Semmens Resigns as Electrosource Chief Executive Officer.

SAN MARCOS, Texas, Dec. 10 /PRNewswire/ -- Electrosource, Inc. (Nasdaq: ELSI) (the "Company") today announced the resignation of Michael G. Semmens as Chairman, CEO and President of Electrosource, Inc. effective immediately. The resignation of Mr. Semmens along with the resignation of two other Board members (Dr. William R. Graham and Mr. Earl E. Gjelde) was accepted at a meeting of the Board of Directors on Monday, December 7. The Electrosource Board of Directors was also reduced to seven members at the meeting.

The Board appointed Mr. William F. Griffin (Executive Vice-President of Marketing) as the Acting Chief Executive Officer and Ms. Mary Beth Koenig (Treasurer and Chief Accounting Officer) as the Acting Chief Financial Officer of Electrosource effective immediately.

Mr. Griffin stated that "The Company is refocusing its efforts on streamlining operations and manufacture of the Horizon 12H85 battery for its key customers. The performance of this battery in field tests within our customer base has been impressive. The range and cycle life of the 12H85 in such tests as hybrid electric vehicle and pure electric vehicle applications are now consistently approaching that of other advanced battery technologies. We believe this battery has the most immediate potential market applications. All other programs and applications of the core technology are being reviewed on an individual basis."

Management is reviewing current and future business plans with Kamkorp, a customer and equity funding partner, who has stated that the changes in management due not change their plan to continue making payments in amounts necessary to sustain operations. The business review is expected to be completed in early 1999.

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 www.electrosource.com.

This release contains forward-looking statements that involve risks and uncertainties. Actual results could differ materially from those discussed in this release. Risks include financial risks, development risks, manufacturing risks, uncertainty of market acceptance, delay in shipment or cancellation of orders, customer reorganization, as well as other risks that are detailed from time to time in the company's Securities and Exchange Commission filings.