ID: aiam4238

Dear Mr. Humes: Thank you for your letter to Stephen Oesch of my office concerning th effect of our regulations on the conversion of hardtop vehicles into convertibles. You explained that your company will be performing such conversions on new Cadillac Sedan De Villes and you are specifically concerned about how Standards No. 208, *Occupant Crash Protection*, and Standard No. 209, *Seat Belt Assemblies*, would affect such conversions. I regret the delay in our response.; Under the National Traffic and Motor Vehicle Safety Act, eac manufacturer is required to certify that its vehicles comply with all applicable Federal Motor Vehicle Safety Standards. Under Part 567.7 of the agency's certification regulation, a copy of which is enclosed, a person who alters a new vehicle prior to its first sale to the consumer must certify that the vehicle, as altered, still conforms with all applicable standards. Thus, your company would have to certify that the vehicle you have altered into a convertible still complies with all applicable standards.; In the case of Standard No. 208, S4.1.2.3.2 of the standard permit convertibles to have either a lap or lap/shoulder belt at each front outboard designated seating position. Thus, when you alter a hardtop passenger car, you may remove the lap/shoulder belt and replace it with a lap belt that meets the requirements of S4.1.2.3.2.; Please note that beginning on September 1, 1986, manufacturers mus begin phasing-in the installation of automatic restraint systems, such as automatic belts and airbag systems, in their vehicles. For example, S4.1.3.1 of Standard No. 208 requires manufacturers to install automatic restraints in ten percent of their passenger cars manufactured on or after September 1, 1986, and before September 1, 1987. The agency has temporarily excluded convertibles from the automatic restraint requirement during the phase-in period. Instead of automatic restraints, convertibles may have either a manual lap or lap/shoulder belt.; Please note that the agency's final decision in the ongoing rulemakin on applying the automatic restraint requirement to convertibles may affect the conversion of hard-top cars into convertibles in subsequent years. If the agency does not exempt convertibles permanently from the automatic restraint requirement, then a person changing an automatic restraint equipped hardtop car into a convertible would have to ensure that the altered cars still complied with the automatic restraint requirement. Likewise, if the agency applied a dynamic test requirement to the manual safety belts used in convertibles, a person altering an automatic restraint equipped hardtop car into a convertible would have to either retain the automatic restraints or equip the altered vehicles with manual safety belts meeting the dynamic test requirements.; If you have any further questions, please let me know. Sincerely, Erika Z. Jones, Chief Counsel

ID: aiam4671

"Dear Mr. Johnston: This responds to your letter reporting a change i the locking system to be installed on the MY 1991 British Sterling car line. Although your letter does not explicitly request the agency determine that the change is of a de minimis nature and that therefore the Sterling vehicles containing the change would be fully covered by the previously granted exemption for Sterling vehicles, we are treating the letter as making such a request. The alternative to making such a request is to submit a modification petition under 49 CFR 543.9(b) and (c)(2). As you are aware, the Sterling car line was granted an exemption, pursuant to 49 CFR Part 543, from antitheft marking because Austin Rover showed that the antitheft device to be used in lieu of marking on the car line was likely to be as effective as parts marking. This exemption was issued on July 16, 1986, and appeared in the Federal Register on July 22, 1986 (51 FR 26332). In your letter, you stated that beginning with the start of MY 1991, Sterling Motor Cars (Sterling) plans an improvement in the antitheft device that is standard equipment on the Sterling vehicle. The change involves the consequence of opening of the trunk when the system is armed. Currently, the system, once armed, activates when the trunk is opened, even if it is opened with the key. In order to avoid this, the antitheft device must first be disarmed before the trunk is opened. It is our understanding that Sterling plans to change the system by allowing the system to be disarmed by opening the trunk with a key and rearmed by closing the trunk lid. However, if the trunk were to be forced open without a key, the alarm would still be activated. After reviewing the planned change to the antitheft device on which the exemption was based, the agency concludes that the change is de minimis. While the change means that opening the trunk with a key will no longer activate the alarm, the agency does not believe that activating the alarm under those circumstances contributes to theft prevention. The agency concludes that the antitheft device, as modified, will continue to provide the same aspects of performance provided by the original device and relies on essentially the same componentry to provide that performance. Therefore, it is not necessary for Sterling to submit a petition to modify the exemption pursuant to 543.9(b) and (c)(2). If Sterling does not implement the new antitheft device as described in your letter, or delays implementation until after MY 1991, we request that Sterling notify the agency of such decisions. Sincerely, Barry Felrice Associate Administrator for Rulemaking";

ID: 18475-2.drn

Dear <Confidential>

This responds to your letter requesting an interpretation of how S5.1 of Standard No. 214, Side impact protection applies to your company's planned passenger car with a new side door system feature. As explained below, the Thoracic Trauma Index (TTI(d)) for the car must not exceed the 90 g requirement applicable to passenger cars with two side doors.

Your new side door system feature can generally be described as follows:

The side door system is that of a conventional 2-door vehicle with certain variations. The front portion of the side door system is identical in structure to that of the side door on a conventional 2-door vehicle. Access to the rear seat is possible using the front portion of the side door system alone. The side door system also includes a narrow rear access door panel. This panel cannot be opened independently of the front portion of the side door system. There is no structure between the front portion of the side door system and the rear access door panel.

I note that this type of side door system could be used on one or both sides of a vehicle. For ease of discussion, we will address the situation where it would be used on both sides. However, our interpretation would not differ if the system is used on one side of a vehicle.

Standard No. 214's dynamic performance requirements are set forth in paragraph S5. The performance requirements for passenger cars differ for 2-door cars and 4-door cars. More specifically, under S5.1, the Thoracic Trauma Index (TTI(d)) may not exceed 85 g for passenger cars with four side doors, and 90 g for passenger cars with two side doors.

The issue raised by your letter is whether passenger cars equipped with your new side door system would be considered 2-door cars or 4-door cars for purposes of S5.1. Put another way, the issue is whether the front portion of the side door system and the rear access panel would be counted as separate doors in determining whether the vehicle is a 2-door car or 4-door car.

We note that this issue is not directly addressed by the language of Standard No. 214. Among other things, the standard does not include a definition of "door." It is therefore especially appropriate, in interpreting the standard, to look to the purposes behind the different performance requirements for 2-door cars and 4-door cars.

In the preamble to the final rule establishing the different performance requirements for 2-door cars and 4-doors (see 55 FR 45722; October 30, 1990), the agency provided the following explanation:

Another important issue, however, is technological feasibility. In particular, based on its review of the record, NHTSA is concerned about the ability of manufacturers to achieve TTI(d) lower than 90 g for all of their two-door cars, and lower than 85 g for all of their four-door cars.

NHTSA believes that it is generally more difficult for manufacturers to achieve lower TTI(d) for two-door cars than for four-door cars. The reason for this is that the side structure and geometry of two-door cars is different from four-door cars. For example, since the door on a two-door model is typically wider than on a four-door model, it is more difficult to design as strong a structure for the door on the two-door model. Taking into account the confidential data submitted by the manufacturers and other available data, the agency has six sets of data on two-door and four-door versions of the same model. These data indicate that the driver dummy injury measurements in a two-door car are about 14 percent higher than in a four-door car. NHTSA also observes that of 22 two-door cars for which the agency has data, only one had driver TTI(d) less than 80, only two had less than 85 g, and only five had less than 90 g.

(55 FR 45746-45757.)

The primary rationale for the slightly higher TTI(d) limit for 2-door cars was thus the difference in side structure and geometry of 2-door cars and 4-door cars, including but not limited to the wider doors typically used for 2-door cars.

The side structure and geometry of the car design at issue is comparable to that of a typical 2-door car rather than a 4-door car. As discussed above, the front portion of the side door system is identical in structure to that of a conventional 2-door vehicle, and access to the rear seat, using the front portion of the side door system alone, is possible. The front portion of the side door system, by itself, thus has the width of the wider doors typically used for 2-door cars. Moreover, there is no structural component between the front portion of the side door system and the rear access door panel.

Given that it is unclear from the language of Standard No. 214 whether the rear access door panel should (considering its small size) cause the vehicles in question to be regarded as 4-door cars, and given the new side door system has the same characteristics that led the agency to establish a slightly higher TTI(d) limit for 2-door cars, the agency concludes that the vehicles should be considered 2-door cars for purposes of determining S5.1's applicable TTI(d) limits.

I note that because this interpretation is based in large part on the policy determinations behind establishing different TTI(d) limits for 2-door and 4-door cars, it should not be viewed as precedent for how we would interpret the term "door" in other contexts.

NHTSA grants your letter's request for confidential treatment of certain information and will keep the identity of your company confidential. The information in publicly available copies of the letter will be redacted.

I hope this information is helpful. If you have any further questions, please contact Dorothy Nakama of my staff at this address or at (202) 366-2992.

Sincerely,
Frank Seales, Jr.
Chief Counsel
ref:214
d.10/1/98

ID: nht87-2.95

TYPE: INTERPRETATION-NHTSA

DATE: 09/18/87

FROM: AUTHOR UNAVAILABLE; Erika Z. Jones; NHTSA

TO: J. Douglas Hand -- General Motors Legal Staff

TITLE: FMVSS INTERPRETATION

ATTACHMT: 10/15/87 letter from Erika Z. Jones to G.T. Doe (Std. 208; Std. 216); 2/5/87 letter from G.T. Doe to Erika Z. Jones (occ 176)

TEXT:

J. Douglas Hand, Esq. Legal Staff General Motors Corporation P.O. Box 33122 Detroit, MI 48232

This responds to your letter seeking an interpretation of Standard No. 208, Occupant Crash Protection (49 CFR S571.208). Specifically, you asked whether General Motors Corporation (GM can be deemed the manufacturer of passenger cars produced by Lotus Car s Limited (LCL) for the purposes of S4.1.3.5, the manufacturer attribution provisions of Standard No. 208. After we received your letter, you made us aware of certain changed circumstances. In your letter, you stated that GM did not own the entity that w as the exclusive importer of Lotus Vehicles, and that GM owned 96 percent of LCL. Subsequently, you have told us that GM wholly owns the companies that import and market Lotus vehicles in the United States and that GM wholly owns LCL. This letter of inte rpretation is based on the GM -Lotus corporate relationship described in this letter. To the extent that the description in this letter differs from the description set forth in your August, 1986 letter, if reflects our understanding of the change circum stances. Our conclusion is that, since GM sponsors the importation, distribution, and marketing of these cars, GM may be considered the manufacturer of cars produced by LCL for the purposes of standard No. 208.

You explained that LCL is a part of Group Lotus, a United Kingdom company that provides engineering services to various motor vehicle manufactures and produces fewer than a thousand passenger cars a year. Group Lotus is a wholly-owned subsidiary of GM, a lthough LCL designs, builds, and certifies its cars without GM's advice. Approximately 200 Lotus Performance Cars, Limited Partnership (LPC), a wholly-owned subsidiary of GM. Lotus cars are marketed and distributed in the United States by Lotus Cars USA, Inc., another wholly-owned subsidiary of GM. Hence, GM owns the company that designs and assembles these cars, and GM owns the companies that import and market the vehicles.

Section 102(5) of the National Traffic and Motor Vehicle Safety Act (15 U.S.C. 1391(5)) defines "manufacturer" as many person engaged in the manufacturing or assembling of motor vehicles or motor vehicle equipment, including any person importing motor ve hicles or motor vehicle equipment for resale." Under this definition, both LCL and LPC are statutory manufacturers of Lotus passenger cars. LCL designs and assembles the cars, and has filed a designation of agent for service of process with this agency, pursuant to 15 U.S.C. 1399(e). By filing a designation of agent, LCL has acknowledged that it is offering its cars for importation into the United State. LPC imports those cars into the United States.

Section S4.1.3.5 of Standard No. 208 sets forth provisions for instances in which passenger cars have more than one statutory "manufacturer." That section provides that the manufacturers may execute an express written contract to specify the manufacturer s to which the cars shall up attributed. In the absence of such a contract, S4.1.3.5.1(a) provides that imported passenger cars will be attributed to the importer. Since there is no such contract in this instance, application of this provision means that the Lotus passenger cars, which are produced in the United Kingdom, would be attributed to LPC, the GM subsidiary which imports the cars into the United States.

In the April 11, 1985, proposal to establish attribution requirements in the case of vehicles that have more than one statutory "manufacturer" (50, FR 14589), NHTSA stated that it considers the statutory definition of "manufacturer" to be sufficiently br oad to include sponsors, depending on the circumstances. See 50 FR 14596. The agency stated that if a sponsor contracts for another manufacturer to produce a design exclusively for the sponsor, the sponsor may be considered the manufacturer of those vehi cles, applying basic principles of agency law. On the other hand, the agency stated that the mere purchase of vehicles for resale by a company which also is a manufacturer of motor vehicles does not make the purchaser the manufacturer of those vehicles.

Applying these principles to your case, we conclude that GM sponsors the importation of the Lotus vehicles. Both LCL, the actual assembler, and LPC, the actual importer, are wholly-owned subsidiaries of GM. By itself, GM's ownership of both the producer and importer of these care might not be sufficient to establish that GM was the sponsor of these vehicles for the purposes of Standard No. 208. In addition, however, another GM wholly-owned subsidiary distributes and markets the vehicles in the United St ates. GM coordinates the activities of all these subsidiaries. Since GM wholly owns the actual producer of these vehicles and is actively involved in the importation, distribution, and marketing of these vehicles, we believe that GM should be considered to sponsor the importation of the Lotus vehicles. Accordingly, GM rather than LPC, may be considered the importer and manufacturer of these vehicles.

If you have any further questions, please let me know.

Sincerely.

Erika Z. Jones

Chief Counsel

August 29, 1986 Erika Z. Jones, Esq. Chief Counsel National Highway Traffic Safety Administration 400 Seventh Street, S.W. Washington, DC 20590

Dear Ms. Jones:

Re: Interpretation of Multiple Manufacturer

Provision of FMVSS 208 Phase-In

This letter is written to request an interpretation of S4.1.3.5 of FMVSS 208. As you will recall, this portion of the standard provides that where more than one manufacturer is involved in the production of a passenger car, the manufacturers are permitte d to determine between or among themselves, by express written contract, which of them shall be deemed the manufacturer of the vehicle for purposes of meeting the phase-in requirements of FMVSS 208. In the absence of such an agreement, domestic passenger cars produced by more than one manufacturer are attributed to the manufacturer marketing the vehicles, and imported ones are attributed to the manufacturer importing them.

The specific subject matter of the interpretation we are requesting in this letter was discussed at a meeting held at the NHTSA on August 27, 1986. Messrs. Wood, Oesch, and Vinson of your staff represented the agency; Mr. R. F. Humphrey of General Motors Washington Office and I represented GM; and Mr. G. E. Atkin represented Lotus Cars Limited. After a discussion of the issues involved, the members of your staff suggested that a written request for interpretation would be appropriate. This letter is a r esult of that suggestion. The facts comprising the issue we are concerned with, and our specific request for an interpretation of the phase-in provisions of FMVSS 208, are as follows.

Lotus Cars Limited (Lotus) is part of Group Lotus, a United Kingdom firm that provides engineering services to various motor vehicle manufacturers and itself produces several hundred passenger cars each year. Lotus passenger cars are imported into the Un ited States under a contract between Lotus and Lotus Performance Cars (LPC), an American limited partnership. The contract gives LPC the exclusive right to distribute Lotus passenger cars in the United States, and LPC is the importer of record of Lotus p assenger cars. GM has recently purchased substantially all of the shares (approximately 96 percent) of Group Lotus. Neither GM nor Lotus owns any interest in LPC.

Of the somewhat less than 1,000 passenger cars produced by Lotus each year, approximately 200 are imported into the United States. In light of this fact, the phase-in requirements of FMVSS 208, which would obligate Lotus to install passive restraints on approximately 20 vehicles in model year 1987, 50 vehicles in 1988, and 80 vehicles in 1989, can be seen to impose an inordinate financial burden on Lotus.

The multiple manufacturer provision of FMVSS 208 was promulgated to give manufacturers the flexibility to deal with the uncertainties and anomalies created by the phase-in scheme for passive restraint requirements. In furthering this purpose, we believe that the agency should use reasonable flexibility in its interpretation of statutory and regulatory terms and definitions, viewing the business arrangements between manufacturers so as to fulfill the intent of the multiple manufacturer provision.

It is clear that Lotus, the designer and producer of Lotus passenger cars, is a manufacturer of those cars under the Safety Act and safety standards. It is also clear that LPC, the importer of Lotus passenger cars, is a statutory manufacturer. The interp retation we request from the agency is that General Motors, by virtue of its nearly total ownership of Lotus, may also be deemed a manufacturer of Lotus passenger cars for purposes of the multiple manufacturer provision of FMVSS 208.

Because it owns 96 percent of the shares of Group Lotus (an ownership level which will reach 100 percent within the foreseeable future), GM has a substantial and abiding concern in the long-term viability of Lotus, a concern that extends to the extraordi nary difficulties imposed upon Lotus by the phase-in provisions of the passive restraint rule. By permitting GM to substitute its vehicles for those of Lotus in determining compliance with the phase-in requirements, the NHTSA would do no violence to the language or spirit of the Safety Act, which is expansive enough to encompass the changing business relation-ships among manufacturers. The agency would also be fulfilling the intent of the multiple manufacturer provision of FMVSS 208, and would be rectif ying a particularly egregious example of the kind of inequity implicitly recognized by the adoption of the multiple manufacturer provision. Finally, this interpretation would not result in any reduction in the number of vehicles required to be equipped w ith passive restraints during the phase-in period. For all these reasons, we ask that the NHTSA issue the interpretation of the multiple manufacturer provision of FMVSS 208 that we have requested.

The other issue discussed during the August 27 meeting was the situation of Lotus in the event that the agency finds itself unable to concur with the interpretation of FMVSS 208 that I have outlined above. Lotus has concluded that if the agency is unable to issue our requested interpretation, Lotus finds it necessary to file a petition for exemption from the first year of the phase-in requirements of FMVSS 208 (that is, the requirement that 10 percent of the vehicles produced by each manufacturer during the period September 1, 1986 through September 1, 1987 be equipped with passive restraints). We are therefore enclosing with this letter a petition by Lotus for exemption from those requirements, as prescribed in 49 CFR Part 555. If the NHTSA is able to render the interpretation of FMVSS 208 that we have requested, the enclosed petition will be moot, and in that case, GM and Lotus request that the agency disregard the petition. If, however, the agency does not issue the interpretation we have requested above, Lotus requests that the agency act upon the enclosed petition and determine Lotus' entitlement to an exemption as expeditiously as possible.

If you have any questions about our request for an interpretation of FMVSS 208, please direct them to me. If the enclosed petition is not rendered moot by your interpretation of FMVSS 208, and you have any questions about the petition, please direct them to Mr. Graham Atkin of Lotus. Thank you for your attention to this matter.

Sincerely, J. Douglas Hand JDH: kt Attorney

Enclosure

ID: aiam4069

Dear Mr. Metzger: Thank you for your letter of October 14, 1985, asking several question about Standard No. 208, *Occupant Crash Protection*. I hope that the following discussion answers your questions.; You first asked for a clarification of S4.1.3.1.2. That sectio provides that a manufacturer must equip a specific amount of its vehicles manufactured on or after September 1, 1986, and before September 1, 1987, with automatic restraints. The amount must not be less than 10 percent of the average annual production of passenger cars manufactured for sale in the United States during the period September 1, 1983, to August 31, 1986 (the base period).; You explained that your client did not produce any vehicles for th U.S. during one year of the base period (September 1, 1983 - September 1, 1984). For the other two years of the base period, your client produced a limited number of vehicles for sale in the U.S. You asked whether in calculating the average yearly production for the base period, it is correct for your client to use zero for the production between September 1, 1983 and August 31, 1984, and the actual production figures for two subsequent years.; The three year base period addresses a situation where a manufacture has produced vehicles for sale in the U.S. in each of those years. The purpose of averaging the production is to ensure that the calculation of the percentage of a manufacturer's passenger cars that must comply with the automatic restraint requirements is based on a production figure which is representative of the manufacturer's typical production. In the case of a manufacturer who has produced vehicles for two of those years, it would defeat the purpose of the rule to allow the manufacturer to lower artificially the number of vehicles which must comply with the automatic restraint requirement by counting its production as zero for one of the base years. Thus, in a situation where a manufacturer has only two years of production, the manufacturer should calculate its base period average based on the number of vehicles produced during those two years.; To provide manufacturer's with additional flexibility in calculatin the number of passenger cars which must be equipped with automatic restraints, NHTSA proposed, on April 12, 1985 (50 FR 14589), an amendment to Standard No. 208 which would give manufacturers the option of using either a three year average or the actual production for the model year in question. We expect to issue shortly a final rule on this subject.; You also asked for another clarification of S4.1.3.1.2. You asked i the required number of vehicles can be produced anytime (sic) between September 1, 1986 and August 31, 1987. S4.1.3.1.2 does not require that the automatic restraints be installed at any specific time during that period. Thus, you are correct that the installation of automatic restraints does not have to be evenly distributed throughout that 12 month interval.; I hope this information is of assistance to you. If you have an further questions, please let me know.; Sincerely, Erika Z. Jones, Chief Counsel

ID: nht94-4.90

TYPE: INTERPRETATION-NHTSA

DATE: November 29, 1994

FROM: Michael Love -- Manager, Compliance, Porsche Cars North America, Inc.

TO: Chief Counsel, NHTSA

TITLE: Re: Request for Interpretation - 49 CFR 591

ATTACHMT: ATTACHED TO LETTER DATED 12/22/94 FROM PHILIP R. RECHT TO MICHAEL LOVE (A42; PART 591; PART 592; PART 593)

TEXT: Porsche Cars North America, Inc. ("Porsche Cars N.A.") is the authorized importer and distributor of Porsche vehicles in the United States. Effective 1/1/95, Porsche Cars N.A. will become the authorized importer and distributor of Porsche vehicles in Ca nada. All Porsche vehicles for Canada are built as close as possible to U.S. specification vehicles, while still complying with Canadian law, resulting in only minor (if any) differences on the various models due to the similarity of the laws in both co untries.

Currently Porsche Cars N.A. imports all U.S. vehicles into Charleston, South Carolina, where they are processed at its Pre-Delivery Inspection (PDI) facility. The processing consists of removing the protective shipping material, cleaning the vehicle, in specting for proper operation of all systems and making any repairs. Porsche believes it is permissible to also import all the vehicles for the Canadian market into the U.S. and process them at the PDI facility in Charleston before exporting them to Can ada under the provision of 49 CFR 591.5(c), which states:

(c) The vehicle or equipment item does not comply with all applicable Federal motor vehicle safety, bumper, and theft prevention standards, but is intended solely for export, and the vehicle or equipment item, and the outside of the container of the e quipment item, if any, bears a label or tag to that effect.

Does NHTSA agree with this?

Due to the small volume of vehicles sold by Porsche Cars N.A. in the U.S. and Canada and the large number of options available on the vehicles, we foresee the possibility that a Canadian vehicle with a unique combination of options might be sought by a U .S. customer. Porsche Cars N.A. would like to be able to convert such a Canadian specification car to U.S. specification before it has been retail sold. This would include conversion of all equipment and labels so that the vehicle would be in complianc e with all applicable U.S. requirements before it was released from Porsche Cars N.A.'s control.

Porsche Cars N.A. believes this would be permissible for cars imported under provision of 49 CFR 591.5(c) (as discussed above) and still in the U.S. under Porsche Cars N.A. control. Does NHTSA agree with this? Similarly, Porsche Cars N.A. believes it w ould be possible to bring a Canadian vehicle back from Canada (once it has already been processed in the U.S. and exported to Canada) into the U.S. and convert it to U.S. specification, as long as it has not been retail sold and has remained under Porsch e Cars N.A. control. Does NHTSA also agree with this?

If NHTSA does not agree with Porsche Cars N.A. interpretations as stated above, what does NHTSA see as the options available to Porsche Cars N.A. to import and process Canadian specification cars in the U.S.?

Since Porsche Cars N.A. will assume responsibility for importing Canadian vehicles as of January 1, 1995, we would appreciate an answer from NHTSA on these questions as soon as possible.

ID: aiam4399

Dear Ms. Brown: This responds to your letter seeking confirmation of your understandin of Standard No. 208, *Occupant Crash Protection*, as it relates to convertibles. You asked that we verify your understanding in two specific areas. These were:; 1. NHTSA has decided to exempt convertibles from the automati restraint requirements set forth in Standard No. 208 for passenger cars during the phase-in period (September 1, 1986 to August 31, 1989).; This statement is correct. In a final rule published October 17, 198 (51 FR 37028, copy enclosed), the agency announced its decision to exempt convertibles from the automatic restraint requirements for passenger cars during the phase-in period. In a subsequent notice terminating further rulemaking on this subject, the agency announced its decision to retain the automatic restraint requirements for convertibles manufactured on or after the first day after the end of the phase-in period, i.e., September 1, 1989 (52 FR 10122, March 30, 1987, copy enclosed). Thus, convertibles manufactured on or after that date will be subject to the same requirements as all other passenger cars.; You also asked about the exact requirements for restraints i convertibles. Prior to September 1, 1989, convertibles must comply with the requirements of section S4.1.2.3.2 of Standard No. 208. However, convertible manufacturers may, at their option, choose to certify that convertibles manufactured before September 1, 1989, comply with the automatic restraint requirements set forth in section S4.1.2.1 of Standard No. 208. After September 1, 1989, Standard No. 208 draws no distinction between convertibles and other passenger cars. Section S4.1.4 of Standard No. 208 provides that all passenger cars, including convertibles, manufactured on or after September 1, 1989, shall comply with the automatic restraint requirements of S4.1.2.1, unless section S4.1.4 is rescinded pursuant to S4.1.5.; 2. A manufacturer does not have to count convertibles as part of it passenger car production volume when determining its annual production during the phase-in period.; This statement is also correct. The October 17, 1986 amended Standar No. 280 and 49 CFR Part 585, *Automatic Restraint Phase-In Reporting*, to explicitly provide that manufacturers may exclude their production of convertibles that do not comply with the automatic restraint requirements of S4.1.2.1 of Standard No. 208 from the calculation and reporting of annual production during the phase-in period.; If you have any further questions on this subject, please feel free t contact Steve Kratzke of my staff at this address or by telephone at (202) 366-2992 (sic).; Sincerely, Erika Z. Jones, Chief Counsel

ID: 86-4.47

TYPE: INTERPRETATION-NHTSA

DATE: 08/18/86

FROM: AUTHOR UNAVAILABLE; Erika Z. Jones; NHTSA

TO: Thomas J. Flanagan

TITLE: FMVSS INTERPRETATION

TEXT:

Thomas J. Flanagan, Esq. Wiggin & Dana 195 Church Street P.O. Box 1832 New Haven, CT 06508

Dear Mr. Flanagan:

This responds to your letter to Mr. Brian McLaughlin, of our Rulemaking division, seeking an interpretation of the requirements of 49 CFR Part 541, Federal Motor Vehicle Theft Prevention Standard. You described a situation in which a client, Saab-Scania of America, imports cars subject to the theft prevention standard and uses them directly as company cars or leases them to employees for their personal use. After such use, the company sells the cars to dealers as used cars. On occasion, these vehicles may have an original equipment major part covered by the theft prevention standard that is so badly damaged during such use that the part must be replaced before the vehicle is delivered to a dealer or distributor. When this occurs, you asked whether the repair would be required to be made with a part marked with the full VIN or whether the repair could be made with a properly marked replacement part. We conclude that when a manufacturer uses a car as a company car in the manner you describe, it may make any necessary repairs to damaged major parts by installing parts marked as replacement parts. This conclusion is explained in detail below.

Section 2(7) of the Cost Savings Act (15 D.S.C. 1901(7)) defines a manufacturer as "any person engaged in the manufacturing or assembling of passenger motor vehicles or passenger motor vehicle equipment including any person importing motor vehicles or motor vehicle equipment for resale." (Emphasis added). It is clear under this statutory definition that your client is a "manufacturer" for the purposes of the theft prevention standard, since it is importing motor vehicles for resale.

Section 606(c)(1) of the Motor Vehicle Information and Cost Savings Act (15 U.S.C. 2026(c)(1)) requires vehicle manufacturers to certify that each vehicle complies with the requirements of the theft prevention standard "at the time of delivery of such vehicle". The preamble to the final rule establishing the theft prevention standard discussed this agency's conclusion that the "delivery" as used in this part of section 606(c)(1) means the delivery from the manufacturer to a dealer or distributor, and that the delivery occurs when the goods are delivered by the seller to a carrier. 50 FPR 43166, at 131B6-43187, October 24, 1985. In the next sentence, section 606(c)(1) specifies that the certification shall accompany the vehicle until delivery to the first purchaser. NHTSA believes that this statutory requirement means that each vehicle in the lines selected as high theft lines and listed in Appendix A of Part 541 must be delivered to the first purchaser with all covered major parts marked in accordance with the theft prevention standard. However, NHTSA does not interpret this statutory provision as requiring that every first purchaser be delivered a vehicle with all covered major parts marked with the VIN. Instead, the agency believes this means that the first purchaser may receive a vehicle with the undamaged covered original equipment major parts marked with the VIN, and with those covered major parts installed by a dealer or distributor to replace damaged original equipment parts marked as replacement parts.

In accordance with this interpretation, NHTSA does not believe that a manufacturer delivers a car to itself, when the car is sold to the public as a new car. However, you have noted a circumstance in which cars are bona fide used as company cars and are sold to the public as used cars, not new cars. Congress knew that used cars frequently have some replacement parts substituted for the original equipment parts. However, Title VI contains no requirement that used cars have all covered major parts marked with the VIN. In fact, Title VI presumes that when an original equipment major part is so badly damaged that it must be replaced, it will be replaced with a replacement part marked in conformity with Part 541. This reflects a legislative judgment that such replacement does not increase the opportunity for car thieves to steal the car without fear of being apprehended, or otherwise frustrate the purposes of Title VI, even though the car no longer has all major parts marked with the VIN.

On the other hand, a severe burden would be imposed on all manufacturers if they were required to deliver all bona fide company cars to distributors or dealers with all covered major parts marked with the VIN. If this were required and the company car were involved in an accident that required a covered major part to be replaced, the manufacturer would have a choice of either asking the factory to produce a replacement part with the VIN marked on the part and waiting to repair the vehicle until the part marked with the VIN arrived, or ending the vehicle's use as a company car and shipping the unrepaired vehicle to a dealer or distributor with the damaged major part marked with the VIN still on the vehicle. Nothing in the legislative history of Title VI explicitly or implicitly suggests that Congress intended such harsh treatment of company cars under the theft prevention standard.

Balancing the absence of negative policy consequences under Title VI if manufacturers are allowed to repair company cars with properly marked parts against the significant burdens that would be imposed on manufacturers if damaged major parts on company cars had to be replaced with parts marked with the full VIN, NHTSA concludes that Title VI of the Cost Savings Act permits cars damaged while in bona fide use as company cars and sold to the public as used cars, to be repaired by the manufacturer using properly marked replacement parts. This conclusion is based on NHTSA's interpretation that bona fide use of the car as a company car by the manufacturer is, for all practical and policy purposes, tantamount to a delivery of the vehicle under section 606(c)(1). The conclusion is reinforced by the fact that when a company car is later sold to the public as a used car, the consumer purchasing the company car Hill get a car with the same theft markings as any other used car.

NHTSA would like to note that this interpretation applies only to Title VI of the Cost Savings Act, and not to any other statutes administered by this agency. Those statutes may have different underlying policy considerations, which might mandate a different conclusion for cars used as company cars. Further, the agency wishes to emphasize that this interpretation applies only to bona fide company cars that are sold to the public as used cars, and not to most of the cars manufactured by the manufacturer.

Please feel free to contact me if you have any further questions about our theft prevention standard.

Sincerely,

Erika Z. Jones Chief Counsel

April 3, 1986

Mr. Brian McLaughlin Office of Market Incentives NHTSA 400 Seventh Street, SW Washington, D.C. 20530

Re: Theft Prevention Regulations

Dear Mr. McLaughlin:

As you suggested during our phone conversation on March 31, 1986, I am writing to request a more formal response to the question I asked during that conversation.

As you will recall, our client, Saab-Scania of America, Inc., uses some of the vehicles that it imports before selling these cars to dealers as used cars. The company either uses these cars directly or leases them to employees.

The question I asked was whether vehicles so employed by an importer that needed repairs before delivery to a dealer as a used car could be repaired with "R" marked parts or whether such vehicles must be repaired with parts market with the full VIN number.

My reading of the statute is that, under these circumstances, the importer itself becomes the "first purchaser" of tie vehicle thereby allowing the importer to repair the vehicle with "R" marked parts.

Please call if you require any more information to reply.

Thank you for your consideration.

Sincerely,

Thomas J. Flanagan

TJF:j1

ID: nht87-3.15

TYPE: INTERPRETATION-NHTSA

DATE: 10/15/87

FROM: ERIKA Z. JONES -- NHTSA

TO: G.T. DOE -- LOTUS ENGINEERING, LTD.

TITLE: NONE

ATTACHMT: LETTER DATED 02/05/87 FROM G.T. DOE TO ERIKA Z JONES; OCC 176; LETTER DATED 09/18/87 FROM ERIKA Z JONES TO J. DOUGLAS HAND

TEXT: Dear Mr. Doe:

This responds to your letter in which you asked how the conversion of a convertible to a hardtop would affect the applicability of two of our safety standards. I regret the delay in this response. You explained that Lotus proposes to introduce a new tw o seat convertible into the United States. These cars will be imported into the United States and delivered to dealers and distributors as convertibles. However, you stated that Lotus intends to offer a "factory manufactured and approved" hardtop conve rsion for these convertibles. Dealers would remove the convertible canopy and support frame and permanently attach a hard roof to the vehicle. The converted cars would be sold to the public as hardtops. You then asked whether the convertible cars would be treated as hardtops or convertibles for the purposes of Standards No. 208 and No. 216.

I would like to set the foundation for answering your specific questions by first addressing a few basic points. The agency has defined a convertible as "a vehicle whose A-pillar (or windshield peripheral support) is not joined at the top with the B-pil lar or other rear roof support rearward of the B-pillar by a fixed rigid structural member." In this case, your kit will join the A-pillar and B-pillar of the convertible by a fixed rigid structural member. After this conversion, the car would no longer be a convertible, as that term is used by NHTSA.

Section 108(a)(1)(A) of the National Traffic and Motor Vehicle Safety Act of 1966, as amended (15 U.S.C. 1397(a)(1)(A)) provides that, "No person shall manufacture for sale, sell, offer for sale, or introduce or deliver for introduction in interstate com merce, or import into the United States, any motor vehicle ... manufactured on or after the date any Federal motor vehicle safety standard takes effect under this title unless it is in conformity with such standard except as provided in subsection (b) of this section." This provision makes clear that a dealer would be prohibited from selling a hardtop passenger car that did

not comply with all safety standards applicable to hardtops, even though the passenger car conformed to all standards applicable to convertibles when it was imported and delivered to the dealer.

The exceptions set forth in section 108(b) of the Safety Act would not permit a dealer to sell a car that had been converted from a complying convertible into a hardtop without being modified to comply with all safety standard requirements applicable to hardtops. Section 108(b)(1) specifies that the prohibition on selling or offering to sell passenger cars that do not conform with all safety standards does not apply after the first purchase of the car in good faith for purposes other than resale. Howe ver, a dealer that converts a car into a different type before the first purchase could not rely on this exception.

Section 108(b)(2) specifies that the prohibition on selling nonconforming cars shall not apply to any person who establishes that he or she did not have reason to know in the exercise of due care that the car did not conform to the safety standards, or t o a person who holds a certification of conformity from the manufacturer or importer of the car, unless that person knows that the car does not conform. In the case of this proposed conversion, the dealers would hold a certificate of conformity from Lot us of the importer for the convertible version of this car. However, the dealers would also know that they had converted the car into a hardtop, and that they had no certificate of conformity for the car as a hardtop. Further, such dealers would have r eason to know that the requirements in the safety standards for hardtops are different from those for convertibles. Finally, the dealers would know that the hardtop version of the car had not been certified as conforming to all applicable standard requi rements. Indeed, as alterers of completed vehicles, the dealers would be required to recertify the cars under 49 CFR @ 567.7.

The exceptions to section 108(a)(1)(A)'s prohibition set forth in sections 108(b)(3)-(5) are not applicable in this situation. Hence, dealers could not legally sell these converted cars to the public for the first time, unless the cars conform with all safety standards applicable to hardtop passenger cars. With this background, I will now address your specific questions. They were:

1. Convertibles are not required to conform to the roof crush requirements of Standard No. 216, Roof Crush Resistance - Passenger Cars (49 CFR @571.216). Would the designation of the vehicle as a convertible remain unaffected by the hardtop conversio n?

ANSWER: As explained above, the answer to this question is no. Any car that is converted to a hardtop before its first sale for purposes other than resale must comply with all standards applicable to hardtops. Assuming such cars do not conform to the r ollover test requirements in section S5.3 of Standard No. 208 by means that require no action by vehicle occupants, these cars would be subject to the requirements of Standard No. 216.

2. Would the requirement for seating and restraint system provision remain unaffected by the hardtop conversion?

ANSWER: No. It is not clear to which seating requirements you are referring. However, you stated in your letter, "It is conceivable that, although the shelf would not be recognised as a seating area, small occupants could travel in this area." The requi rements for seating systems are dependent upon the existence of a "designated seating position." This term is defined in 49 CFR @571.3 as follows:

"Designated seating position" means any plan view location capable of accommodating a person at least as large as a 5th percentile adult female, if the overall seat configuration and design and vehicle design is such that the position is likely to be used as a seating position while the vehicle is in motion, except for auxiliary seating accommodations such as temporary or folding jump seats.

We cannot determine from your letter if the shelf area is capable of accommodating a 5th percentile adult female, nor can we determine whether the area's configuration and design is such that the position is likely to be used as a seating position while the vehicle is in motion. It appears from the enclosed drawings that any person riding in the shelf area would have to sit on the floor or prop themselves on the wheel wells. If this is true, the shelf area would not be considered to have any designate d seating positions.

The required occupant restraint system would also be affected by converting the convertibles into hardtops. As explained above, cars that are converted to hardtops by dealers before sale to the public would not be treated as convertibles for the purpose s of Standard No. 208, Occupant Crash Protection (49 CFR @ 571.208). Since the cars would no longer be considered convertibles, they would have to be equipped with lap/shoulder belts at both designated seating positions, pursuant to section S4.1.2.3.1 o f Standard No. 208. Additionally, these cars would not be eligible for the exemption for convertibles during the phase-in of the automatic restraint requirements in Standard No. 208. I sent a letter to General Motors (GM) on September 18, 1987, stating that GM may be considered the manufacturer of Lotus cars that are imported into the United States (copy enclosed). Therefore, any Lotus cars that are converted into hardtops would have to be included in GM's annual production to determine compliance wi th the phase-in requirement, pursuant to sections S4.1.3.1.2, S4.1.3.2.2, and S4.1.3.3.2 of Standard No. 208. I have also sent a copy of this letter to General Motors.

ENCLOSURE

ID: nht95-3.84

TYPE: INTERPRETATION-NHTSA

DATE: August 9, 1995

FROM: William Meurer -- President, Green Motorworks

TO: John Womack -- Acting Chief Counsel, NHTSA

TITLE: NONE

ATTACHMT: ATTACHED TO 8/30/95 LETTER FROM JOHN WOMACK TO WILLIAM MEURER (PART 591; RED BOOK 2)

TEXT: Dear Mr. Womack:

Our firm has been selected to be the Agent for Service of Process and the United States importer for the Norwegian electric vehicle manufacturer PIVCO AS. Attached please find the original document affirming our designation and acceptance as agent for process.

As you requested, I attach herewith the Statement of Work and the BART Executive Summary which summarize the demonstration program that we will be administering. Five (5) separate California and U.S. agencies have united to provide funding for this p roject as a prelude to the development of manufacturing of the PIVCO City Bee EV in California. We seek to import the first 12 vehicles under section 591.5(J) and the subsequent 28 vehicles will be fully compliant. The actions we request are:

1) Please withdraw our previous request for a temporary exemption at this time.

2) Permission to import twelve (12) City Bee electric vehicles under CFR section 591.5(J).

3) A waiver from section 591.7(C) which would then allow us to operate these vehicles on the public roadways.

These vehicles will be fully insured and used by a control group of drivers to evaluate the various aspects of this demonstration project. It is vital that these vehicles be allowed to operate on public roads in order to demonstrate the station car c oncept as proposed in this program. After the two year demonstration project is completed, the non-FMVSS compliant vehicles will either be destroyed or exported under section 591.5(J)(3).

The testing of these electric cars is in the public interest because of the development of a zero emission vehicle and the near term creation of the U.S. manufacturing of it. Attached herewith is the letter of intent between CALSTART and PIVCO defini ng the goals and stipulations of this collaboration.

Our first shipment of eight (8) vehicles will leave Oslo, Norway on August 30, 1995. I greatly appreciate your prompt attention to our request. Thank-you.

attachments: Letter assigning Agent for Service of Process, Statement of Work, BART Executive Summary, Vehicle Specifications, CALSTART Letter to PIVCO.

Enclosure 1

Administrator National Highway Traffic Safety Administration Washington, DC 20590 USA

Oslo, 9 June 1995

Dear Mr. Administrator:

PIVCO AS hereby designates Green Motorworks, Inc. as our United States agent upon whom service of all processes, notices, orders, decisions, and requirements may be made on our behalf as provided in section 110(e) of the national Traffic and Motor vehicl e Safety Act of 1966 (80 Stat. 718) and in section 551.45 of the code of Federal Regulations.

PIVCO AS is the manufacturer of the CITY BEE electric vehicle and is located at: PIVCO AS Stanseveien 4 0975 Oslo Norway tel: + 47 22 25 20 50 fax: + 47 22 25 41 20

Our agent for service of process is: Green Motorworks, Inc. 5228 vineland Avenue North Hollywood, CA 91601 tel: (818) 766 3800 fax: (818) 766 3969

Sincerely yours,

PIVCO AS

Jan-Otto Kingdal Manufacturer

Accepted for Green Motorworks, Inc. William Meurer, President Date 6/9/95

Enclosure 2

Statement of Work

The San Francisco Bay Area Station Car Demonstration

Summary:

Green Motorworks, Inc. (GMW) is the United States Importer and Agent for Service of Process for PIVCO AS, Norway. In the context of the San Francisco Bay Area Station Car Demonstration, GMW will act as the leasing agent to BART and administer the dep loyment of all vehicles in the program.

BART will enter into a lease agreement with Green Motorworks, Inc. (GMW) to provide 40 electric station cars for a 24 month period. GMW will provide insurance, NHTSA compliance, driver training, vehicle maintenance and complete towing & repair servic es.

Three vehicles will be held in reserve for a spare for any of the users. Each user will be charged between $ 100 to $ 150 per month per vehicle depending on the extent of use. GMW reserves the right to modify the monthly charge at its discretion.

Purpose:

The purpose of this program is to assess the visability of station cars in use for both home to transit, transit to work, and company pool applications. Vehicle operational costs, user price sensitivity, corporate support, multi-user program viability and vehicle technical assets and failings will be evaluated.

Overview of Vehicle Roll Out Phases

PHASE I, October 1995: Ashby & BART Headquarters

GMW will deliver 12 PIVCO City Bee electric cars. These cars will be the European version which meets all European standards and has a top speed of 40-50 mph.

The cars stationed at the Ashby BART station will be offered to employees of Sybase Systems and Ashby area residents. GMW will administer the user agreements in coordination with the City of Emeryville Projects Coordinator Ignacio Dayrit, Sybase syst ems and BART Project Manager Victoria Nerenberg.

October 15, 1995: (8) PIVCO EVs

Site # 1: Ashby BART Station 5 user cars Site # 2: BART Oakland 2 cars to be used for testing & Police Dept.Headquarters Program Office: Alameda Naval Air 1 spare car Station

December 15, 1995: (4) PIVCO EVs

Site # 1: Ashby BART Station 4 cars to add to fleet PHASE II, Summer 1996: Ashby, Walnut Creek & Colma

GMW will deliver 28 cars with upgraded U.S. manufactured drive trains that will allow these vehicles to reach freeway speeds. These vehicles will be fully compliant with all 1996 NHTSA FMVSS safety requirements. All of these vehicles will be equippe d with air-conditioning.

Summer 1996: (28) PIVCO EVs

Site # 1: Ashby BART Station 10 user cars Site # 3: Walnut Creek BART Station 8 user cars Site # 4: Colma BART Station 8 user cars & 1 spare car Program Office: Alameda Naval Air Station 1 spare car

Ashby- 11 vehicles delivered to increase fleet to 20. Applications for people requiring a vehicle for a transit to home location commute will be sought. One vehicle to held as spare.

Walnut Creek- BART & PG&E Employees will utilize 8 vehicles stationed at the Walnut Creek BART Station. The cars will be used to demonstrate the commute between the station to home, and the station to workplace.

Colma- GMW will deploy 8 cars to be stationed at the Colma BART station. The vehicles will be used by BART and PG&E employees.

Scope of Services

Vehicle Importation & Validation: GMW will administer the importation of all vehicles to the Port of Oakland, perform pre-delivery inspection and cycle battery systems for proper operation. All data acquisition systems will be installed by PG&E or CALST ART. GMW will prepare and provide to BART all data required by the funding sources.

Administration: William Meurer will serve as the 'Operations Manager' who will be responsible for the following areas: 1) All areas of program 2) Selection of drivers and processing of paperwork. 3) Training and success of drivers. 4) Supervision of Vehicle Service Supervisor 5) Supervision of outside vendors.

GMW will hire a 'Vehicle Service Supervisor' who will work out of space leased with other CALSTART participants at the Alameda Naval Air Station. GMW will provide a gas-powered mobile service/tow vehicle for supervisor. The supervisor will have both a cellular phone and a beeper. A 24-hour Vehicle Service Technician will also be hired to respond to service calls on a 7 day/week 24-hour basis.

Summary of Services & Milestones

Battery Warranty: GMW will administer all battery warranty claims in a timely manner. PIVCO is responsible for all battery upgrades in PIVCO vehicles. GMW is not responsible for assigned battery suppliers to provide replacement batteries within prescri bed delivery schedules.

Walk Home Ratio: GMW will provide 24-hour service for failed vehicles to insure that program users will never have to walk home if a vehicle fails. Zero tolerance for walk homes.

Data Retrieval: GMW will monitor data acquisition systems and provide data to PG&E and CALSTART. Other reporting data will be given to a BART selected employee for reporting.

Program Duration: 24 Months starting October 15, 1995 and ending September 15, 1997.

Delivery Schedule: Vehicles 1-8 Delivered to Sites # 1 & # 2 by October 15, 1995 Vehicles 9-12 Delivered to Site # 1 by December 15, 1995 Vehicles 13-40 Projected delivery to Sites # 1, # 3, # 4 by Summer, 1996

User Fees: All user fees will be collected by GMW to apply to the cost of vehicle insurance.

Enclosure 3:

BAY AREA STATION CAR DEMONSTRATION

Executive Summary

The San Francisco Bay Area Rapid Transit District has attracted $ 1.441 million in outside funding to support the demonstration of 40 electric station cars for two years. The Bay Area Air Quality Management District has granted $ 700,000 from AB434 fund s (Transportation Fund for Clean Air). Through CALSTART, the project is receiving $ 521,000 from the U.S. Department of Defense (ARPA). Other contributions are $ 100,000 (plus in-kind) from the Pacific Gas & Electric Company (PG&E), $ 90,000 from the Ca lifornia Energy Commission (CEC), and $ 30,000 from the California Department of Transportation (CALTRANS).

The purpose of the demonstration is to determine the usefulness of electric cars for everyday short trips made by BART patrons. BART will contract with Green Motorworks, Inc. of southern California to lease 40 two-passenger electric vehicles manufacture d by the Personal Independent Vehicle Company (PIVCo) of Norway. Twelve non-freeway capable cars will be in operation by December 1995, and twenty-eight freeway capable cars will be in operation by the summer of 1996. The use of the cars will be demons trated in a variety of settings: home to BART station; station to work site; and pool cars for worksites. Other short trips are allowed.

The program will attempt to maximize pollution reductions per electric vehicle by giving priority to carpoolers. Carpool teams, individuals or their employers will pay Green Motorworks $ 100 to $ 150 per month to use a vehicle (cost depends on the exten t of use). An added personal cost would be recharging at home, if needed (the cost should average less than a dollar per night).

BART statistics show that thousands of commuters drive all the way to work each day and end up a mere one to five miles from a BART station. The link from BART to their work site is not well served by either public transportation, taxis, company shuttle s or any other service. This untapped commute market is ideal for a station car service, especially if offered in cooperation with major employers who are mandated by statutory air quality regulations to implement employee trip reduction programs.

BART and PG&E will install 20 charging outlets at the Ashby BART station, 8 at the Walnut Creek station, 10 at the Colma station, and 2 at BART headquarters.

Meters will record the amount of electricity used at each station. Data acquisition instrumentation will be on each vehicle as well as personal-use logs. Three vehicles will be held in reserve to be used as replacement cars if necessary.

The delivery of the first eight cars will be by October 15, 1995, four by December 15, 1995, and the subsequent twenty-eight vehicles by August 1996. The cars will be used by BART and PG&E employees and selected public/private participants.

Enclosure 4

PIVCAL Inc. DRAFT 11.06.95

SPECIFICATIONS 12 Vehicles, 8 shipped 30th Aug. 95 Vehicle: 1995 PIVCO, City Bee, Prototypes Color: Blue, red, green Body/frame Thermoplastic, mass colored body/ aluminum space frame, both easily recyclable. Dimensions: L: 9.2 feet, W: 5 feet, H: 5 feet Decals: Provided by BART, can only be placed on side and rear windows. Safety Certificat.: European standard 1994 Weight, Gross Vehicle Weight Rating (GVWR): approximate: 2200 lb. Curb Weight: 1750 lb. Capacities: Passenger capacity - 2. Turning diam.: 26 feet Brakes: Disc front w/regen., drum rear. Steering: Rack and pinion. Propulsion Sys: Motor: Solectria or Brusa with AC induction, 3-phase, 2-pole, with optical encoder and peak power of 22 kW. Controller: Solectria or Brusa Control Systems, DC to three- phase AC inverter. DC/DC Conv.: Curtis 12V 35A Charger: On board 110V AC, or 208V AC 15A Battery Pack: Traction battery voltage full charge, nominal 120 volts DC. Batteries: Maintenance-free, sealed lead acid battery, Optima or an equal battery. Charging Port: Located at front of vehicle w/ retractable cord Transmission: Single speed, non-shift drive. Wheels/Tires: Aluminium 13" x 5"/All-season steel- belted radial tires. HVAC: 1.5 kW electric heating and defrosting Radio: FM/AM Comment: Passenger seats are situated higher than in a conventional car and together with a deep dash and a wide windshield this gives the driver a good view and a comfortable feeling. This adds also to the safety.PERFORMANCE Top speed: 50 MPH Range: Constant 40 MPH 45 miles. Adverse driving conditions (Stop and go) 35 miles Acceleration: 0 - 30 MPH 14 seconds 0 - 50 MPH 25 seconds Charging: 5 to 6 hours, 208 Volts AC 7 to 10 hours, 110 Volts AC

SPECIFICATIONS 58 Vehicles 1996 Vehicle: 1996 PIVCO, City Bee, Pre-series Color: To be determined Body/frame Same Dimensions: Same Decals: Same Safety Certificat.: FMVSS 1996 Weight, Sameapproximate: Capacities: Same Turning diam.: Same Brakes: Same Steering: Same Propulsion Sys: Motor: Advanced D.C. Motors, Inc. and Solectria to be considered. Controller: Curtis or Solectria DC/DC Conv.: Curtis 12V 35A Charger: To be determined Battery Pack: Same Batteries: Same plus others to be considered Charging Port: Same Transmission: Same Wheels/Tires: Same HVAC: Same plus Air conditioner to be determined Radio: Same Comment: SamePERFORMANCE Top speed: 65 MPH Range: Constant 40 MPH 55 miles. Adverse driving conditions (Stop and go) 40 miles Acceleration: 0 - 30 MPH 9 seconds 0 - 50 MPH 18 seconds Charging: 5 to 6 hours, 208 Volts AC 7 to 10 hours, 110 Volts AC Enclosure 5

August 1, 1995

Mr. Jan Otto Ringdal Managing Director PIVCO A/S Stanseveien 4 0975 Oslo, Norway

Dear Jan:

This letter expresses our mutual intention with respect to the proposed collaboration between CALSTART, Inc., a California non-profit corporation, and PIVCO A/S, a Norwegian company ("PIVCO"). The goals of our collaboration are two-fold: (1) to enable P IVCO to successfully penetrate the United States market with a "purpose-built" electric vehicle such as the "City Bee" that is both popular and desirable, is specifically adapted to the United States market, fully complies with Federal Motor Vehicle Safe ty Standards ("FMVSS") and other regulatory requirements (each such vehicle being referred to herein as a "U.S. Adapted Vehicle"); and (2) to create jobs and improve air quality in the United States generally, and the State of California in particular.

This letter will set forth the general form and terms of the proposed collaboration and assist us in negotiating and completing an enforceable definitive agreement or agreements as follows:

1. The Definitive Agreement would acknowledge that CALSTART has and will continue to provide PIVCO with valuable technical and marketing assistance in developing a U.S. Adapted Vehicle and to manufacture or assemble the same at a facility to be located in the State of California, including the following:

* assisting PIVCO in securing orders for initial purchases of pre-production and production prototypes of U.S. Adapted Vehicles;

* assisting PIVCO in securing sources of financing and obtaining information towards the goal of achieving compliance of the U.S. Adapted Vehicles with FMVSS;

* assisting PIVCO in identifying U.S. component suppliers for U.S. Adapted Vehicles;

* assisting PIVCO in obtaining information for the business plan for its United States operations, possibly through a wholly-owned or partially-owned U.S.-based subsidiary ("PIVCO U.S./PIVCAL").

2. The Definitive Agreement would provide that in consideration of the past and continuing services provided by CALSTART, then if PIVCO, PIVCO U.S./PIVCAL, or any entity under their direct or indirect control using any patents, know-how or other proprie tary information relating to U.S. Adapted Vehicles provided to it by PIVCO or any of its affiliates (a "PIVCO Controlled Licensee"), elects to manufacture, assemble, market, distribute or sell U.S. Adapted Vehicles in the United States, then:

a. PIVCO will agree, or will cause each PIVCO Controlled Licensee to agree, to use its best commercial efforts to build, or have built, and operate an assembly or manufacturing facility for U.S. Adapted Vehicles in the State of California at a site whic h is mutually agreed upon with CALSTART. [PIVCO or such PIVCO Controlled Licensee will give favorable consideration to the Alameda Naval Air Station as one such site.]

b. For each U.S. Adapted Vehicle which is sold at wholesale or retail in the United States and which is manufactured or assembled by PIVCO or any PIVCO Controlled Licensee at a facility located at a site other than a site that is acceptable to CALSTART, PIVCO or such PIVCO Controlled Licensee will pay CALSTART a royalty in the amount of $ 500, or five per cent (5%) of the suggested retail price of the vehicle, whichever amount is greater. Payments of such royalties will be quarterly, with such payment s and a royalty statement to be delivered to CALSTART within 45 days after the end of each calendar quarter, beginning with the first calendar quarter during which any U.S. Adapted Vehicle is marketed, distributed or sold in the United States. The maxim um aggregate payment of such royalties to CALSTART will be $ 4,000,000, provided that over the term of the Agreement, each of the foregoing dollar figures (i.e., per vehicle royalty and maximum aggregate royalties) will be adjusted for inflation annually based on increases (but not decreases) in the U.S. All-Urban Consumer Price Index.

CALSTART