Electric Car Venture Zap Finds New US Dealers

US: February 7, 2007

LAS VEGAS - ZAP , a California company developing electric cars, Monday said it had signed up 12 new dealerships to sell a still-evolving line-up, including a high-performance car still on the drawing board.

British design firm Lotus Engineering and Zap are working together to develop an electric-powered all-wheel-drive crossover vehicle based on the Lotus AP-X concept car, both companies have said.

ZAP showed the seven-passenger Lotus concept vehicle to US auto dealers in Las Vegas this week in a bid to generate interest in distributing the car and other ZAP vehicles featuring alternatives to traditional gas engines.

With sales of gas-guzzling sport utility vehicles and trucks stalled, mainstream automakers, including General Motors Corp , are also rushing to offer electric-powered vehicles expected in the next few years.

ZAP Chief Executive Steven Schneider said the Lotus design had generated strong interest from auto dealers who might have earlier dismissed electric cars as a niche market.

The new vehicle from Lotus will not be available for several years. It is expected to be priced at more than US$60,000 and to have a 350-mile range between charges.

"The dealers -- knowing the timeline and everything it's going to take -- are willing to make the commitments now," Schneider told Reuters.

Schneider said ZAP had added 12 dealerships to its list of distributors in meetings in Las Vegas. The Santa Rosa, California-based company had 30 dealers previously.

A spokeswoman for ZAP said that by signing up as affiliates, dealers had agreed to order vehicles but were not required to pay a deposit as some niche car companies demand.

ZAP also plans to begin importing a microcar designed to run on either ethanol or gasoline. The vehicle is being built in Brazil by Obvio in the next few years.

Since August, ZAP has also been selling a three-wheeled, battery-powered truck being built in central China. The micro-truck, called the Xebra, sells for under US$10,000.

Schneider said an unauthorized venture to import Smart microcars to the US market had hurt ZAP's credibility with potential partners and investors, and set the company back.

"We have a bona fide partner now in Lotus and we're back a little older and a little wiser. Never again will we be in a situation where we can't control our own future," he said.

ZAP had been selling Smart cars made by DaimlerChrysler AG in the United States after modifying the tiny cars to meet US regulatory standards without the automaker's support.

ZAP filed a lawsuit against DaimlerChrysler in Los Angeles in 2005, accusing the German automaker of interfering with its business and seeking US$500 million in damages.

Last year, the DaimlerChrysler turned to United Auto Group Inc. to set up an independent dealership network for its Smart ForTwo, which is expected to go on sale in 2008.

The lawsuit is still pending. Schneider declined further comment.

REUTERS NEWS SERVICE