Israel’s Better Place, the leading electric vehicle services provider, signed a Memorandum of Understanding (MOU) yesterday with Chery Automobile, China’s largest independent auto producer and exporter, to collaborate on electric vehicle technology in the world’s largest auto market.

Under the terms of the MOU, Better Place and Chery will jointly develop switchable-battery EV prototypes with the goal of securing regional Chinese government EV pilot projects.

“With only two percent of China’s population owning cars and 80% of sales in 2009 to first-time car buyers, China has the opportunity to create and lead an entirely new category around clean transportation,” says Dan Cohen, Vice President of Strategic Initiatives for Better Place.

“With the scale of Chery’s design and manufacturing capability and an industrial policy that favors EV over ICE, we believe China represents an unprecedented opportunity for Better Place,” Cohen adds.

China’s industrial objective is to become the largest EV developer and manufacturer in the world, to enable the country to leapfrog internal combustion engine (ICE) technology and go straight to electric transport.

China is the world’s second-largest consumer of oil behind the US, which historically has led the ICE vehicle market, and ahead of Japan, the leader in hybrid technology.