Electric Fuel

CONTACT:          Matt Bourne                              FOR IMMEDIATE RELEASE
                  G.S. Schwartz & Co.
                  212-725-4500


                       ELECTRIC FUEL CORPORATION ANNOUNCES
                          $10 MILLION PRIVATE PLACEMENT


         October 3, 1996 -- Electric Fuel Corporation, (Nasdaq:  EFCX), 
announced today that it has raised $10.0 million in a private placement of its 
Common Stock at a price of $6.50 per share with one of its existing 
stockholders, Leon S. Gross. As a result of this $10.0  million  offering, 
Mr. Gross will now own a total of  3,009,162  shares  of  Common  Stock,  or 
20.2%  of the  Company  on a fully-diluted basis. After this offering, the 
Company will have 14,900,495 shares of Common Stock  outstanding,  on a
fully diluted basis,  compared to 13,362,033 shares on a  fully-diluted  basis 
before the offering.  The closing price on The Nasdaq  National  Market for
Electric Fuel's Common Stock on October 2, 1996 was $6 1/8 per share.
         "I believe that this Company represents a tremendous opportunity.  Its 
strategy of targeting the fleet and commercial vehicle markets is the 
springboard to making all electric vehicles a reality," said Mr. Gross.
         "The  financing  provides  Electric  Fuel with  significant  additional
financial resources which allows us to further expand the Company's marketing of
its  proprietary  zinc-air  battery  technology.  This  comes at a time when our
activities are expanding into Holland and our

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marketing  efforts  are  focusing on South  Africa,  the Far East and the United
States," said Yehuda  Harats,  Electric  Fuel's  President  and Chief  Executive
Officer.
         In connection with the Offering,  Lawrence M. Miller,  Esq., an advisor
to Mr. Gross, will be selected to Electric Fuel's Board of Directors pursuant to
a voting agreement entered into by the Company, Mr. Gross and certain members of
management.  In  addition,  Mr.  Gross will be entitled to certain  registration
rights with respect to his shares.
         The Company will be filing a report on Form 8-K giving  further  detail
on the terms of the Offering.
         This  press  release  contains  forward-looking  statements.  There are
certain  important  factors that could cause results to differ  materially  from
those anticipated by the statements made above.  Among, but not limited to these
factors are reliance on the Deutsche  Post field test,  the  uncertainty  of the
electric  vehicle market,  significant  future capital  requirements and certain
United States tax consequences to the Company and its wholly-owned  subsidiaries
as a result of the stock ownership of the Company.
         Electric Fuel Corporation,  with corporate offices in New York City and
manufacturing  and R&D  facilities  in Jerusalem,  Israel,  has  positioned  its
zinc-air  energy  system  at the  forefront  of  zero-emission  electric-powered
transportation.

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