<PAGE>

                      SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-Q

               Quarterly report pursuant to Section 13 or 15(d)
                    of the Securities Exchange Act of 1934.

              For the quarterly period ended: September 30, 1999

                          Commission file No.  0-23336

                           ELECTRIC FUEL CORPORATION
             ----------------------------------------------------
                 Exact name of registrant as specified in its charter

                    Delaware                               95-4302784
    -----------------------------------         ------------------------------
       (State or other jurisdiction                   (I.R.S. Employer
       incorporation or organization)                 Identification No.)


            885 Third Avenue, New York, New York 10022 - Suite 2900
            -------------------------------------------------------
                   (Address of principal executive offices)
                                  (Zip Code)

                                 (212) 230-2172
         -----------------------------------------------------------
             (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

                            Yes X                No

                     APPLICABLE ONLY TO CORPORATE ISSUERS:

         The number of shares outstanding of the issuer's common stock
                    as at November 9, 1999 was 14,048,054.

<PAGE>

                                     INDEX

<TABLE>
<CAPTION>
                                                                          Page
                                                                          ----
<S>                                                                       <C>
PART I - FINANCIAL INFORMATION:

     Item 1 - INTERIM FINANCIAL STATEMENTS (UNAUDITED):
     -------------------------------------------------
          Consolidated Balance Sheets at September 30, 1999 and
             December 31, 1998                                             3-4
          Consolidated Statements of Operations for the Nine Months
             and Three Months ended September 30, 1999 and 1998             5
          Consolidated Statements of Changes in Stockholders' Equity
             for the Nine Months ended September 30, 1999                   6
          Consolidated Statements of Cash Flows for the Nine Months
             ended September 30, 1999 and 1998                             7-8
          Notes to the Consolidated Financial Statements                   9-11


     Item 2 - Management's Discussion and Analysis of Financial
     ----------------------------------------------------------
                 Condition and Results of Operations                      12-16
                 -----------------------------------

PART II - OTHER INFORMATION:
        Item 6 - Reports on Form 8-K                                        17

</TABLE>

                                     Page 2
<PAGE>

ELECTRIC FUEL CORPORATION
CONSOLIDATED BALANCE SHEETS




<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------
                                                          December 31,    September 30,
                                                             1998           1999
                                                          -----------      ----------
                                  ASSETS                   (Audited)     (Unaudited)


<S>                                                       <C>              <C>
CURRENT ASSETS:
    Cash and cash equivalents                             $ 5,242,555      $3,000,020

    Marketable debt securities                              3,700,575

    Accounts receivable:
       Trade                                                  613,467         431,939
       Other                                                1,299,056       1,043,340
    Inventories                                               374,543         481,592
                                                          -----------      ----------
          Total current assets                             11,230,196       4,956,891
                                                          -----------      ----------
FIXED ASSETS:
    Cost                                                    6,342,171       7,510,239
    Less - accumulated depreciation and amortization        2,907,312       3,486,046
                                                          -----------      ----------
                                                            3,434,859       4,024,193
                                                          -----------      ----------

                                                          -----------      ----------
                                                          $14,665,055      $8,981,084
                                                          ===========      ==========
--------------------------------------------------------------------------------------
</TABLE>




   The accompanying notes are an integral part of the Finanical Statements.

                                     Page 3
<PAGE>

ELECTRIC FUEL CORPORATION
CONSOLIDATED BALANCE SHEETS


<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------
                                                           December 31,         September 30,
                                                               1998                  1999
                                                        -------------------  ------------------
                                                            (Audited)            (Unaudited)
<S>                                                     <C>                  <C>
           LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
    Accounts payable and accruals:
       Trade                                                 $  1,099,352       $  1,538,207
       Other                                                    1,003,522            924,546
Deferred income                                                   136,549
                                                             ------------       ------------
         Total current liabilities                              2,239,423          2,462,753
LIABILITY FOR EMPLOYEE RIGHTS UPON RETIREMENT
    net of amount funded                                        1,844,120          1,514,783
                                                             ------------       ------------
           Total Liabilities                                    4,083,543          3,977,536
                                                             ------------       ------------
STOCKHOLDERS' EQUITY:
Common stock - $0.01 par value;
 authorized - 28,000,000 shares;
 issued - 14,303,387 shares as
 December 31, 1998 a December 30, 1999:
 outstanding - 14,048,054 shares as of
 December 31, 1998 and September 30, 1999:
Preferred stock - $0.01 par value; authorized
 - 1,000,000 shares, no shares outstanding                        143,034            143,034
Additional paid-in capital                                     57,398,814         57,398,814
Accumulated deficit                                           (44,553,027)       (50,103,205)
Accumulated other comprehensive loss                               (1,943)
Treasury stock, at cost (common stock - 255,333 shares)        (1,806,481)        (1,806,481)
Notes receivable from stockholders                               (598,885)          (628,614)
                                                             ------------       ------------
          Total Stockholders' Equity                           10,581,512          5,003,548
                                                             ------------       ------------

                                                             ------------       ------------
                                                             $ 14,665,055       $  8,981,084
                                                             ============       ============
-----------------------------------------------------------------------------------------------
</TABLE>

   The accompanying notes are an integral part of the Finanical Statements.

                                     Page 4
<PAGE>

ELECTRIC FUEL CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)


<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------
                                         Nine months ended September 30,     Three months ended September 30,
                                       ------------------------------------  -------------------------------
                                           1998               1999               1998               1999
                                       ------------       ------------       ------------       ------------
<S>                                   <C>                <C>               <C>                <C>
REVENUES                               $  3,529,328       $  1,901,409       $    677,816       $    781,260
                                       ------------       ------------       ------------       ------------

RESEARCH AND DEVELOPMENT
EXPENSES AND COST OF REVENUES
    Expenses incurred                     7,153,612          6,397,159          1,894,944          2,007,686
    Less - royalty-bearing grants                            1,040,736                               370,500
                                       ------------       ------------       ------------       ------------
                                          7,153,612          5,356,423          1,894,944          1,637,186


SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES                   2,476,615          2,249,691            906,137            719,602
                                       ------------       ------------       ------------       ------------
                                          9,630,227          7,606,114          2,801,081          2,356,788

                                       ------------       ------------       ------------       ------------

OPERATING LOSS                           (6,100,899)        (5,704,705)        (2,123,265)        (1,575,528)

FINANCIAL INCOME  - NET                     379,269            160,544            106,061             37,819
                                       ------------       ------------       ------------       ------------
LOSS  BEFORE TAXES ON INCOME             (5,721,630)        (5,544,161)        (2,017,204)        (1,537,709)
TAXES ON INCOME                              32,453              6,017              5,422
                                       ------------       ------------       ------------       ------------
LOSS FOR THE PERIOD                      (5,754,083)        (5,550,178)        (2,022,626)        (1,537,709)
                                       ============       ============       ============       ============

LOSS PER SHARE  *                      $      (0.41)      $      (0.40)      $      (0.14)      $      (0.11)
                                       ============       ============       ============       ============
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING  *                    13,992,335         14,048,054         14,045,663         14,048,054
                                       ============       ============       ============       ============
------------------------------------------------------------------------------------------------------------
</TABLE>
*  See note 3

   The accompanying notes are an integral part of the Financial Statements.

                                     Page 5
<PAGE>

ELECTRIC FUEL CORPORATION


CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED)



<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------
                                               Common Stock
                                      ------------------------------  Additional paid-in    Accumulated
                                          Shares         Amount            capital            deficit
                                      --------------  --------------  ------------------   -------------
<S>                                   <C>             <C>             <C>                  <C>
BALANCE AT JANUARY 1, 1999                14,303,387        $143,034         $57,398,814    $(44,553,027)

CHANGES DURING THE NINE MONTH
  PERIOD ENDED  SEPTEMBER 30, 1999:
Realization of loss on available
 for sale securities
Accrued Interest on  notes receivable
 from stockholders
Loss                                                                                          (5,550,178)
                                      --------------  --------------  ------------------   -------------
BALANCE AT SEPTEMBER 30, 1999             14,303,387        $143,034         $57,398,814    $(50,103,205)
                                      ==============  ==============  ===================  =============
<CAPTION>
                                        Accumulated other                             Notes receivable
                                        comprehensive loss      Treasury stock        from shareholders            Total
                                      --------------------   -------------------   ------------------------  -----------------
<S>                                   <C>                    <C>                    <C>                      <C>
BALANCE AT JANUARY 1, 1999                         $(1,943)          $(1,806,481)                 $(598,885)       $10,581,512

CHANGES DURING THE NINE MONTH
  PERIOD ENDED  SEPTEMBER 30, 1999:
Realization of loss on available
 for sale securities
Accrued Interest on  notes receivable
 from stockholders                                   1,943                                                               1,943
Loss

BALANCE AT SEPTEMBER 30, 1999                                                                       (29,729)           (29,729)
                                                                                                                    (5,550,178)
                                      --------------------   -------------------   ------------------------  -----------------
                                                                     $(1,806,481)                 $(628,614)        $5,003,548
                                      ====================   ===================   ========================  =================
------------------------------------------------------------------------------------------------------------------------------
</TABLE>

   The accompanying notes are an integral part of the Finanical Statements.

                                     Page 6
<PAGE>

ELECTRIC FUEL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------

                                                                                   Nine months ended September 30,
                                                                                 ------------------------------------
                                                                                       1998               1999
                                                                                 ------------------  ----------------
<S>                                                                              <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES:

Loss for the period                                                                    $(5,754,083)      $(5,550,178)
Adjustments required to reconcile loss to net cash used in operating activities:
    Depreciation and amortization                                                          656,353           578,734
    Amortization of net premium on marketable debt securities                               17,137
    Interest accrued on notes to stockholders                                                                (29,729)
    Liability for employee rights upon retirement net                                         (358)         (329,337)
    Shares issued as compensation for services rendered by directors                        10,750
    Loss on sale of marketable securities                                                      260             1,943
    Capital loss on sale of fixed assets                                                     4,535
    Writedown of fixed assets                                                              442,154
Changes in operating asset and liability items:
    Decrease in accounts receivable                                                        825,530           437,244
    Decrease (increase) in inventories                                                      23,656          (107,049)
    Increase (decrease) in accounts payable and accruals                                  (780,823)          359,879
    Decrease in deferred income                                                           (803,899)         (136,549)
                                                                                 ------------------  ----------------
      Net cash used in operating activities                                            $(5,358,788)      $(4,775,042)
                                                                                 ------------------  ----------------

CASH FLOWS FROM INVESTING ACTIVITIES:
    Purchase of fixed assets                                                              (794,211)       (1,168,068)
    Loans granted to stockholders                                                          (19,158)
    Proceeds from disposal of fixed assets                                                  88,659
    Sale of (purchase of) marketable debt securities - net                              (2,063,832)        3,700,575
                                                                                 ------------------  ----------------
      Net cash provided by (used in) investing activities                              $(2,788,542)      $ 2,532,507
                                                                                 ------------------  ----------------
                                                                                 ------------------  ----------------
FORWARD                                                                                $(8,147,330)      $(2,242,535)
                                                                                 ------------------  ----------------
---------------------------------------------------------------------------------------------------------------------
</TABLE>


   The accompanying notes are an integral part of the Finanical Statements.

                                     Page 7
<PAGE>

ELECTRIC FUEL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)


<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
                                                          NINE MONTHS ENDED
                                                             SEPTEMBER 30,
                                                     --------------------------
                                                          1998          1999
                                                     ------------   -----------
<S>                                                 <C>            <C>
FORWARD                                              $ (8,147,330)  $(2,242,535)
                                                     ------------   -----------
CASH FLOWS FROM FINANCING ACTIVITIES:

  Payment on note receivable from stockholders            147,299
  Proceeds from exercise of options                        90,906
                                                     ------------   -----------

    Net cash provided by financing activities             238,205
                                                     ------------   -----------

DECREASE IN CASH AND CASH EQUIVALENTS                  (7,909,125)   (2,242,535)

BALANCE OF CASH AND CASH EQUIVALENTS AT
  BEGINNING OF PERIOD                                  11,771,816     5,242,555
                                                     ------------   -----------
BALANCE OF CASH AND CASH EQUIVALENTS AT
  END OF PERIOD                                      $  3,862,691   $ 3,000,020
                                                     ============   ===========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW

INFORMATION-CASH PAID DURING THE PERIOD FOR:

    Interest                                         $        736   $    13,506
                                                     ============   ===========

    Income Taxes                                     $     56,659   $    17,973
                                                     ============   ===========
--------------------------------------------------------------------------------
</TABLE>


   The accompanying notes are an integral part of the Financial Statements.


                                     Page 8
<PAGE>

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------------------------------------------------------

1.    The interim financial statements of Electric Fuel Corporation ("the
      Company") reflect all adjustments, consisting only of normal recurring
      accruals, which are, in the opinion of the Company's management, necessary
      for a fair statement of results for the periods presented. Operating
      revenue and expenses for any interim period are not necessarily indicative
      of results for a full year.

      The Company incurred an operating loss of $5.6 million (1998 - $5.8
      million) for the nine months ended September 30, 1999. These financial
      statements assume the Company will realize its assets and discharge its
      liabilities in the normal course of business. The ability of the Company
      to continue its anticipated level of operations is dependent upon its
      ability to obtain adequate sources of financing as required and its
      ability to develop and maintain profitable operations. If the Company is
      unable to obtain such funding or to develop profitable operations, it will
      have to significantly reduce its anticipated future commitments and/or
      progress.

      For the purpose of these interim financial statements, certain information
      and disclosures normally included in the financial statements have been
      condensed or omitted. These unaudited statements should be read in
      conjunction with the audited financial statements and notes thereto for
      the year ended December 31, 1998.

2.    EFFECTS OF RECENT PRONOUNCEMENT

      In June 1998, the FASB issued FAS No. 133, "Accounting For Derivative
      Instruments and Hedging Activities." FAS 133 established a new model for
      accounting for derivatives and hedging activities. FAS 133 requires
      companies to record derivatives on the balance sheet as assets or
      liabilities, measured at fair value. Gains or losses resulting from
      changes in the values of those derivatives would be accounted for
      depending on the use of the derivative and whether it qualifies for hedge
      accounting. FAS 133 is effective for calendar-year companies as from
      January 1, 2001.

      The Company is currently evaluating the impact FAS 133 will have on its
      financial statements; however, since the use of derivatives by the Company
      is limited, it expects that the adoption of FAS 133 will have no material
      impact on its consolidated results of operations, financial position or
      cash flows.

3.    Due to the conversion of certain outstanding management promissory notes,
      the number of shares outstanding at September 30, 1998 for purposes of
      calculating loss per share should have been 13,992,335 rather than
      12,733,250, and accordingly the reported loss per share has been corrected
      to reflect this calculation.

                                     Page 9
<PAGE>

4.    Segment Information
      The following table shows the results of the Company's main segments for
      the first Nine months of 1999 and 1998, and fixed assets at September 30,
      1999, and December 31, 1998.

<TABLE>
<CAPTION>
      1999
      Segment                          Defense & Safety  Electric Vehicle   Consumer Battery     All other         Total
<S>                                    <C>               <C>                <C>                 <C>            <C>
      Revenues from external customers      $915,489        $   879,407         $    74,845     $    31,668    $ 1,901,409
      Direct Expenses                        963,106          2,088,451           2,493,918       2,060,639      7,606,114
                                       --------------   ----------------   ----------------   --------------
      Segment Gross Loss                    $(47,617)       $(1,209,044)        $(2,419,073)    $(2,028,971)   $(5,704,705)
                                       ==============   ================   ================   ==============
      Financial income, net and tax                                                                            $   154,527
                                                                                                              -------------
      Loss                                                                                                     $(5,550,178)
                                                                                                              =============

      Fixed assets, Net                     $355,660        $   891,800         $ 1,776,237     $ 1,000,496    $ 4,024,193
                                       ==============   ================   =================  ==============  =============



<CAPTION>
      1998
      Segment                          Defense & Safety  Electric Vehicle   Consumer Battery     All other         Total
<S>                                    <C>               <C>                <C>                 <C>            <C>
      Revenues from external customers  $  748,088        $ 2,766,195                            $    15,045     $ 3,529,328
      Direct Expenses                    1,113,594          3,963,653           2,040,720          2,512,260       9,630,227
                                       --------------    ---------------    ---------------     --------------
      Segment Gross Loss                $ (365,506)       $(1,197,458)        $(2,040,720)       $(2,497,215)    $(6,100,899)
                                       ==============    ===============    ================    ==============
      Financial income, net and tax                                                                                 $346,816
                                                                                                              ---------------
      Loss                                                                                                       $(5,754,083)
                                                                                                              ===============

      Fixed assets, Net                 $  388,654        $   993,704         $ 1,864,676        $ 1,117,372     $ 4,364,406
                                     ==============   ================   =================      ============  ===============
</TABLE>






                                    Page 10
<PAGE>

The following table shows the results of the Company's main segments for the
third quarter of 1999 and 1998.

<TABLE>
<CAPTION>
1999
Segment                             Defense & Safety   Electric Vehicle   Consumer Battery   All other         Total
<S>                                 <C>                <C>                <C>               <C>            <C>
Revenues from external customers       $330,620          $ 372,613          $  61,768         $  16,259      $   781,260
Direct Expenses                         242,631            691,055            712,683           710,419        2,356,788
                                     -------------     -------------      -------------     -------------
Segment Gross Profit (Loss)            $ 87,989          $(318,442)         $(650,915)        $(694,160)     $(1,575,528)
                                     =============     =============      =============     =============
Financial income, net and tax                                                                                $    37,819
                                                                                                           ---------------
Loss                                                                                                         $(1,537,709)
                                                                                                           ===============


1998
Segment                             Defense & Safety   Electric Vehicle   Consumer Battery   All other         Total
<S>                                 <C>                <C>                <C>               <C>            <C>
Revenues from external customers       $229,088         $  448,195                            $     533      $   677,816
Direct Expenses                         289,594          1,249,653             727,720          534,114        2,801,081
                                     -------------     -------------      -------------     -------------
Segment Gross Loss                     $(60,506)        $ (801,458)          $(727,720)       $(533,581)     $(2,123,265)
                                     =============     =============      =============     =============
Financial income, net and tax                                                                                $   100,639
                                                                                                            ---------------
Loss                                                                                                         $(2,022,626)
                                                                                                            ===============

</TABLE>







                                    Page 11
<PAGE>

                           ELECTRIC FUEL CORPORATION

                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS



     The following discussion and analysis should be read in conjunction with
the financial statements and notes thereto appearing elsewhere in this Quarterly
Report. Amounts reported here have been rounded to the nearest thousand, unless
such amounts are more than 1.0 million, in which event such amounts have been
rounded to the nearest hundred thousand.

Forward Looking Statements

     When used in this discussion, the words "believes," "anticipated" and
similar expressions are intended to identify forward looking statements. Such
statements are subject to certain risks and uncertainties which could cause
actual results to differ materially from those projected. See "Important Factors
Regarding Forward-Looking Statements" attached as Exhibit 99 to the Company's
Annual Report for the year ended December 31, 1998, on Form 10-K and
incorporated herein by reference. Readers are cautioned not to place undue
reliance on these forward-looking statements which speak only as of the date
hereof. The Company undertakes no obligation to publicly release the result of
any revisions to these forward-looking statements which may be made to reflect
events or circumstances after the date hereof or to reflect the occurrence of
unanticipated events.

GENERAL

     During the third Quarter of 1999, the Company continued to focus its
efforts on the development and the commercialization of its disposable ZincAir
batteries for cellular phones. These batteries use the proprietary high-rate
primary zinc-air technology developed by the Company in the last two years for
portable electronic devices.

     Advantages of the ZincAir batteries include the battery's high capacity --
up to 4 times more than typical rechargeable batteries. The batteries are ideal
and convenient for frequent travelers or for outdoor activities where charging
is impractical or impossible. Batteries are charged and ready to use right out
of the pack providing instant power, and are suitable for emergency and backup
applications.

     The Company has signed several distribution agreements with after-market
distributors of cellular accessories, and has received initial orders. Towards
the end of the third Quarter, the Company began shipping batteries to its
distributors.  The Company line of existing products includes batteries for
Nokia 5100/6100/7100 phones and Motorola MicroTAC phones and auxiliary battery
for the Motorola StarTAC.  Batteries for the Ericsson 600/800/1000 series are
planned for the end of the forth quarter.

     Batteries are currently being produced using a manually operated production
line. A custom designed high-capacity automatic line has been ordered as a
turnkey project from an experienced vendor, and is currently in the final stage
of the acceptance test. Delivery to the Company expected during the Forth
quarter.

     During the third quarter, the Company continued to invest in strengthening
its intellectual property position.  The Company has more than 30 patents issued
covering general aspects and various applications of ZincAir technology.  The
Company also filed a significant number of new applications focusing
specifically on ZincAir batteries for consumer electronic devices and
cellphones.

     The Company continues to develop other applications for its disposable
ZincAir batteries, including devices for the telecommunications, medical and
defense markets.

                                       12
<PAGE>

                           ELECTRIC FUEL CORPORATION

     The Safety Products Division of the Company is introducing new emergency
lights for the marine life jackets market, and sales are gradually growing.
Sales of emergency lights for the aviation market are stable with a potential
for an increase, if contracts currently under negotiation will materialize.

     The Electric Vehicle Division is continuing its American all-electric
transit bus development project in Nevada, supported by the Federal Transit
Administration and the Israel-US Binational Industrial Research and Development
(BIRD) Foundation.  The Company is supporting its Italian partner, Edison, with
its effort to establish a 50-100 electric vehicle project in Milan, and is
continuing the effort to establish a consortium to commercialize the technology
in Germany.


RESULTS OF OPERATIONS:
THREE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO THE THREE MONTHS ENDED
SEPTEMBER 30, 1998.

REVENUES

     Revenues for the third quarter of 1999 totaled $781,000 compared with
$678,000 in the comparable period in 1998, an increase of $103,000. Revenues
were $331,000 (1998: $229,000) for the Defense and Safety segment, $373,000
(1998: $448,000) for the Electric Vehicle segment and $62,000 (1998: $0) for the
Consumer Battery segment.

     During the third quarter of 1999, the Company recognized revenues from the
sale of Survivor Locator Lights and sale of consumer batteries, activities
related to the United States Department of Transportation ("DOT") program. In
1998, the Company signed an agreement with DOT as part of a consortium that is
seeking to demonstrate the ability of the Electric Fuel battery system to power
a full size, all electric transit bus. The DOT approved $2.0 million in federal
funding for the cost-shared $4.0 million program. The Company's share of the
$4.0 million cost is approximately $3.5 million, 50% of which will be reimbursed
to the Company out of the DOT funds. Since this is a cost-shared program,
expenses associated with the Company's participation in the program will exceed
the revenues to be earned from the program. The DOT program is expected to
continue until the first quarter of year 2000. Additionally, the Company
recognized revenues in connection with various defense R&D contracts.

     During the third quarter of 1998, the Company recognized revenues from the
sale of Survivor Locator Lights. The Company also recognized revenues from the
sale of additional batteries to the Deutsche Post, and began recognizing
revenues in connection with various defense R&D contracts.

EXPENSES

     Research and development expenses and cost of revenues for the third
quarter of 1999 were $2.0 million compared with $1.9 million for the third
quarter of 1998. The Company believes that, given the Company's stage of
development, it is not, at this time, meaningful to distinguish between R&D
expenses and cost of revenues.

     As previously announced, the Company has entered into an agreement to
complete development of a battery for powering transit buses, in connection with
a program to develop a new hybrid propulsion system in conjunction with General
Electric Corporate Research and Development ("General Electric"). The program is
being partially funded by the BIRD Foundation. The DOT program described above
complements the BIRD program.

                                       13
<PAGE>

                           ELECTRIC FUEL CORPORATION

     R&D expenses were reduced by $370,000 in the third quarter of 1999 as a
result of recognition of grants from the Office of the Chief Scientist of the
Ministry of Industry and Trade and the BIRD Foundation. The Company's 1999 R&D
grant applications have been approved by the Research Committee of the Office of
the Chief Scientist of the Ministry of Industry and Trade. As a result, royalty-
bearing grants of up to $910,000 will be available to the Company during 1999 to
offset R&D expenses. Royalty-bearing grants in the amount of 223,000, was
recognized in the third quarter of 1999. In addition, $147,000 of royalty
bearing grants from the BIRD Foundation were recognized in the third quarter of
1999.

     Selling, general and administrative expenses for the third quarter of 1999
were $720,000 vs. $906,000 in the third quarter of 1998. The decrease was
primarily attributable to reduced salaries and professional fees during the
third quarter of 1999. The Company expects increases in selling, general and
administrative expenses, particularly with respect to marketing expenses, as the
Company expands the applications for its technology.

     Direct expenses for segments for the third quarter were $243,000 (1998:
$290,000), $691,000 (1998: $1.2 million), and $713,000 (1998: $728,000) in the
Defense and Safety, Electric Vehicle and Consumer Battery segments,
respectively.

     The Company reported a net loss of $1.5 million in the third quarter of
1999 compared with a net loss of $2 million in the third quarter of 1998 due to
the factors cited above.

RESULTS OF OPERATIONS:
NINE MONTHS ENDED SEPTEMBER 30, 1999, COMPARED TO THE NINE MONTHS ENDED
SEPTEMBER 30, 1998.


REVENUES

     Revenues for the first nine months of 1999 totaled $1.9 million compared
with $3.5 million in the comparable period in 1998, a decrease of $1.6 million.
The reduction is primarily a result of the Company's reduced activities in the
electric vehicle market and the "start-up" phase of its consumer battery
activities. Revenues were $915,000 (1998: $748,000) for the Defense and Safety
segment, $879,000 (1998: $2.8 million) for the Electric Vehicle segment, and
$75,000 (1998: $0) for the Consumer Battery segment for the first nine months of
the year.

     During the first nine months of 1999, the Company recognized revenues from
the sale of Survivor Locator Lights, Defense R&D contracts, consumer batteries
and activities related to the United States Department of Transportation ("DOT")
program. In 1998, the Company signed an agreement with DOT as part of a
consortium that is seeking to demonstrate the ability of the Electric Fuel
battery system to power a full size, all electric transit bus. The DOT approved
$2.0 million in federal funding for the cost-shared $4.0 million program. The
Company's share of the $4.0 million cost is approximately $3.5 million, 50% of
which will be reimbursed to the Company out of the DOT funds. Since this is a
cost-shared program, expenses associated with the Company's participation in the
program will exceed the revenues to be earned from the program. The DOT program
is expected to continue until the first quarter of year 2000.

     Revenues for the first nine months of 1998 were principally derived from
activities relating to the extension of Deutsche Post Field Test, which
terminated in the second quarter of 1998. Additionally, in 1998, the Company
recognized revenues from the sale of additional batteries to the

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                           ELECTRIC FUEL CORPORATION

Deutsche Post as well as sales of Electric Vehicle batteries to Edison
Termoelettrica, SpA ("Edison"). The Company also recognized revenues from the
sale of Survivor Locator Lights and defense R&D contracts.


EXPENSES

     Research and development expenses and cost of revenues first nine months of
1999 were $6.4 million compared with $7.2 million for the first nine months of
1998. The Company believes that, given the Company's stage of development, it is
not, at this time, meaningful to distinguish between R&D expenses and cost of
revenues. The decrease in expenses of $0.8 million from the first nine months of
1999 is principally attributable to a reduction of expenses and personnel
related to Electric Vehicle battery development. This decrease was partially
offset by the Company's increased costs associated with Consumer Battery
development and production of increased quantities of Survivor Locator Lights in
the Defense and Safety Division in the first nine months of 1999. The Company's
1999 grant applications have been approved by the Research Committee of the
Office of the Chief Scientist of the Ministry of Industry and Trade and royalty
bearing grants have therefore been recognized in the first nine months of 1999
in the amount of $768,000. During the first nine months of 1998, no royalty
bearing grants were recognized, as the 1998 Chief Scientist application was not
approved until later in the year.

     As previously announced, the Company has entered into an agreement to
complete development of a battery for powering transit buses, in connection with
a program to develop a new hybrid propulsion system in conjunction with General
Electric Corporate Research and Development ("General Electric"). The program is
being partially funded by the BIRD Foundation, and the Company recorded $273,000
of royalty-bearing grants in the first nine months of 1999, in connection with
this program. The DOT program described above complements the BIRD program.

     Selling, general and administrative expenses for the first nine months of
1999 were $2.2 million vs. $2.5 million in the first nine months of 1998. The
Company expects selling, general and administrative expenses will increase,
particularly with respect to marketing expenses, as the Company expands the
applications for its technology.

     Direct expenses for segments for the first nine months of the year were
$963,000 (1998: $1.1 million), $2.1 million (1998: $4.0 million), and $2.5
million (1998: $2.0 million) in the Defense and Safety, Electric Vehicle and
Consumer Battery segments, respectively.

     Financial income, net of interest expense, exchange differentials, bank
charges, and other fees, totaled approximately $161,000 in the first nine months
of 1999 compared to $379,000 in same period in 1998.

     The Company reported a net loss of $5.6 million in the first nine months of
1999 compared with a net loss of $5.8 million in the first nine months of 1998
due to the factors cited above.


IMPACT OF YEAR 2000

     The Year 2000 issue is the result of computer programs being written using
two digits rather than four to define the applicable year. Computer programs
that have date-sensitive software may recognize a date using "00" as the year
1900 rather than the year 2000. The Company considers a

                                       15
<PAGE>

                           ELECTRIC FUEL CORPORATION

product to be in "Year 2000" compliance if the product's performance and
functionality will be unaffected by processing of dates prior to, during and
after the year 2000.

     The Company has retained an outside consultant to assess the Year 2000
compliance of the Company's computer hardware and software, and other equipment
of the Company with embedded chips that may be date-sensitive. The consultant
completed its initial assessment of the Company's systems in March 1999. Based
on the initial review of the consultant, the Company believes that its core
computer systems and equipment will be Year 2000 compliant, and that the Year
2000 issue will not materially affect the Company's operations or business.
Management expects that the expenses incurred and to be incurred in connection
with the Year 2000 issue will not materially exceed amounts budgeted for such
matters.


LIQUIDITY AND CAPITAL RESOURCES

     As of September 30, 1999, the Company had cash, cash equivalents and
financial investments of approximately $3.0 million compared with $8.9 million
as of December 31, 1998.

     The Company used available funds in 1999 primarily for continued research
and development expenditures, and other working capital needs. The Company
increased its investment in fixed assets by $1.2 million primarily in the
automatic product line of disposable ZincAir cells for cellphone batteries,
during the nine months ended September 30, 1999.

     EFL presently has a line of credit with the First International Bank of
Israel Ltd. ("FIBI") ("the Credit Facility"). Borrowings under the Credit
Facility bear interest at FIBI's prime rate + 2% per annum, are unconditionally
guaranteed by the Company and are secured by a pledge of foreign currency
deposits in the amount of NIS 750,000 (approximately $175,000). Additionally,
the Credit Facility imposes financial and other covenants on EFC and EFL and
presently expires on December 16, 1999. As of September 30, 1999, the bank had
issued letters of credit and bank guarantees totaling approximately $381,000.

     The Company has no long term debt outstanding, and is using its cash
reserves and revenues from operations primarily to continue development of
batteries for consumer electronic devices, as well as to participate in the BIRD
and DOT Electric Vehicle programs and Chief Scientist grant. Furthermore, as
previously announced in July 1999, the Company entered into a three - year
exclusive distribution contract with the Banner Telecom group for Electric
Fuel's line of ZincAir cellular phone batteries. The Company also entered into
additional distribution agreements with cellular accessories after market
distributors in several other countries. The Company has received orders from
these distributors and begun initiating battery deliveries at the end of the
third quarter. In order to manufacture the quantities envisioned under these
agreements, the Company will have to operate its automatic production line,
which has already been ordered. Accordingly, the Company is seeking additional
funding, including increasing of its credit lines with the banks and through the
issuance of equity or debt securities to put this automated production line into
operation and continue its operations. At the same time, the Company is pursuing
other options, such as joint ventures or other strategic relationships. However,
there can be no assurance that the Company will obtain any such additional
funding. If additional funding is not secured, the Company will have to modify,
reduce, defer or eliminate certain of its anticipated future commitments and/or
programs.

                                       16
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PART II



ITEM 6.

 1. No reports on Form 8-K were filed during the first nine months of 1999.

                                    Page 17
<PAGE>

--------------------------------------------------------------------------------

                                  SIGNATURES



Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                           ELECTRIC FUEL CORPORATION
                                               (Registrant)

                                       By:  /s/  Robert S. Ehrlich
                                            ----------------------
                                         Name:  Robert S. Ehrlich
                                         Title:  Chairman of the Board and
                                                 Chief Financial Officer


Dated:  November 9, 1999

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