental                disclosure of non-cash financing activity:                                                |   |                                     |                                     |   |   |   |   |
| Dividend                declared                                                                                      |   | **$**                                    | **96**                                   |   | $ | 95 |   |

|  The                accompanying notes are an integral part of these consolidated financial                statements. |
|-----------------------------------------------------------------------------------------------------------------------------|

----

**TECH****/OPS      SEVCON, INC**.

**Notes      to Consolidated Financial Statements - July 1, 2006**

| **(1)** | **Basis                of Presentation** |
|---------|------------------------------------------|

**(2)    **
**New      Accounting Pronouncements **

**(3)    **
**Stock-Based      Compensation Plans**

----

| (in                thousands of dollars except per share data)                                                                       |   |
|--------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                 |   |   | Three                months ended |   |   | Nine                months ended |   |
|                                                                                                                                 |   |   | July                2,2005  |   |   | July                2,2005 |   |
| Net                income - As reported                                                                                              |   | $ | 216 |   | $ | 408 |   |
| Stock-based                compensation expense determined under fair value method for all option                awards (net of tax) |   |   | (11 | ) |   | (39 | ) |
| Net                income - Pro forma                                                                                                |   | $ | 205 |   | $ | 369 |   |
| Basic                net income per share - As reported                                                                              |   | $ | .07 |   | $ | .13 |   |
| Basic                net income per share - Pro forma                                                                                |   | $ | .07 |   | $ | .12 |   |
| Diluted                net income per share - As reported                                                                            |   | $ | .07 |   | $ | .13 |   |
| Diluted                net income per share - Pro forma                                                                              |   | $ | .07 |   | $ | .12 |   |

|                                   |   |     |    |   |   |
|----------------------------------------|--------|----------|---------|--------|--------|
|                                   |   | **2006** |    | 2005   |   |
| Risk-free                interest rate |   |     | **N/A** |   |   | N/A |   |
| Expected                dividend yield |   |     | **N/A** |   |   | N/A |   |
| Expected                life (years)   |   |     | **N/A** |   |   | N/A |   |
| Expected                volatility     |   |     | **N/A** |   |   | N/A |   |

|                                             |   |   |                                    |   |   |                                                                         |   |   |                                                          |   |   |                                                    |   |
|--------------------------------------------------|--------|--------|-----------------------------------------|--------|--------|------------------------------------------------------------------------------|--------|--------|---------------------------------------------------------------|--------|--------|---------------------------------------------------------|--------|
|                              |   |   | Options#                of shares  |   |   | Weighted                average                Exercise                Price |   |   | Weightedaverageremainingcontractuallife                (years | )      |   | Aggregate                Intrinsic                Value |   |
| Outstanding                at September 30, 2005 |   |   | 182,000                                 |   | $      | 9.26                                                                         |   |   |                                                          |   |   |                                                    |   |
| Granted                                          |   |   | -                                       |   |   |                                                                         |   |   |                                                          |   |   |                                                    |   |
| Exercised                                        |   |   | (2,000                                  | )      | $      | 4.37                                                                         |   |   |                                                          |   |   |                                                    |   |
| Cancelled                                        |   |   | (8,000                                  | )      | $      | 8.46                                                                         |   |   |                                                          |   |   |                                                    |   |
| Outstanding                at July 1, 2006       |   |   | 172,000                                 |   | $      | 9.35                                                                         |   |   | 3                years                                        |   | $      | 132,000                                                 |   |
| Exercisable                at July 1, 2006       |   |   | 118,400                                 |   | $      | 10.41                                                                        |   |   | 3                years                                        |   | $      | 66,000                                                  |   |

----

|                                                       |   |                                                |    |                                                  |   |
|------------------------------------------------------------|--------|-----------------------------------------------------|---------|-------------------------------------------------------|--------|
|                                                       |   | Number                of shares of Restricted Stock |    | Weighted                Average Grant-Date Fair Value |   |
| Non-vested                balance as of September 30, 2005 |   |                                                | 47,000  |                                                  | $      | 6.18 |   |
| Granted                                                    |   |                                                | 37,000  |                                                  | $      | 5.58 |   |
| Vested                                                     |   |                                                | (19,000 | )                                                     | $      | 6.64 |   |
| Forfeited                                                  |   |                                                | -       |                                                  |   | N/A |   |
| Non-vested                balance as of July 1, 2006       |   |                                                | 65,000  |                                                  | $      | 5.70 |   |

----

|                                                                                               |   | (in                thousands of dollars) |                               |
|----------------------------------------------------------------------------------------------------|--------|------------------------------------------|------------------------------------|
|                                                                                               |   | Three                Months ended   | Nine                Months ended   |
|                                                                                               |   |                                     | **July                1,****2006** |   |   | July                2, 2005 |   |   | **July                1,****2006** |   |   | July                2, 2005 |   |
| Stock                option expense under SFAS # 123R *                                            |   | **$**                                    | **13**                             |   | $ | - |   | **$** | **36** |   | $ | - |   |
| Restricted                stock grants:                                                            |   |                                     |                               |   |   |   |   |   |   |   |   |   |   |
| Employees                                                                                          |   |                                     | **14**                             |   |   | 9 |   |   | **41** |   |   | 21 |   |
| Non-employee                directors                                                              |   |                                     | **17**                             |   |   | 14 |   |   | **57** |   |   | 35 |   |
| Total                stock based compensation expense                                              |   | **$**                                    | **44**                             |   | $ | 23 |   | **$** | **134** |   | $ | 56 |   |
| *                Pro-forma expense disclosed for options accounted for under                APB#25 |   | **$**                                    | **N/A**                            |   | $ | 11 |   | **$** | **N/A** |   | $ | 39 |   |

**(4)    **
**Cash      Dividends**

**(5)    **
**Calculation      of Earnings Per Share and Weighted Average Shares      Outstanding**

|                                                                                                                     |   | (in                thousands except per share data) |                               |
|--------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------|------------------------------------|
|                                                                                                                     |   | Three                Months ended              | Nine                Months ended   |
|                                                                                                                     |   |                                                | **July                1,****2006** |   |   | July                2,2005 |   |   | **July                1,****2006** |   |   | July                2,2005 |   |
| Net                income                                                                                                |   | **$**                                               | **369**                            |   | $ | 216 |   | **$** | **871** |   | $ | 408 |   |
| Weighted                average shares outstanding - basic                                                               |   |                                                | **3,144**                          |   |   | 3,125 |   |   | **3,134** |   |   | 3,125 |   |
| Basic                income per share                                                                                    |   | **$**                                               | **.12**                            |   | $ | .07 |   | **$** | **.28** |   | $ | .13 |   |
| Common                stock equivalents                                                                                  |   |                                                | **30**                             |   |   | 24 |   |   | **22** |   |   | 26 |   |
| Weighted                average shares outstanding - diluted                                                             |   |                                                | **3,174**                          |   |   | 3,149 |   |   | **3,156** |   |   | 3,151 |   |
| Diluted                income per share                                                                                  |   | **$**                                               | **.12**                            |   | $ | .07 |   | **$** | **.28** |   | $ | .13 |   |
| No                of options that are anti-dilutive excluded from calculation of common                stock equivalents |   |                                                | **105**                            |   |   | 106 |   |   | **105** |   |   | 109 |   |

**(6)    **
**Segment      information**

----

|                                           |   | (in                thousands of dollars)                 |                   |
|------------------------------------------------|--------|----------------------------------------------------------|------------------------|
|                                           |   | **Three                months ended July 1, 2006**  |
|                                           |   |                                                     | **Contro****ls**  |   |   | **Capacitors** |   |   | **Corporate** |   |   | **Total** |   |
| **Sales                to external customers** |   | **$**                                                    | **8,901**              |   | **$** | **412** |   | **$** | **-** |   | **$** | **9,313** |   |
| **Inter-segment                revenues**      |   |                                                     | **-**                  |   |   | **18** |   |   | **-** |   |   | **18** |   |
| **Operating                income**            |   |                                                     | **726**                |   |   | **(25** | **)** |   | **(117** | **)** |   | **584** |   |
| **Identifiable                assets**         |   |                                                     | **16,992**             |   |   | **906** |   |   | **582** |   |   | **18,480** |   |

|                                       |   | Three                months ended July 2, 2005 |           |
|--------------------------------------------|--------|------------------------------------------------|----------------|
|                                       |   |                                           | Controls  |   |   | Capacitors |   |   | Corporate |   |   | Total |   |
| Sales                to external customers |   | $                                              | 8,005          |   | $ | 448 |   | $ | - |   | $ | 8,453 |   |
| Inter-segment                revenues      |   |                                           | -              |   |   | 40 |   |   | - |   |   | 40 |   |
| Operating                income            |   |                                           | 427            |   |   | 56 |   |   | (102 | ) |   | 381 |   |
| Identifiable                assets         |   |                                           | 14,796         |   |   | 1,010 |   |   | 694 |   |   | 16,500 |   |

|                                             |   | **Nine                months ended July 1, 2006** |                   |
|--------------------------------------------------|--------|---------------------------------------------------|------------------------|
|                                                  |   |                                              | **Contro****ls**  |   |   | **Capacitors** |   |   | **Corporate** |   |   | **Total** |   |
| **Sales                to external customers**   |   | **$**                                             | **24,503**             |   | **$** | **1,193** |   | **$** | **-** |   | **$** | **25,696** |   |
| **Inter-segment                revenues**        |   |                                              | **-**                  |   |   | **53** |   |   | **-** |   |   | **53** |   |
| **Operating                income (loss)**       |   |                                              | **1,679**              |   |   | **(43** | **)** |   | **(246** | **)** |   | **1,390** |   |
| **Depreciation                and amortization** |   |                                              | **427**                |   |   | **42** |   |   | **-** |   |   | **469** |   |
| **Identifiable                assets**           |   |                                              | **16,992**             |   |   | **906** |   |   | **582** |   |   | **18,480** |   |
| **Capital                expenditures**          |   |                                              | **396**                |   |   | **24** |   |   | **-** |   |   | **420** |   |

|                                         |   | Nine                months ended July 2, 2005 |           |
|----------------------------------------------|--------|-----------------------------------------------|----------------|
|                                         |   |                                          | Controls  |   |   | Capacitors |   |   | Corporate |   |   | Total |   |
| Sales                to external customers   |   | $                                             | 22,865         |   | $ | 1,224 |   | $ | - |   | $ | 24,089 |   |
| Inter-segment                revenues        |   |                                          | -              |   |   | 189 |   |   | - |   |   | 189 |   |
| Operating                income (loss)       |   |                                          | 920            |   |   | 36 |   |   | (270 | ) |   | 686 |   |
| Depreciation                and amortization |   |                                          | 463            |   |   | 40 |   |   | - |   |   | 503 |   |
| Identifiable                assets           |   |                                          | 14,796         |   |   | 1,010 |   |   | 694 |   |   | 16,500 |   |
| Capital                expenditures          |   |                                          | 263            |   |   | 82 |   |   | - |   |   | 345 |   |

|                                                                  |   | (in                    thousands of dollars) |                                 |
|-----------------------------------------------------------------------|--------|----------------------------------------------|--------------------------------------|
|                                                                  |   | Three                    Months ended   | Nine                    Months ended |
|                                                                  |   |                                         | July                    1,2006  |   |   | July                    2,2005 |   |   | July                    1,2006 |   |   | July                    2,2005 |   |
| Electronic                    controllers for battery driven vehicles |   | **$**                                        | **6,260**                            |   | $ | 5,348 |   | **$** | **17,291** |   | $ | 15,906 |   |
| Accessory                    and aftermarket products and services    |   |                                         | **2,641**                            |   |   | 2,657 |   |   | **7,212** |   |   | 6,959 |   |
| Total                    controls segment revenues                    |   | **$**                                        | **8,901**                            |   | $ | 8,005 |   | **$** | **24,503** |   | $ | 22,865 |   |

----

**(7)    **
**Research      and Development**

|                                            |   | (in                thousands of dollars) |                                     |
|-------------------------------------------------|--------|------------------------------------------|------------------------------------------|
|                                            |   | Three                Months ended   | Nine                Months ended         |
|                                            |   |                                     | **July                1,****2006**  |   |   | July                2,2005 |   |   | **July                1,****2006** |   |   | July                2,2005 |   |
| Research                and Development expense |   | **$**                                    | **919**                                  |   | $ | 879 |   | **$** | **2,701** |   | $ | 2,659 |   |
| Percentage                of sales              |   |                                     | **9.9**                                  | **%** |   | 10.4 | % |   | **10.5** | **%** |   | 11.0 | % |

**(8)    **
**Employee      Benefit Plans**

|                                                  |   | (in                thousands of dollars) |                                     |
|-------------------------------------------------------|--------|------------------------------------------|------------------------------------------|
|                                                  |   | Three                Months ended   | Nine                Months ended         |
|                                                  |   |                                     | **July                1,****2006**  |   |   | July                2,2005 |   |   | **July                1,****2006** |   |   | July                2,2005 |   |
| Service                cost                           |   | **$**                                    | **98**                                   |   | $ | 108 |   | **$** | **284** |   | $ | 329 |   |
| Interest                cost                          |   |                                     | **241**                                  |   |   | 223 |   |   | **698** |   |   | 684 |   |
| Expected                return on plan assets         |   |                                     | **(227**                                 | **)** |   | (209 | ) |   | **(656** | **)** |   | (640 | ) |
| Amortization                of transition obligation  |   |                                     | **-**                                    |   |   | - |   |   | **-** |   |   | - |   |
| Amortization                of prior service cost     |   |                                     | **14**                                   |   |   | 13 |   |   | **40** |   |   | 39 |   |
| Recognized                net actuarial gain (loss)   |   |                                     | **-**                                    |   |   | - |   |   | **-** |   |   | - |   |
| Net                periodic benefit cost              |   |                                     | **126**                                  |   |   | 135 |   |   | **366** |   |   | 412 |   |
| Net                cost of defined contribution plans |   | **$**                                    | **9**                                    |   | $ | 7 |   | **$** | **25** |   | $ | 21 |   |

**(9)    **
**Inventories**

|                          |   | (in                thousands of dollars) |                             |
|-------------------------------|--------|------------------------------------------|----------------------------------|
|                          |   |                                     | July                1,2006  |   |   | September                30,2005 |   |
| Raw                materials  |   | **$**                                    | **2,666**                        |   | $ | 1,596 |   |
| Work-in-process               |   |                                     | **315**                          |   |   | 174 |   |
| Finished                goods |   |                                     | **2,542**                        |   |   | 1,967 |   |
|                          |   | **$**                                    | **5,523**                        |   | $ | 3,737 |   |

----

**(10)    **
**Accrued      expenses**

|                                                  |   | (in                thousands of dollars) |                                     |
|-------------------------------------------------------|--------|------------------------------------------|------------------------------------------|
|                                                  |   |                                     | **July                1,****2006**  |   |   | September                30,2005 |   |
| Accrued                compensation and related costs |   | **$**                                    | **1,119**                                |   | $ | 1,101 |   |
| Warranty                reserves                      |   |                                     | **522**                                  |   |   | 364 |   |
| Other                accrued expenses                 |   |                                     | **1,283**                                |   |   | 1,220 |   |
|                                                  |   | **$**                                    | **2,924**                                |   | $ | 2,685 |   |

**(11)    **
**Warranty      reserves**

|                                                                                                           | (in                thousands of dollars) |    |
|----------------------------------------------------------------------------------------------------------------|------------------------------------------|---------|
|                                                                                                           | Three                Months Ended        |    | Nine                Months Ended |   |
|                                                                                                           | July                1,2006               |    | July                2,2005 |   | July                1,2006 |   | July                2,2005 |   |
| Warranty                reserves at beginning of period                                                        | **$**                                    | **450** |   | $ | 404 |   | **$** | **364** |   | $ | 386 |   |
| Decrease                in beginning balance for warranty obligations settled during the                period |                                     | **(81** | **)** |   | (64 | ) |   | **(299** | **)** |   | (290 | ) |
| Other                changes to pre-existing warranties                                                        |                                     | **8**   |   |   | (7 | ) |   | **55** |   |   | 5 |   |
| Net                increase in warranty reserves for products sold during the                period            |                                     | **145** |   |   | 88 |   |   | **402** |   |   | 320 |   |
| Warranty                reserves at end of period                                                              | **$**                                    | **522** |   | $ | 421 |   | **$** | **522** |   | $ | 421 |   |

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

**FORWARD      LOOKING STATEMENTS**

**NEW      ACCOUNTING PRONOUNCEMENTS**

----

**CRITICAL      ACCOUNTING ESTIMATES**

**Bad      Debts**

----

**Inventories      **

**Warranty      Costs **

**Goodwill      Impairment **

----

**Pension      Plan Assumptions**

**RISK      FACTORS**

**Capital      goods markets are cyclical**

**Single      source materials and sub-contractors may not meet the Company’s      needs.**

**Damage      to the Company’s or sub-contractor’s buildings would hurt      results.**

**Product      liability claims may have a material adverse effect**

----

**OVERVIEW      OF THIRD QUARTER AND FIRST NINE MONTHS**

**Results      of Operations**

**Three      months ended July 1, 2006**

----

|                                                             |   |   |      |                            |   |
|------------------------------------------------------------------|--------|--------|-----------|---------------------------------|--------|
|                                                             |   |   |      | %                change due to: |   |
|                                                             |   |   | **2006**  |                            |   | 2005 |   |   | Total |   |   | Currency |   |   | Volume                / other |   |
| **Sales:**                                                       |   |   |      |                            |   |   |   |   |   |   |   |   |   |   |   |   |
| Controls                - to external customers                  |   | **$**  | **8,901** |                            | $      | 8,005 |   |   | 11 | % |   | - | % |   | 11 | % |
| Capacitors-                to external customers                 |   |   | **412**   |                            |   | 448 |   |   | -8 | % |   | 1 | % |   | -9 | % |
| Capacitors                - inter-segment                        |   |   | **18**    |                            |   | 40 |   |   | -55 | % |   | 1 | % |   | -56 | % |
| Capacitors                - total                                |   |   | **430**   |                            |   | 488 |   |   | -12 | % |   | 1 | % |   | -13 | % |
| Total                sales to external customers                 |   |   | **9,313** |                            |   | 8,453 |   |   | 10 | % |   | - | % |   | 10 | % |
| **Gross                Profit:**                                 |   |   |      |                            |   |   |   |   |   |   |   |   |   |   |   |   |
| Controls                                                         |   |   | **3,372** |                            |   | 2,913 |   |   | 16 | % |   | 5 | % |   | 11 | % |
| Capacitors                                                       |   |   | **180**   |                            |   | 247 |   |   | -27 | % |   | 1 | % |   | -28 | % |
| Total                                                            |   |   | **3,552** |                            |   | 3,160 |   |   | 12 | % |   | 4 | % |   | 8 | % |
| **Selling                research and administrative expenses:** |   |   |      |                            |   |   |   |   |   |   |   |   |   |   |   |   |
| Controls                                                         |   |   | **2,646** |                            |   | 2,486 |   |   | 6 | % |   | 1 | % |   | 5 | % |
| Capacitors                                                       |   |   | **205**   |                            |   | 191 |   |   | 7 | % |   | -2 | % |   | 9 | % |
| Unallocated                corporate expense                     |   |   | **117**   |                            |   | 102 |   |   | 15 | % |   | 0 | % |   | 15 | % |
| Total                                                            |   |   | **2,968** |                            |   | 2,779 |   |   | 7 | % |   | 1 | % |   | 6 | % |
| **Operating                income:**                             |   |   |      |                            |   |   |   |   |   |   |   |   |   |   |   |   |
| Controls                                                         |   |   | **726**   |                            |   | 427 |   |   | 70 | % |   | 28 | % |   | 42 | % |
| Capacitors                                                       |   |   | **(25**   | **)**                           |   | 56 |   |   | -145 | % |   | 10 | % |   | -155 | % |
| Unallocated                corporate expense                     |   |   | **(117**  | **)**                           |   | (102 | ) |   | 15 | % |   | 0 | % |   | 15 | % |
| Total                                                            |   |   | **584**   |                            |   | 381 |   |   | 53 | % |   | 33 | % |   | 20 | % |
| **Other                income and expense**                      |   |   | **(20**   | **)**                           |   | (48 | ) |   | -58 | % |   | -23 | % |   | -35 | % |
| **Income                before income taxes**                    |   |   | **564**   |                            |   | 333 |   |   | 69 | % |   | 41 | % |   | 28 | % |
| **Income                taxes**                                  |   |   | **(195**  | **)**                           |   | (117 | ) |   | 67 | % |   | 40 | % |   | 27 | % |
| **Net                Income**                                    |   | **$**  | **369**   |                            | $      | 216 |   |   | 71 | % |   | 41 | % |   | 30 | % |

----

**Nine      months ended July 1, 2006**

|                                                             |   |                                                                             |                                     |                            |   |
|------------------------------------------------------------------|--------|----------------------------------------------------------------------------------|------------------------------------------|---------------------------------|--------|
|                                                             |   |         Nine                months ended |                                     | %                change due to: |   |
|                                                             |   |                                                                             | **July                1,****2006**  |                            |   | July                2,2005 |   |   | Total |   |   | Currency |   |   | Volume                / other |   |
| **Sales:**                                                       |   |                                                                             |                                     |                            |   |   |   |   |   |   |   |   |   |   |   |   |
| Controls                - to external customers                  |   | **$**                                                                            | **24,503**                               |                            | $      | 22,865 |   |   | 7 | % |   | -3 | % |   | 10 | % |
| Capacitors-                to external customers                 |   |                                                                             | **1,193**                                |                            |   | 1,224 |   |   | -3 | % |   | -5 | % |   | 2 | % |
| Capacitors                - inter-segment                        |   |                                                                             | **53**                                   |                            |   | 189 |   |   | -72 | % |   | -2 | % |   | -70 | % |
| Capacitors                - total                                |   |                                                                             | **1,246**                                |                            |   | 1,413 |   |   | -12 | % |   | -5 | % |   | -7 | % |
| Total                sales to external customers                 |   |                                                                             | **25,696**                               |                            |   | 24,089 |   |   | 7 | % |   | -3 | % |   | 10 | % |
| **Gross                Profit:**                                 |   |                                                                             |                                     |                            |   |   |   |   |   |   |   |   |   |   |   |   |
| Controls                                                         |   |                                                                             | **9,385**                                |                            |   | 8,530 |   |   | 10 | % |   | -3 | % |   | 13 | % |
| Capacitors                                                       |   |                                                                             | **531**                                  |                            |   | 598 |   |   | -11 | % |   | -4 | % |   | -7 | % |
| Total                                                            |   |                                                                             | **9,916**                                |                            |   | 9,128 |   |   | 9 | % |   | -3 | % |   | 12 | % |
| **Selling                research and administrative expenses:** |   |                                                                             |                                     |                            |   |   |   |   |   |   |   |   |   |   |   |   |
| Controls                                                         |   |                                                                             | **7,706**                                |                            |   | 7,610 |   |   | 1 | % |   | -4 | % |   | 5 | % |
| Capacitors                                                       |   |                                                                             | **574**                                  |                            |   | 562 |   |   | 2 | % |   | -5 | % |   | 7 | % |
| Unallocated                corporate expense                     |   |                                                                             | **246**                                  |                            |   | 270 |   |   | -9 | % |   | 0 | % |   | -9 | % |
| Total                                                            |   |                                                                             | **8,526**                                |                            |   | 8,442 |   |   | 1 | % |   | -4 | % |   | 5 | % |
| **Operating                income:**                             |   |                                                                             |                                     |                            |   |   |   |   |   |   |   |   |   |   |   |   |
| Controls                                                         |   |                                                                             | **1,679**                                |                            |   | 920 |   |   | 83 | % |   | 9 | % |   | 74 | % |
| Capacitors                                                       |   |                                                                             | **(43**                                  | **)**                           |   | 36 |   |   | N/A |   |   | N/A |   |   | N/A |   |
| Unallocated                corporate expense                     |   |                                                                             | **(246**                                 | **)**                           |   | (270 | ) |   | -9 | % |   | 0 | % |   | -9 | % |
| Total                                                            |   |                                                                             | **1,390**                                |                            |   | 686 |   |   | 103 | % |   | 12 | % |   | 91 | % |
| **Other                income and expense**                      |   |                                                                             | **(55**                                  | **)**                           |   | (58 | ) |   | -5 | % |   | 12 | % |   | -17 | % |
| **Income                before income taxes**                    |   |                                                                             | **1,335**                                |                            |   | 628 |   |   | 113 | % |   | 12 | % |   | 101 | % |
| **Income                taxes**                                  |   |                                                                             | **(464**                                 | **)**                           |   | (220 | ) |   | 111 | % |   | 12 | % |   | 99 | % |
| **Net                Income**                                    |   | **$**                                                                            | **871**                                  |                            | $      | 408 |   |   | 113 | % |   | 12 | % |   | 101 | % |

----

----

**Financial      Condition**

**Item      3.** **Quantitative****and      Qualitative Disclosures about Market Risk.**

**Foreign      currency risk**

----

|                                                                |   | (in                thousands, except average contract rates) |                            |
|---------------------------------------------------------------------|--------|--------------------------------------------------------------|---------------------------------|
|                                                                |   | Expected                maturity or transaction date    |                            |   |   |
|                                                                |   |                                                         | FY2006                     |   |   | FY2007 |   |   | Total |   |   | Fair                Value |   |
| **On                balance sheet financial instruments:**          |   |                                                         |                            |   |   |   |   |   |   |   |   |   |   |
| In                $ US Functional Currency                          |   |                                                         |                            |   |   |   |   |   |   |   |   |   |   |
| Accounts                receivable in pounds                        |   |                                                         | 1,604                           |   |   | - |   |   | 1,604 |   |   | 1,604 |   |
| Accounts                receivable in euros                         |   |                                                         | 3,097                           |   |   | 33 |   |   | 3,130 |   |   | 3,130 |   |
| Accounts                payable in pounds                           |   |                                                         | 2,035                           |   |   | - |   |   | 2,035 |   |   | 2,035 |   |
| Accounts                payable in euros                            |   |                                                         | 359                             |   |   | - |   |   | 359 |   |   | 359 |   |
| **Anticipated                Transactions and related derivatives** |   |                                                         |                            |   |   |   |   |   |   |   |   |   |   |
| In                $ US Functional Currency                          |   |                                                         |                            |   |   |   |   |   |   |   |   |   |   |
| **Firmly                committed sales contracts**                 |   |                                                         |                            |   |   |   |   |   |   |   |   |   |   |
| In                pounds                                            |   |                                                         | 1,414                           |   |   | - |   |   | 1,153 |   |   | - |   |
| In                Euros                                             |   |                                                         | 1,622                           |   |   | - |   |   | 1,531 |   |   | - |   |
| **Forward                exchange agreements**                      |   |                                                         |                            |   |   |   |   |   |   |   |   |   |   |
| Sell                US Dollars for British Pounds                   |   |                                                         | 850                             |   |   | 250 |   |   | 1,100 |   |   | 76* |   |
| Sell                Euros for British Pounds                        |   |                                                         | 382                             |   |   | - |   |   | 382 |   |   | 2* |   |
| Average                contractual exchange rate                    |   |                                                         | $                  1.73-£1 |   |   | $                1.73-£1 |   |   | $                1.73-£1 |   |   |   |   |
| Amount                recorded as other comprehensive income        |   | $                                                            | 1                               |   | $ | - |   | $ | 1 |   | $ | 1 |   |

**Interest      Rate Risk**

**Item      4.** **Controls****and Procedures.**

----

**PART      II.** **OTHER****INFORMATION**

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

Item      6. Exhibits      

**SIGNATURES**

|                                | TECH/OPS                SEVCON, INC                                                                      |
|-------------------------------------|----------------------------------------------------------------------------------------------------------|
|                                |                                                                                                     |
|                                |                                                                                                     |
| Date:                August 9, 2006 | By:                /s/ Paul A. McPartlin                                                                 |
|                                | Paul                A. McPartlin                                                                         |
|                                | Chief                Financial Officer (Principal financial and chief accounting                officer) |
|                                |

|    | **Exhibit                Index**                                                                                                                                                                                        |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|    |                                                                                                                                                                                                                    |
| Exhibit | Description                                                                                                                                                                                                             |
|    |                                                                                                                                                                                                                    |
| 31.1    | Certification                of Principal Executive Officer pursuant to section 302 of the                Sarbanes-Oxley Act of 2002. Filed herewith.                                                                   |
|    |                                                                                                                                                                                                                    |
| 31.2    | Certification                of Principal Financial Officer pursuant to section 302 of the                Sarbanes-Oxley Act of 2002. Filed herewith.                                                                   |
|    |                                                                                                                                                                                                                    |
| 32.1    | Certification                of Principal Executive Officer and Principal Financial Officer pursuant                to                section 906 of the Sarbanes-Oxley Act of 2002. Furnished                herewith. |

----