Israel Corp.'s China JV with Chery may make electric cars

Israel Corp., the holding company controlled by the billionaire Ofer family, may dedicate its Chinese automobile joint venture exclusively to making electric cars within five years, Chairman Idan Ofer said in an interview.

The 5.8 billion-yuan ($830 million) partnership with Chery Automobile Co. may generate savings by working with Project Better Place, another Israel Corp. unit that's planning a global network of battery-recharging stations, Ofer said. The venture, based in the eastern province of Anhui, will initially build conventional sedans for the U.S. and European markets, he said.

Ofer, 52, is leading Israel Corp. out of its domestic market and reducing its reliance on chemicals and shipping with acquisitions in China, Latin America and Africa, and in industries such as energy and cars. The company last year invested $100 million in Better Place, which was started by SAP AG's former chief software architect Shai Agassi.

"If you'd asked me a year ago, I would have said I know nothing about electric cars," Ofer told Bloomberg Television from his office in Tel Aviv. "Now I'm convinced about the business case and the environmental case."

In the past two years, Ofer bought control of Oil Refineries Ltd., Israel's biggest refiner, and invested in Inkia Energy Ltd., which operates utilities in six Latin American and Caribbean countries. Project Better Place is working with Renault SA and Nissan Motor Co. and its investors include Morgan Stanley and former World Bank president James Wolfensohn.

"The Chery venture and Better Place both have a lot of potential, but both are in their beginning stages," Yuval Zehira, an analyst at Tel Aviv-based Israel Brokerage & Investments Ltd., said by telephone. "The challenge for Israel Corp. will be to get these projects up and running."