pgp.JPGLarge auto makers Nissan Motor Co. and Renault SA have entered a partnership to develop an all-electric car to be distributed first in Israel, then in other countries, working in collaboration with Shai Agassi’s Palo Alto-based startup Project Better Place.

PBP recently amassed $200 million in venture investments but only disclosed a vague plan to lease out batteries and electric cars, as well as provide charging stations for them. Its near-term plans now seem more concrete; in the Israeli project, it will work alongside the government to develop a grid of 500,000 charging stations.

Agassi’s partnership with Israel looks like an especially canny business decision for more than one reason. The government has strong motivation to see his project succeed — the country, surrounded on every side by hostile oil-rich states, has few natural resources of its own.

Additionally, with its small size and short commute distances, Israel is especially well-suited to the electric car business. The first model the Nissan/Renault partnership will build is planned to have a 60 mile range for city driving, or 100 miles on the highway, and a top speed of about 70 miles per hour.

If the plan is successful, other small countries, like Denmark, will be next on the list.

Notably, the manufacturers stated that they want the car to be as “normal as possible,” in order to reach a mass market with sales of ten to twenty thousand vehicles a year in Israel.

The vehicles themselves will eventually be exported to the United States. However, replacing our gasoline-based transportation infrastructure would take a great deal more than a $200 million investment.