<PAGE>

                                                                     EXHIBIT 4.1

                            STOCK PURCHASE AGREEMENT

                  This Stock Purchase Agreement (this "Agreement") is entered
into as of January 18, 2002, by and between Electric Fuel Corporation, a
Delaware corporation (the "Company"), and Special Situations Private Equity
Fund, L.P., Special Situations Fund III, L.P., Special Situations Technology
Fund, L.P. and Special Situations Cayman Fund, L.P. (together, the "Purchaser").

                  WHEREAS, the Company has registered with the Securities and
Exchange Commission (the "Commission") the issuance of certain shares of its
common stock, US$0.01 par value per share ("Common Stock"), under a registration
statement on Form S-3 (Registration No. 333-63514) (the "Registration
Statement").

                  WHEREAS, subject to the terms and conditions set forth in this
Agreement, the Company desires to sell to the Purchaser and the Purchaser
desires to purchase from the Company certain shares of Common Stock under the
Registration Statement ("Shares"), as more fully described below.

                  NOW, THEREFORE, in consideration of the foregoing, the mutual
covenants contained in this Agreement and for other good and valuable
consideration the receipt and adequacy of which are hereby acknowledged, the
Company and the Purchaser agree as follows:

                  1.  Closing.
                      -------

                  (a) The closing of the purchase and sale of the shares under
this Agreement will take place at the offices of the Company, 632 Broadway, New
York, New York.

                  (b) Subject to the satisfaction (or waiver by the Purchaser)
of the conditions set forth in Section 2, on January 24, 2002 (the "Closing
Date"): (x) the Company will: (i) issue to the Purchaser, in such amounts as the
Purchaser shall specify, share certificates in the aggregate amount of 1,600,000
Shares, and (ii) file with the Commission a Supplement disclosing the sale of
Shares on the Closing Date; and (y) the Purchaser will deliver to the Company an
amount in United States dollars equal to US$2,480,000, via wire transfer of
immediately available funds to an account designated in writing by the Company
for such purpose.

                  2.  Conditions. The obligation of the Purchaser to purchase
                      ----------
and acquire Shares under this Agreement on the Closing Date is subject to the
fulfillment (or waiver by the Purchaser) of each of the following conditions:

                  (a) The Company shall have filed the Supplement with the
Commission (which may occur concurrently with the Closing).

                  (b) The Registration Statement (x) shall be effective on the
Closing Date as to all Shares to be issued and sold therein, not subject to any
threatened or actual stop order and (y) will not on the Closing Date contain any
untrue statement of material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.

                  (c) The Company shall have secured the listing of the Shares
to be issued and sold on the Closing Date on the Nasdaq National Market (subject
to official notice of

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 issuance).

                  (d) The representations and warranties of the Company made in
this Agreement shall be true and correct as of and on each of the date of this
Agreement and the Closing Date, as if first made and restated on the Closing
Date.

                  3.  Representations and Warranties of the Company. The Company
                      ---------------------------------------------
hereby makes the following representations and warranties to the Purchaser:

                  (a) Organization and Qualification. The Company is a
                      ------------------------------
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware with the requisite corporate power and authority
to own and use its properties and assets and to carry on its business as
currently conducted. The Company is duly qualified to conduct business and is in
good standing as a foreign corporation or other entity in each jurisdiction in
which the nature of the business conducted or property owned by it makes such
qualification necessary.

                  (b) Authorization. The Company has the requisite corporate
                      -------------
power and authority to enter into and to consummate the transactions
contemplated by this Agreement and otherwise to carry out its obligations
thereunder. The execution and delivery of this Agreement by the Company and the
consummation of the transaction contemplated hereby have been duly authorized by
all necessary action on the part of the Company and no further action is
required by the Company or its shareholders for the Company to execute and
consummate this Agreement and the transactions contemplated hereby. This
Agreement has been duly executed by the Company and, when delivered in
accordance with the terms hereof, and assuming the valid execution hereof by the
Purchaser, will constitute the valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except (a) as such
enforceability may be limited by bankruptcy, insolvency, reorganization or
similar laws affecting creditors' rights generally, (b) as enforceability of any
indemnification and contribution provisions may be limited under the federal and
state securities laws and public policy, and (c) that the remedy of specific
performance and injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.

                  (c) No Conflicts. The execution, delivery and performance of
                      ------------
this Agreement by the Company and the consummation by the Company of the
transactions contemplated hereby does not and will not: (i) conflict with or
violate any provision of the Company's certificate of incorporation or bylaws
(each as amended through the date hereof), or (ii) conflict with, or constitute
a default (or an event which with notice or lapse of time or both would become a
default) under, or give to others any rights of termination, amendment or
acceleration (with or without notice, lapse of time or both) of, any material
agreement or indebtedness to which the Company is a party or by which any
material property or asset of the Company is bound or affected, or (iii) result
in a violation of any law, rule, regulation, order, judgment, decree or other
restriction of any court, governmental authority or stock market to which the
Company or the Common Stock is subject.

<PAGE>


                  (d) Issuance of the Shares. The Shares are duly authorized
                      ----------------------
and, when issued and paid for in accordance with the terms hereof, will be
legally issued, fully paid and nonassessable, free and clear of all liens and
encumbrances (other than any that are the result of any action or inaction of
the Purchasers). On the Closing Date the Company shall have secured the listing
of the Shares on the Nasdaq National Market (subject to official notice of
issuance).

                  (e) Registration Statement. The Registration Statement is
                      ----------------------
effective and the Company has not received notice that the Commission has issued
or intends to issue a stop order with respect to the Registration Statement or
that the Commission otherwise has suspended or withdrawn the effectiveness of
the Registration Statement, either temporarily or permanently, or intends or has
threatened in writing to do so. The Registration Statement (including the
information or documents incorporated by reference therein), as of the time it
was declared effective, and any amendments or supplements thereto, each as of
the time of filing, did not contain any untrue statement of material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading. The Shares are registered under the Securities Act of 1933
(the "Securities Act"), as amended, by the Registration Statement.

                  (f) Listing and Maintenance Requirements. The Company has not,
                      ------------------------------------
in the twelve months preceding the Execution Date, received notice from the
Nasdaq National Market to the effect that the Company is not in compliance with
the listing or maintenance requirements thereof. The Company is, and has no
reason to believe that it will not in the foreseeable future continue to be, in
compliance with the listing and maintenance requirements for continued trading
of the Common Stock on the Nasdaq National Market (except as a result of a
decline in the market price of the Common Stock) and currently meets the
standard prescribed therein with regard to net tangible assets.

                  (g) Certain Fees. No fees or commissions will be payable by
                      ------------
the Company to any broker, financial advisor or consultant, finder, placement
agent, investment banker, bank or other Person with respect to the transactions
contemplated by this Agreement. The Purchaser will have no obligation with
respect to any fees incurred by the Company or any other Person (other than the
Purchaser, if the Purchaser has agreed in writing to pay such fees) or with
respect to any claims made by or on behalf of other Persons for fees of a type
contemplated in this Section that may be due in connection with the transactions
contemplated by this Agreement. The Company will indemnify and hold harmless the
Purchaser, its employees, officers, directors, agents, partners, and affiliates,
from and against all claims, losses, damages, costs (including the costs of
preparation and reasonable attorney's fees) and expenses suffered in respect of
any such claimed or existing fees incurred by the Company or any other Person,
as such fees and expenses are incurred. "Person" means any court or other
federal, state, local or other governmental authority or other individual or
corporation, partnership, trust, incorporated or unincorporated association,
joint venture, limited liability company, joint stock company, government (or an
agency or subdivision thereof) or other entity of any kind.

<PAGE>


                  (h) Disclosure. Neither the Company nor any other Person
                      ----------
acting on its behalf has provided the Purchaser or their agents or counsel with
any information that constitutes or may, in the Company's opinion, constitute
material non-public information.

                  (i) SEC Reports; Financial Statements. The Company has filed
                      ---------------------------------
all reports required to be filed by it under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), for the twelve months preceding the date
hereof (collectively, "SEC Reports") on a timely basis or has received a valid
extension of such time of filing and has filed any such SEC Reports prior to the
expiration of any such extension. As of their respective dates, the SEC Reports
complied in all material respects with the requirements of the Securities Act
and the Exchange Act and the rules and regulations of the Commission promulgated
thereunder, and none of the SEC Reports, when filed, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. The financial
statements of the Company included in the SEC Reports comply in all material
respects with applicable accounting requirements and the rules and regulations
of the Commission with respect thereto as in effect at the time of filing. Such
financial statements have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis during the periods involved,
except as may be otherwise specified in such financial statements or the notes
thereto, and fairly present in all material respects the financial position of
the Company and its consolidated subsidiaries as of and for the dates thereof
and the results of operations and cash flows for the periods then ended,
subject, in the case of unaudited statements, to normal year-end audit
adjustments.

                  4.  Representations and Warranties of the Purchaser. The
                      -----------------------------------------------
Purchaser hereby represents and warrants to the Company as follows:

                  (a) Organization; Authorization. The Purchaser has been
                      ---------------------------
organized and is in good standing under the laws of the jurisdiction of its
formation. The Purchaser has the requisite right, power and authority to enter
into this Agreement and to consummate the transactions contemplated hereby. Upon
the execution and delivery of this Agreement, and assuming the valid execution
thereof by the Company, this Agreement shall constitute the valid and binding
obligation of the Purchaser, enforceable against the Purchaser in accordance
with its terms, except (a) as such enforceability may be limited by bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights
generally, (b) as enforceability of any indemnification and contribution
provisions may be limited under the federal and state securities laws and public
policy, and (c) that the remedy of specific performance and injunctive and other
forms of equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be brought.

                  (b) No Conflicts. The execution, delivery and performance of
                      ------------
this Agreement by the Purchaser and the consummation by the Purchaser of the
transactions contemplated hereby does not and will not (i) conflict with or
violate any provision of the Purchaser's certificate of incorporation or bylaws
(each as amended through the date hereof), or (ii) conflict with, or constitute
a default (or an event which with notice or lapse

<PAGE>

of time or both would become a default) under, or give to others any rights of
termination, amendment or acceleration (with or without notice, lapse of time or
both) of, any material agreement or indebtedness to which the Purchaser is a
party or by which any material property or asset of the Purchaser is bound or
affected, or (iii) result in a violation of any order, judgment or decree of any
court to which the Purchaser is subject.

                  (c) Investment Intent. The Purchaser is acquiring the Shares
                      -----------------
for its own account for investment purposes only and not with a view to or for
distributing or reselling the Shares or any part thereof, without prejudice,
however, to the Purchaser's right at any time to sell any Shares in accordance
with applicable securities laws. Nothing contained herein shall be deemed a
representation or warranty by the Purchaser to hold Shares for
any period of time. The Purchaser is acquiring the Shares hereunder in the
ordinary course of its business. The Purchaser does not have any agreement or
understanding, directly or indirectly, with any Person to distribute the Shares.

                  (d) Purchaser Status. The Purchaser is an "accredited
                      ----------------
investor" as defined in Rule 501(a) under the Securities Act and a "qualified
institutional buyer" as defined in Rule 144A(a)(1) under the Securities Act. The
Purchaser is not a registered broker-dealer under Section 15of the Exchange Act.
The Purchaser is able to bear the economic risk of an investment in the Shares
and, at the present time, is able to afford a complete loss of such investment.

                  (e) Experience of such Purchaser. The Purchaser, either alone
                      ----------------------------
or together with its representatives, has such knowledge, sophistication and
experience in business and financial matters so as to be capable of evaluating
the merits and risks of the prospective investment in the Shares, and has so
evaluated the merits and risks of such investment.

                  5.  Certain Disclosures. The Company will not and will cause
                      -------------------
each of its affiliates and other Persons acting on behalf of the Company not to
divulge to the Purchaser any information that it believes to be material
non-public information unless the Purchaser has agreed in writing to receive
such information prior to such divulgence. Neither the Company nor the Purchaser
will issue any press release or make any other public announcement relating to
this Agreement unless the content thereof is mutually agreed to by the Company
and the Purchaser, or if the Company is advised in writing by its counsel that
such press release or public announcement is required by law, other than (i) the
filing of the Supplement, (ii) the filing of a Current Report on Form 8-K in
order to furnish an opinion of counsel as to the legality of the Shares, as
required by Item 16 of Form S-3 and Item 601(b)(5) of Regulation S-K, for
incorporation by reference into the Registration Statement, and (iii) the filing
of a Notification Form regarding the Listing of Additional Shares with The
Nasdaq Stock Market.

                  6.  Subsequent Financing. Prior to July 24, 2002, the Company
                      --------------------
will not register with the Securities and Exchange Commission or sell any shares
of Common Stock or securities convertible into shares of Common Stock (other
than in connection with an underwritten public offering or with respect to stock
option plans registered on a Form S-8 registration statement), except (i) shares
intended to be sold to the Purchaser,

<PAGE>

(ii) up to 318,468 shares that may be sold to distributors or service providers
wholly or substantially in exchange for services rendered or in satisfaction of
contractual obligations with such service providers, (iii) in compliance with
registration rights of third parties, or (iv) shares that may be registered in a
resale registration statement in connection with acquisitions or investments in
unaffiliated companies. Notwithstanding the foregoing, in the event that the
Company qualifies to register primary offerings on a Form S-3 registration
statement, the Company may register shares on a shelf registration; provided,
however, that until July 24, 2002, the Company shall not sell any such shares
other than in connection with acquisitions or investments in unaffiliated
companies. As a further exception to the foregoing, in the event that any part
of the purchase price paid by the Company in connection with any acquisition of
or investment in an unaffiliated company shall be paid in cash (the "Cash
Portion"), then on or after May 24, 2002 the Company shall be permitted to
register and/or sell such number of shares of stock as shall yield net proceeds
to the Company in an amount that shall be not greater than the amount of such
Cash Portion.


                  7.  Miscellaneous.
                      --------------

                  (a) Fees and Expenses. Each party will pay the fees and
                      -----------------
expenses of its advisers, counsel, accountants and other experts, if any, and
all other expenses incurred by such party incident to the negotiation,
preparation, execution, delivery and performance of this Agreement. The Company
will pay any stamp and other taxes and duties levied in connection with the sale
of the Shares.

                  (b) Entire Agreement; Amendments. This Agreement contains the
                      ----------------------------
entire understanding of the parties with respect to the subject matter hereof
and supersedes all prior agreements and understandings, oral or written, with
respect to such matters, which the parties acknowledge have been merged into
this Agreement. This Agreement may not be modified or amended except in a
writing for such purpose signed by the Company and the Purchaser. The waiver by
either party hereto of any right hereunder or the failure to perform or of a
breach by the other party will not be deemed a waiver of any other right
hereunder or of any other breach or failure by said other party whether of a
similar nature or otherwise.

                  (c) Notices. Any and all notices or other communications or
                      -------
deliveries required or permitted to be provided hereunder must be in writing and
will be deemed given and effective on the earliest of (i) the date of
transmission, if such notice or communication is delivered via facsimile or
email (the parties agree that email communication will only be used for
prospectus delivery) prior to 5:00 p.m. (New York City time) on a trading day,
(ii) the trading day after the date of transmission, if such notice or
communication is delivered via facsimile later than 5:00 p.m. (New York City
time) on any date and earlier than 11:59 p.m. (New York City time) on such date,
(iii) the trading day following the date of mailing, if sent by nationally
recognized overnight courier service, or (iv) upon actual receipt by the party
to whom such notice is required to be given. The address for such notices and
communications will be as follows (or such other address as may be designated in
writing hereafter, in the same manner, by such Person):

<PAGE>

      If to the Company:   Electric Fuel Corporation
                               632 Broadway, Suite 301
                               New York, New York 10012
                               Facsimile No.: (212) 529-5800
                               Attn: Chief Financial Officer / General Counsel
                               Email: ehrlich@electric-fuel.com
                                      -------------------------
                                      yaakovh@electric-fuel.com
                                      -------------------------

      With a copy to:          Electric Fuel (E.F.L.) Ltd.
                               Western Industrial Zone
                               Beit Shemesh 99000, Israel
                               Facsimile No.: 011-972-2-990-6688
                               Attn.: Chief Financial Officer / General Counsel
                               Email: ehrlich@electric-fuel.com
                                      -------------------------
                                      yaakovh@electric-fuel.com
                                      -------------------------
      If to the Purchaser: To the address set forth under the Purchaser's
                               name on the signature page hereto.


                  (d) Governing Law. All questions concerning the construction,
                      -------------
validity, enforcement and interpretation of this Agreement will be governed by
and construed and enforced in accordance with the internal laws of the State of
New York, without regard to the principles of conflict of laws thereof. Each
party agrees that all legal proceedings concerning the interpretations,
enforcement and defense of the transactions contemplated by this Agreement
(whether brought against a party hereto or its respective affiliates, directors,
officers, shareholders, employees or agents) will be exclusively commenced in
the state and federal courts sitting in the City of New York, Borough of
Manhattan. Each party hereto hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the City of New York,
Borough of Manhattan for the adjudication of any dispute hereunder or in
connection herewith or with any transaction contemplated hereby or discussed
herein (including with respect to the enforcement of this Agreement), and hereby
irrevocably waives, and agrees not to assert in any suit, action or proceeding,
any claim that it is not personally subject to the jurisdiction of any such
court or that such courts are an improper or inconvenient forum. Each party
hereto hereby irrevocably waives personal service of process and consents to
process being served in any such suit, action or proceeding by mailing a copy
thereof via registered or certified mail or overnight delivery (with evidence of
delivery) to such party at the address in effect for notices to it under this
Agreement and agrees that such service will constitute good and sufficient
service of process and notice thereof. Nothing contained herein will be deemed
to limit in any way any right to serve process in any manner permitted by law.
Each party hereto hereby irrevocably waives, to the fullest extent permitted by
applicable law, any and all right to trial by jury in any legal proceeding
arising out of or relating to this Agreement or the transactions contemplated
hereby. If either party shall commence an action or proceeding to enforce any
provisions of this Agreement, then the prevailing party in such action or
proceeding will be reimbursed by the other party for its reasonable attorneys
fees and other reasonable costs and expenses incurred with the investigation,

<PAGE>



preparation and prosecution of such action or proceeding.

                  (e) Certain Remedies. In addition to being entitled to
                      ----------------
exercise all rights provided herein or granted by law, including recovery of
damages, the Purchaser and the Company will each be entitled to specific
performance of the others obligations under this Agreement. In furtherance
thereof, the parties agree that monetary damages may not be adequate
compensation for any loss incurred by reason of any such breach and hereby
agrees to waive in any action for specific performance of any such obligation
the defense that a remedy at law would be adequate.

                  (f) Execution. This Agreement may be executed in two or more
                      ---------
counterparts, all of which when taken together shall be considered one and the
same agreement and shall become effective when counterparts have been signed by
each party and delivered to the other party, it being understood that both
parties need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission, such signature shall create a valid and
binding obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile signature
page were an original thereof.

         IN WITNESS WHEREOF, the parties hereto have caused this Purchase
Agreement to be duly executed as of the date first indicated above.

                                 ELECTRIC FUEL CORPORATION


                                 By:__________________________________
                                    Name:  Robert S. Ehrlich
                                    Title: Chairman and Chief Financial Officer


                                 SPECIAL SITUATIONS CAYMAN FUND, L.P.


                                 By:__________________________________
                                    Name:
                                    Title:


                                 SPECIAL SITUATIONS FUND III, L.P.


                                 By:___________________________________
                                    Name:
                                    Title:

                                 SPECIAL SITUATIONS TECHNOLOGY FUND, L.P.

<PAGE>


                                    By:______________________________
                                       Name:
                                       Title:

                                    SPECIAL SITUATIONS PRIVATE EQUITY FUND, L.P.




                                    By:______________________________
                                       Name:
                                       Title:

                                    Address for Notice and for delivery
                                    of the prospectus:

                                    Special Situation Funds
                                    153 East 53/rd/ Street - 55/th/ Floor
                                    New York, New York 10022
                                    Attn: Steven R. Becker
                                    Facsimile No.: (212) 207-6515
                                    Email: steve@ssfund.com