Police said the car exploded in the central part of the city after a bomb apparently was detonated by a motorcyclist nearby, Haaretz reported.
A preliminary investigation indicated the explosion was an assassination attempt that targeted criminal Nissim Alperon of the Tel Aviv's third-largest crime family, police said.
Witnesses said a black Mazda burst into flames and a nearby empty bus was also hit in the explosion.
Alperon reportedly was in the car just before the blast and escaped unhurt, Haaretz said.
If Thursday's explosion was an assassination attempt, it would be the eighth targeting Alperon in the past last 12 years, the newspaper said. He survived an attempt on his life in June, when a bomb exploded in his car.
His brother, Yaakov Alperon, was assassinated by a car bomb in 2008 in Tel Aviv.