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Electrosource, Corning Team to Commercialize Batteries

27 October 1997

Electrosource, Corning Team to Commercialize Batteries

    SAN MARCOS, Texas, Oct. 27 -- Electrosource, Inc.
, announced today that it has entered into a technical
development agreement with Corning, Inc. , a $3.7 billion
"Fortune 500" company.  Under the agreement, the two companies will work to
further improve the production processes and automation in Electrosource's San
Marcos, Texas, facility.  The agreement also covers multiple projects that
involve research and development of technologies, design and manufacture of
Electrosource batteries.
    Electrosource Chairman, President and CEO, Michael G. Semmens, said,
"Corning has a history of building business relationships with companies whose
innovative technologies complement Corning's core businesses.  The Corning
team brings vast experience in manufacturing operations, materials technology,
and process technology.  Working together should allow us to accelerate
expansion of our production operations while targeting aggressive unit cost
objectives for our customers.  Our goal is to manufacture and commercialize
our high-performance, low-cost batteries on a global basis."  Under the
technical agreement, Corning will receive compensation in the form of options
to purchase Electrosource common stock for technical services provided.
Corning is a world leader in glass and ceramics, optical and photonics
technology, and opto-electronic products.
    In March 1997, Corning invested $4 million in Electrosource in the form of
a five-year note, convertible into common stock, with a two-year option to
purchase additional shares.
    Electrosource HORIZON(R) C2M (co-extruded composite matrix)
maintenance-free batteries deliver a high-power / high-energy combination and
offer deep discharge characteristics at affordable prices.  The HORIZON C2M
battery is an advanced energy storage solution ideally suited for use in a
number of markets such as aircraft starting, portable power equipment such as
lawn and garden tools, electric and hybrid-electric vehicles, electric
scooters and bikes, and backup power supplies.
    Electrosource has production orders from Chrysler and Lockheed Martin and
is developing new C2M batteries under cooperative development contracts with
FIAT Auto, SMH Automobile, and the Defense Advanced Research Projects Agency.
    Electrosource, headquartered in San Marcos, Texas, designs, manufactures
and markets proprietary advanced energy storage technologies and systems.
Additional information about the company is located on the Internet at
http://www.electrosource.com .
    This release contains forward-looking statements regarding sales that
involve risks and uncertainties.  Actual results could differ materially from
those discussed in this release.  Risks, including manufacturing risks, risks
of uncertainty of market acceptance, delay in shipment or cancellation of
orders, customer reorganization, as well as others, are detailed from time to
time in the Company's Securities and Exchange Commission filings.

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