Israel Corporation Ltd., a holding company controlled by the Ofer family, said Sunday an auto-making joint venture it has with China's Chery Automobile Co. will accelerate development of electric cars and cut investment.

Israel Corp. and Chery will spend $500 million in Chery Quantum Auto Co., down from a previously planned $900m., the Israeli partner said in a statement to the Tel Aviv Stock Exchange Sunday. Development will begin now, it said.

"The business plan for the joint venture is being adapted to the central changes in the global automobile industry, which is seeing the growing weight and importance of electric-powered cars," Israel Corp. said.

China has encouraged domestic automakers to develop alternative-energy vehicles to curb oil imports and pollution, as well as to help the local industry challenge General Motors Corp. and Toyota Motor Corp. overseas. Chery Automobile, China's largest maker of own-brand cars, unveiled its first plug-in hybrid February 20.

The venture will cut the number of models in development and delay construction of a plant, Israel Corp. said.

Israel Corp. said that under the new investment program, its stake in the joint venture would grow to 50 percent from 45%, while Chery's will fall to 50%. Because it will develop fewer models, the venture would initially use the existing capacity of Chery Automobile, the company said.

Over the next two years, neither partner would have to invest more than the $200m. they have already transferred to the venture, Israel Corp. said. The next transfer of cash, for $40m., would only be required in 2011 and may not be needed at all, Israel Corp. said. Israel Corp. would not have to provide its share of $180m. in guarantees it committed to the venture, it said.