Press Release

U.S. Electricar Announces Agreements with Hyundai

03/03/97

U.S. Electricar Inc. Announces Agreement with Hyundai Motor Co. and
Hyundai Electronics for Equity Investment and Technology
LicenseAgreement Totaling $5.6 Million

SAN FRANCISCO-- U.S. Electricar Inc. (Symbol:ECAR)
today announced it has reached agreement with Hyundai Motor
Co. ("HMC") and Hyundai Electronics Industries Co. Ltd. ("HEI") on the
principal terms and conditions upon which HMC and HEI shall
collectively invest $3.6 million in the Company, and secure a
technology license for an additional payment of $2.0 million.

The parties executed the definitive Stock Purchase Agreement and
Technology License Agreement today in a signing ceremony held in
Seoul, South Korea. The Company announced that it expects the
transactions to close in March 1997, with $5.45 million to have been
received by the Company by closing with the balance to be paid over
six years.

"Our relationship with Hyundai is of strategic importance to our
future. We are honored that Hyundai has chosen to invest in the future
of the electric vehicle industry through its investment in
U.S. Electricar. We are also pleased and honored that Hyundai has made
our drivetrain technology its system of choice," said Roy Kusumoto,
chairman and chief executive officer of U.S. Electricar Inc.

"This agreement with Hyundai culminates over a year of intense
development work with Hyundai, and represents a very significant step
forward for U.S. Electricar. Last year we committed to our
shareholders that we would focus our efforts on developing
international sales and marketing opportunities, and we have been able
to do just that as evidenced by this transaction with a major
international automotive OEM," added Kusumoto.

During the past year the Company, through its Components Division, has
participated with HMC in a test program utilizing prototypes of the
Company's Panther(TM) 60KW drivetrain in Hyundai Accent automobiles.

One of these vehicles has been successfully tested by the California
Air Resources Board and is currently being tested by Southern
California Edison. Pursuant to the Technology License Agreement
announced today, HMC and HEI shall have a permanent license to use
certain technical data in the manufacture and assembly of the
Panther(TM) series of electric drivetrains designed by the Company's
Components Division for use within motor vehicles built by Hyundai or
its subsidiaries.

Under the terms of the Stock Purchase Agreement, HMC and HEI shall
collectively receive 12,000,000 shares of stock in the Company for an
investment of $3.6 million.

U.S. Electricar Inc. develops and manufactures electric vehicles for
market in the United States and internationally, with products ranging
from electric drivetrain systems and components to delivery vehicles.

CONTACT: U.S. Electricar Inc. | Roy Y. Kusumoto, 415/656-2400