NHTSA sues ZAP, seeking $17.3 million for unrepaired brake issue

Publish Date: 
Jun 13, 2013
By Holly J. Wagner

WASHINGTON, D.C. – The National Highway Traffic Safety Administration (NHTSA) has sued Santa Rosa, Calif.-based ZAP for $17.3 million, saying the company failed to fix unsafe braking systems in the company’s Xebra enclosed three-wheelers.

The government also wants ZAP to refund $3,100 each to the owners of 691 vehicles NHTSA says were sold and never repaired, despite years of wrangling.

Dealernews was unable to reach anyone at ZAP for comment at press time. A judge has granted the company’s request to postpone further action in the case until July 15.

NHTSA first issued recalls on the vehicles, manufactured by QingQi Group Motorcycle Co. Ltd., in 2009, after testing of the vehicles (shown here) found that they did not meet safety standards for stopping distance. But the lawsuit filed in U.S. District Court alleges ZAP “failed to develop and implement a remedy to bring the vehicles into compliance with minimal safety standards…and was uncooperative and evasive with NHTSA.”

In a first-time action, last November NHTSA issued an order requiring ZAP to pay refunds to all owners of the 2008 Xebras sold in the U.S. and to destroy or permanently disable any that ZAP had in its possession.

NHTSA claims that ZAP dragged its heels on coming up with a fix for the problem and on notifying dealers and owners of the recall, and that when it did come up with a fix, it was a kit ZAP sent to vehicle owners who could not take their Xebras to Santa Rosa to get them repaired.

“Even had such remedy been effective in fixing the stopping distance issue – which ultimately proved not to be the case – the remedy was inadequate. It was not reasonable to expect owners to ship or bring vehicles to Santa Rosa…nor was the alternative of sending an owner an installation kit reasonable, because it involved an unduly complex process…” the complaint states.

ZAP reportedly told NHTSA it would initiate a repurchase campaign if it was unable to come up with a workable remedy by Sept. 30, 2012. ZAP didn’t, so in November NHTSA ordered the company to refund $3,100 to each owner of a 2008 Xebra.

NHTSA has asked the court to order ZAP to pay the refunds, and to pay a fine of $17.3 million, the statutory maximum for civil penalties because its request for $6,000 for each violation before Dec. 26. 2012 and $7,000 per violation thereafter would exceed the cap.

To read NHTSA's findings, click HERE.