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                                                                   Exhibit 10.38
                                                                   -------------




                                 PROMISSORY NOTE
                                 ---------------

                                February 9, 1999


     FOR VALUE RECEIVED, the undersigned ("Maker") hereby promises to pay to the
order of Electric Fuel Corporation, a Delaware corporation ("EFC"), ten years
from the date of this note, the principal sum of Seven Hundred Eighty-Nine
Thousand and Nine Hundred Ninety dollars (U.S. $789,990), together with simple
interest from the date hereof on the principal amount from time to time unpaid
at a per annum rate equal to the federal funds rate announced by the Wall Street
Journal on the last business day preceding the date of the note, plus 1% until
the principal sum is paid in full. The Maker will pay such interest semi-
annually until the principal has been paid in full, except that all accrued but
unpaid interest shall be due and payable at the stated or accelerated maturity
hereof. This note may be prepaid in whole or in part at any time, without
premium, penalty or prior notice.

     In the event that (a) the Maker fails to make any payment of interest on
this note as provided herein and such failure continues for a period of 30 days
or (b) the Maker files or has filed against the Maker any petition under any
bankruptcy or insolvency law or for the appointment of a receiver or makes a
general assignment for the benefit of creditors, then the entire unpaid
principal of this note, together with accrued interest thereon, shall
automatically become immediately due and payable. No failure by the holder to
take action with respect to any default hereunder shall affect its subsequent
rights to take action with respect to the same or any other default. In the
event of default the Maker agrees to pay all reasonable costs of collection,
including reasonable attorneys' fees, to the extent allowed by law.

     In order to secure the prompt payment of the principal of, interest on, and
all other amounts in respect of this Note as the same shall become due and
payable, the Maker hereby pledges to EFC, and grants EFC a security interest in,
the 131,665 shares (the "Pledged Shares") of EFC's Common Stock, $.01 par value,
acquired with this note. The recourse under this note shall only be to the
Pledged Shares.

     To perfect EFC's security interest in the Pledged Shares, the Maker shall
deliver to EFC the stock certificate or certificates representing the Pledged
Shares, together with stock powers duly endorsed in blank. EFC shall release its
security interest in the Pledged Shares when all principal and interest owed
hereunder have been paid in full.

     The Maker hereby waives presentment, demand, notice of nonpayment, protest
and all other demands, notices and defenses (other than payment) in connection
with the delivery, acceptance, performance and enforcement of this note.

     This note shall be governed by and construed in accordance with the laws
(other than the conflict of law rules) of the State of New York.

     IN WITNESS WHEREOF, I have hereunto set my hand this 9th day of
February, 1999.


                                /s/ Yehuda Harats
                                -----------------------
                                Yehuda Harats