Israel’s largest bus operator is going into business with a Chinese state-owned manufacturer designated by the Pentagon as a Chinese military company and restricted under separate U.S. transit-procurement legislation.

Egged Group and Auto Chen Mobility, part of the Belilios Group, announced Thursday that they are forming a joint venture with CRRC to import, market and sell the Chinese manufacturer’s buses. Egged said the goal is to build a full, long-term operation around CRRC products in Israel while working with the company to enter additional European markets.

Despite how the agreement has been described, this is a distribution and service venture—not a bus-manufacturing operation, at least for now.

The scale of the Chinese partner is the headline. CRRC was created in 2015 through the merger of CNR and CSR and now operates in more than 100 countries through 46 subsidiaries, employing more than 150,000 people.

The state-owned company generated approximately $38 billion in revenue last year, earned about $2 billion in profit and invested roughly $3 billion in research and development. It has sold more than 85,000 buses since entering the segment in 2006 and produced approximately 6,000 during 2025 alone.

Each partner brings a specific advantage. Auto Chen has delivered more than 4,000 Golden Dragon buses in Israel over the past decade and understands the country’s import, sales and service infrastructure.

Egged contributes experience operating large transportation fleets in Israel and Europe. Its European holdings include Mobilis in Poland, EBS in the Netherlands and a majority stake in Lithuania’s TOKS, giving the new venture an existing operational base from which to pursue European contracts.

CRRC vehicles are already beginning to reach Israel. Its electric-vehicle division has shipped minibuses to the country, while a 26-meter bi-articulated bus is expected to arrive under a Transportation Ministry tender. The vehicle is scheduled to be operated by Superbus on the Haifa Metronit system.

Executives involved in the partnership have also identified autonomous vehicles as a longer-term opportunity.

The complication is CRRC’s ownership and status in Washington.

The company is owned by the Chinese government and appears on the Pentagon’s list of Chinese military companies. Under Section 805 of the 2024 National Defense Authorization Act, the Defense Department is prohibited from entering into, renewing or extending certain contracts with companies on that list.

Congress separately enacted the Transportation Infrastructure Vehicle Security Act in 2019, restricting the use of federal transit funding to purchase buses and rail cars from Chinese state-owned or controlled manufacturers.

CRRC’s growing role in Israeli transportation has previously drawn scrutiny. In 2022, Chinese companies lost a major Tel Aviv light-rail contract amid reported American pressure and security concerns raised in both Israel and the United States. CRRC later became involved in a separate controversy surrounding the procurement of trains for Jerusalem’s Blue Line.

This agreement is different because it is being formed by commercial transportation operators and initially involves buses rather than the construction of a government rail network. U.S. transit-procurement restrictions do not govern purchases made for Israeli fleets without American federal funding.

Nevertheless, modern electric buses contain connected systems—including cameras, telematics and remotely updated software—that Israeli regulators may examine as the venture expands.

For Egged, the commercial calculation is straightforward: Chinese electric buses are competitively priced, readily available and increasingly capable, while European transportation tenders are often decided heavily on cost.

The unanswered question is whether Israeli regulators—and American officials monitoring the transportation infrastructure of a close ally—will view the partnership strictly as a commercial venture or as part of a broader strategic concern surrounding Chinese technology.

JBizNews Desk | Tel Aviv

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