The National Highway Traffic Safety Administration has filed suit against a California-based importer of Chinese-made electric motorcycles, seeking $17.35 million in civil fines and $3,100 refunds to owners after the agency says the company has repeatedly failed to fix unsafe braking systems.
NHTSA filed suit in U.S. District Court in Washington last month claiming ZAP, the Santa Rosa, Calif.-based importer of electric three-wheel motorcycles, had failed to develop a remedy to fix unsafe vehicles. The vehicles -- the 2008 ZAP Xebra -- are built by China Qingqi Group Inc. ZAP was "uncooperative and evasive" with NHTSA, the agency said in its 20-page federal lawsuit.
"Not only did ZAP provide conflicting or inadequate information to NHTSA about its recalls, but for years, its claims of having developed an effective repair remedy were proven wrong. ZAP also repeatedly and blatantly disregarded its notification obligations" under federal law. "ZAP's recall notices were false, misleading, untimely or non-existent. ZAP left owners in the dark for years about the status of the recalls, leaving them to drive unsafe vehicles on the roadways."
In November, NHTSA issued an order following a public hearing requiring ZAP to give refunds to the owners of the vehicles and to "destroy or permanently disable the vehicles in ZAP's possession. This was the first time NHTSA exercised its statutory authority to compel a manufacturer to comply with its remedy and notification obligations." It came after an Oct. 9 public hearing.
But more than six months later, ZAP hasn't complied and the vehicles remain on the roads. NHTSA says about 700 vehicles are covered by the issue; ZAP has issued four separate recalls for the vehicles.
ZAP didn't return calls seeking comment, but in a May 29 court filing, ZAP and NHTSA said they are "exploring a settlement of this case and have made significant progress," said Marc Dorfman, a lawyer for ZAP and Jean Lin, a senior trial counsel at the Justice Department's civil division. The case has been put on hold until July 15.
NHTSA purchased a 2008 ZAP Xebra in late 2008 for testing. It failed the effective stopping distance tests. NHTSA also determined the vehicle's brake master cylinder reservoir label was not worded correctly and was not at the minimum required height. ZAP agreed to recall the vehicles in late 2009, but only had contact information for 116 of 691 owners and its recall notices were false, NHTSA said, when they told owners to arrange with a dealer for recall repairs "when in fact ZAP had not developed a repair remedy that it planned to implement."
In October 2011, NHTSA asked ZAP about the lack of progress in the recall. ZAP said it would send follow-up notices to owners about the recalls, but never did. NHTSA says ZAP dealers continued to sell vehicles for years that weren't repaired -- in violation of federal law. NHTSA said as late as 2012, ZAP had not come up with a remedy that would bring the vehicles into full compliance with the law.
ZAP ultimately asked owners to ship their vehicles to Santa Rosa, Calif., for repairs -- or it offered to send repair kits to individual owners -- but NHTSA said neither remedy worked. The repair kit required owners to "place the vehicle on a car lift, remove all the wheels and replace the brake reservoirs, remove and replace the brake pressure sensors, replace the brake lines, replace the brake pads, install a proportioning valve, rewire brake sensors and floats, and bleed the system of air, among other things."