Fisker Automotive; Grant of Application for Temporary Exemption From Advanced Air Bag Requirements of FMVSS No. 208, 57549-57553 [2010-23472]

Download as PDF Federal Register / Vol. 75, No. 182 / Tuesday, September 21, 2010 / Notices for public and agency review and comment prior to the public hearings. To ensure that the full range of issues related to this proposed action are identified and taken into account, comments and suggestions are invited from all interested parties. Comments and questions concerning the proposed action should be directed to the FHWA contact person identified above at the address provided above. (Catalog of Federal Domestic Assistance Program Number 20.205, Highway Planning and Construction. The regulations implementing Executive Order 12372 regarding intergovernmental consultation on Federal programs and activities apply to this proposed program). Charles J. O’Neill, Planning & Program Mgmt. Team Leader, Nashville, TN. [FR Doc. 2010–23527 Filed 9–20–10; 8:45 am] BILLING CODE 4910–22–P DEPARTMENT OF TRANSPORTATION Federal Highway Administration Notice To Rescind a Notice of Intent To Prepare a Supplemental Environmental Impact Statement (SEIS): Route 475 (Knoxville Parkway), From Interstate 75 South of Knoxville to Interstate 75 North of Knoxville, Loudon, Knox, and Anderson Counties, TN Federal Highway Administration (FHWA), DOT. ACTION: Notice of intent. AGENCY: The Federal Highway Administration (FHWA) is issuing this notice to advise the public that the Notice of Intent published on November 4, 2005 to prepare a SEIS for the proposed Route 475 (Knoxville Parkway) from Interstate 75 south of Knoxville to Interstate 75 north of Knoxville, Loudon, Knox, and Anderson Counties, Tennessee, is being rescinded. FOR FURTHER INFORMATION CONTACT: Mr. Charles J. O’Neill, Planning and Program Management Team Leader, Federal Highway Administration— Tennessee Division Office, 404 BNA Drive, Suite 508, Nashville, TN 37217. 615–781–5770. SUPPLEMENTARY INFORMATION: The FHWA, in cooperation with the Tennessee Department of Transportation, is rescinding the notice of intent to prepare a SEIS for the proposed Route 475 (Knoxville Parkway) from Interstate 75 south of Knoxville to Interstate 75 north of Knoxville, Loudon, Knox, and Anderson Counties, Tennessee. The proposed srobinson on DSKHWCL6B1PROD with NOTICES SUMMARY: VerDate Mar<15>2010 19:02 Sep 20, 2010 Jkt 220001 project was approximately 36 miles in length. The project as described in the December 18, 2001 Draft Environmental Impact Statement (DEIS) was proposed to improve the regional transportation system in the area. Since the original Draft Environmental Impact was approved, the alternative development and screening process for the project has continued through a Context Sensitive Solution Process (CSS). This CSS process identified new alternatives to follow the general alignment of the Orange alternative, but had been shifted at various locations based on input from the CSS process. In addition, the number and type of access points along the route have been modified. The purpose of the SDEIS was to study and develop the new alternatives. The NoBuild and three Build Alternatives were proposed to be studied in the SDEIS. Revised traffic projections show a much lower level of traffic using the new proposed Route 475 (Knoxville Parkway) and a smaller diversion of traffic from Interstate 40 and Interstate 75 than was originally projected. In addition, the estimated cost of approximately one billion dollars was determined to be prohibitive. To ensure that the full range of issues related to this proposed action are identified and taken into account, comments and suggestions are invited from all interested parties. Comments and questions concerning the proposed action should be directed to the FHWA contact person identified above at the address provided above. (Catalog of Federal Domestic Assistance Program Number 20.205, Highway Planning and Construction. The regulations implementing Executive Order 12372 regarding intergovernmental consultation on Federal programs and activities apply to this proposed program.) Charles J. O’Neill, Planning and Program Mgmt., Team Leader, Nashville, TN. [FR Doc. 2010–23525 Filed 9–20–10; 8:45 am] BILLING CODE 4910–22–P PO 00000 DEPARTMENT OF TRANSPORTATION National Highway Traffic Safety Administration [Docket No. NHTSA–2010–0069] Fisker Automotive; Grant of Application for Temporary Exemption From Advanced Air Bag Requirements of FMVSS No. 208 National Highway Traffic Safety Administration (NHTSA), Department of Transportation (DOT). ACTION: Notice of grant of petition for temporary exemption from certain provisions of Federal Motor Vehicle Safety Standard (FMVSS) No. 208, Occupant Crash Protection. AGENCY: This notice grants the petition of Fisker Automotive Corporation (Fisker) from certain advanced air bag requirements of FMVSS No. 208, for the Karma model. The basis for the application is that compliance would cause substantial economic hardship to a manufacturer that has tried in good faith to comply with the standard. This action follows our publication in the Federal Register of a document announcing receipt of Fisker’s petition and soliciting public comments. DATES: The exemption is effective immediately and remains in effect until September 21, 2011. FOR FURTHER INFORMATION CONTACT: Edward Glancy, Office of the Chief Counsel, NCC–112, National Highway Traffic Safety Administration, 1200 New Jersey Avenue, SE., West Building 4th Floor, Room W41–326, Washington, DC 20590. Telephone: (202) 366–2992; Fax: (202) 366–3820. SUPPLEMENTARY INFORMATION: SUMMARY: I. Advanced Air Bag Requirements and Small Volume Manufacturers In 2000, NHTSA upgraded the requirements for air bags in passenger cars and light trucks, requiring what are commonly known as ‘‘advanced air bags.’’ 1 The upgrade was designed to meet the goals of improving protection for occupants of all sizes, belted and unbelted, in moderate-to-high-speed crashes, and of minimizing the risks posed by air bags to infants, children, and other occupants, especially in lowspeed crashes. The advanced air bag requirements were a culmination of a comprehensive plan that the agency announced in 1996 to address the adverse effects of air bags. This plan also included an extensive consumer education program to 1 See Frm 00113 Fmt 4703 Sfmt 4703 57549 E:\FR\FM\21SEN1.SGM 65 FR 30680 (May 12, 2000). 21SEN1 57550 Federal Register / Vol. 75, No. 182 / Tuesday, September 21, 2010 / Notices encourage the placement of children in rear seats. The new requirements were phased in beginning with the 2004 model year. Small volume manufacturers were not subject to the advanced air bag requirements until September 1, 2006. In recent years, NHTSA has addressed a number of petitions for exemption from the advanced air bag requirements of FMVSS No. 208. The majority of these requests have come from small manufacturers which have petitioned on the basis of substantial economic hardship to a manufacturer that has tried in good faith to comply with the standard. NHTSA has granted a number of these petitions, usually in situations where the manufacturer is supplying standard air bags in lieu of advanced air bags.2 In addressing these petitions, NHTSA has recognized that small manufacturers may face particular difficulties in acquiring or developing advanced air bag systems. The agency has carefully tracked occupant fatalities resulting from air bag deployment. Our data indicate that the agency’s efforts in the area of consumer education and manufacturers’ providing depowered air bags were successful in reducing air bag fatalities even before advanced air bag requirements were implemented. As always, we are concerned about the potential safety implication of any temporary exemption granted by this agency. In the present case, we are addressing a petition for a temporary exemption from the advanced air bag requirements submitted by a manufacturer of a plug-in hybrid electric car. The basis of the petition was substantial economic hardship to a manufacturer that has tried in good faith to comply with the standard. srobinson on DSKHWCL6B1PROD with NOTICES II. Statutory Basis for Requested Part 555 Exemption The National Traffic and Motor Vehicle Safety Act, codified as 49 U.S.C. Chapter 301, provides the Secretary of Transportation authority to exempt, on a temporary basis and under specified circumstances, motor vehicles from a motor vehicle safety standard or bumper standard. This authority is set forth at 49 U.S.C. 30113. The Secretary has delegated the authority for this section to NHTSA. NHTSA established part 555, Temporary Exemption from Motor Vehicle Safety and Bumper Standards, to implement the statutory provisions concerning temporary exemptions. 2 See, e.g., grant of petition to Panoz, 72 FR 28759 (May 22, 2007), or grant of petition to Koenigsegg, 72 FR 17608 (April 9, 2007). VerDate Mar<15>2010 19:02 Sep 20, 2010 Jkt 220001 Vehicle manufacturers may apply for temporary exemptions on several bases, one of which is that compliance would cause substantial economic hardship to a manufacturer that has tried in good faith to comply with the standard. A petitioner must provide specified information in submitting a petition for exemption. These requirements are specified in 49 CFR 555.5, and include a number of items. Foremost among them are that the petitioner must set forth the basis of the application under § 555.6, and the reasons why the exemption would be in the public interest and consistent with the objectives of 49 U.S.C. Chapter 301. A manufacturer is eligible to apply for a hardship exemption if its total motor vehicle production in its most recent year of production did not exceed 10,000 vehicles, as determined by the NHTSA Administrator (49 U.S.C. 30113). In determining whether a manufacturer of a vehicle meets that criterion, NHTSA considers whether a second vehicle manufacturer also might be deemed the manufacturer of that vehicle. The statutory provisions governing motor vehicle safety (49 U.S.C. Chapter 301) do not state that a manufacturer has substantial responsibility as manufacturer of a vehicle simply because it owns or controls a second manufacturer that assembled that vehicle. However, the agency considers the statutory definition of ‘‘manufacturer’’ (49 U.S.C. 30102) to be sufficiently broad to include sponsors, depending on the circumstances. Thus, NHTSA has stated that a manufacturer may be deemed to be a sponsor and thus a manufacturer of a vehicle assembled by a second manufacturer if the first manufacturer had a substantial role in the development and manufacturing process of that vehicle. Finally, while 49 U.S.C. 30113(b) states that exemptions from a Safety Act standard are to be granted on a ‘‘temporary basis,’’ 3 the statute also expressly provides for renewal of an exemption on reapplication. Manufacturers are nevertheless cautioned that the agency’s decision to grant an initial petition in no way predetermines that the agency will repeatedly grant renewal petitions, thereby imparting semi-permanent exemption from a safety standard. Exempted manufacturers seeking renewal must bear in mind that the agency is directed to consider financial hardship as but one factor, along with the manufacturer’s on-going good faith 3 49 PO 00000 U.S.C. 30113(b)(1). Frm 00114 Fmt 4703 Sfmt 4703 efforts to comply with the regulation, the public interest, consistency with the Safety Act, generally, as well as other such matters provided in the statute. III. Fisker’s Petition Fisker submitted a petition for exemption from certain requirements of FMVSS No. 208, Occupant Crash Protection, pursuant to 49 CFR part 555, Temporary Exemption from Motor Vehicle Safety and Bumper Standards. Specifically, the petition requested an exemption from paragraphs S14, S15, S17, S19, S21, S23, and S25 of FMVSS No. 208, which relate to the advanced air bag requirements. However, the petitioner stated that it will be compliant with S14.5.1(b), barrier test requirements using belted 50th percentile adult male dummies. The basis of the petition was substantial economic hardship to a manufacturer that has tried in good faith to comply with the standard. In its petition, Fisker requested an exemption for the Karma model ‘‘for a period of one year from the date of NHTSA approval or until May 24, 2011, by which time Fisker will be able to fully comply with the requirements of Federal Motor Vehicle Safety Standard 208.’’ In a submission dated July 30, 2010, Fisker 4 stated that due to delays in vehicle availability for air bag system development and testing, it was requesting that the exemption be for ‘‘a period of one year from the date of NHTSA approval, by which time Fisker will be able to fully comply with the requirements of Federal Motor Vehicle Safety Standard 208.’’ According to the petition, Fisker is a privately held company incorporated in the State of Delaware, with headquarters in California. Its total motor vehicle production during the 12 months preceding the filing of the petition was 0 vehicles. We note that Fisker Automotive was established in September 2007 as a joint venture of Fisker Coachbuild, LLC and Quantum Fuel System Technologies Worldwide, Inc. The petitioner stated that the Fisker Karma is a completely new passenger car model. Design and development of the Karma began in late 2007. The Karma is being designed and developed to meet all applicable FMVSS and EEC regulations, including the installation of eight air bags on the coupe version and six air bags on the convertible version. Fisker stated the air bag system is being developed through cooperation with 4 The July 30. 2010 submission was submitted on behalf of Fisker by Global Vehicle Services Corporation. E:\FR\FM\21SEN1.SGM 21SEN1 Federal Register / Vol. 75, No. 182 / Tuesday, September 21, 2010 / Notices srobinson on DSKHWCL6B1PROD with NOTICES Takata, Tass, and Bosch, which have been granted contracts to complete the development of the air bag systems. The petitioner stated that these companies were retained in 2008/2009 and are continuing the efforts to develop an air bag system that is fully compliant with the requirements of FMVSS No. 208. Fisker stated that it subcontracted the advanced air bag system development to experienced outside companies, and that the air bag development costs represent a very significant expenditure to the company. It provided information to show that its costs total $7,714,857. Fisker stated that without a temporary exemption, which would enable the company to generate funds through the sale of vehicles, it may not be able to sustain the air bag and vehicle development programs, causing substantial economic hardship to the company. The petitioner stated that if the exemption petition is approved, the Karma models sold under the exemption will be compliant with all FMVSSs, with the exception of certain sections of FMVSS No. 208. Fisker stated that the coupe version will be equipped with eight functional air bags (front, side, knee and curtain air bags), and the convertible version will be equipped with six functional air bags (front, side and knee air bags). Both versions will include seat belts with pretensioners and load limiters. Also, according to the petitioner, both models will be compliant with the 50th percentile adult male dummy unbelted test requirements contained in section 13 of the standard. Fisker argued that sales of the Karma are in the public interest. It stated that the Karma ‘‘is leading the way towards the introduction of advanced lowemission vehicle technologies to the US and world markets.’’ Fisker stated that the Karma will be the first plug-in hybrid passenger car available for purchase by the general public. It also cited benefits of employment opportunities. IV. Notice of Receipt On June 2, 2010 we published in the Federal Register (75 FR 30900) a notice of receipt of Fisker’s petition for temporary exemption, and provided an opportunity for public comment. We did not receive any substantive comments.5 5 Chrysler submitted a comment noting that the petition from Fisker was not posted in the docket until late in the comment period, and requested a ‘‘nominal amount of time (<10 business days)’’ to fully consider the petition and finalize comments. However, Chrysler did not subsequently submit a substantive comment. VerDate Mar<15>2010 19:02 Sep 20, 2010 Jkt 220001 V. Agency Analysis and Decision In this section we provide our analysis and decision regarding Fisker’s temporary exemption request concerning advanced air bag requirements of FMVSS No. 208. As discussed below, we are granting Fisker’s petition for the Karma to be exempted, for a period of one year, from S14 (apart from S14.5.1(b)), S15, S17, S19, S21, S23, and S25 of FMVSS No. 208. In addition to certifying compliance with the belted 50th percentile adult male dummy barrier impact requirements in S14.5.1(b), Fisker must certify to the unbelted 50th percentile adult male dummy barrier impact test requirement that applied prior to September 1, 2006 (S5.1.2(a)). For purposes of this exemption, the unbelted sled test in S13 is an acceptable option for that requirement. a. Issues Related to Eligibility As discussed above, a manufacturer is eligible to apply for an economic hardship exemption if its total motor vehicle production in its most recent year of production did not exceed 10,000 vehicles, as determined by the NHTSA Administrator (49 U.S.C. 30113). Moreover, in determining whether a manufacturer of a vehicle meets that criterion, NHTSA considers whether a second vehicle manufacturer also might be deemed the manufacturer of that vehicle. While Fisker developed the Karma, the vehicle will be assembled in Finland by Valmet Automotive (Valmet). The petitioner can be considered a manufacturer of the Karma as a ‘‘sponsor,’’ even though the vehicle will be assembled by Valmet. In considering the issue of eligibility in the present situation, Fisker does not currently manufacture any vehicles. Therefore, there is no issue as to whether it manufactures vehicles other than the Karma. We next consider whether persons other than Fisker can be considered to manufacture the Karma. The answer is yes. Valmet will be a manufacturer of the Karma by virtue of assembling it. See 49 U.S.C. 30102(a)(5). Given that both Fisker and Valmet can be considered manufacturers of the Karma, there are a number of potential issues concerning how the agency should analyze the petition, e.g., whether to consider one or both companies with respect to the 10,000 vehicle limitation for eligibility, hardship, good faith efforts, etc. We note, for example, that we have in the past cited the possible situation of large manufacturers potentially avoiding the PO 00000 Frm 00115 Fmt 4703 Sfmt 4703 57551 statutory 10,000 vehicle limit by engaging in joint ventures with small companies and having the small company submit the petition.6 Valmet is a company which is known as a contract manufacturer of specialty cars. Among other things, it has manufactured the Boxster and Cayman for Porsche. Fisker introduced the Karma in January 2008 at the North American International Auto Show in Detroit. In July 2008, Valmet issued a press release titled ‘‘Valmet Automotive announces a Letter of Intent for an Assembly Contract with Fisker Automotive.’’ The press release indicated that Valmet was chosen as the engineering and manufacturing supplier for Fisker after an extensive global search. In November 2008, Valmet issued a press release titled ‘‘Valmet Automotive and Fisker Automotive have signed the cooperation agreement.’’ As noted above, Fisker stated in its petition that the Karma is a completely new passenger car model. According to the petitioner, the chassis, body, and powertrain are being designed and developed by Fisker with assistance from a large number of suppliers, which include EDAG, Magna International, Quantum Technologies, TRW, Tass, Lear, Visteon, Rousch, Global Vehicle Services, General Motors, ESG, and Takata Holdings. Based on the available information, we believe that Valmet’s role with the Karma is primarily that of an assembly contractor, i.e., Valmet did not play a significant role in the development of the vehicle at issue. We also note that, as indicated above, the petitioner stated that the Karma is a completely new passenger car model. Given the above, we believe Fisker should be considered eligible to apply for an economic hardship exemption without regard to the circumstances of Valmet. While Valmet is also considered a manufacturer of the Karma by virtue of assembling it, the role of an assembly contractor is a relatively limited one in the overall production of a vehicle. We believe that this particular situation does not raise concerns along the lines of a large manufacturer potentially avoiding the statutory 10,000 vehicle limit by engaging in a joint venture with a small company and having the small company submit the petition. It is not necessary in responding to this petition to resolve all potential issues related to eligibility that may arise in a situation where more than one company can be considered a 6 See grant of petition to Tesla Motors, Inc., 73 FR 4944, 4948 (Jan. 28, 2008). E:\FR\FM\21SEN1.SGM 21SEN1 57552 Federal Register / Vol. 75, No. 182 / Tuesday, September 21, 2010 / Notices manufacturer of a vehicle that is the subject of an economic hardship exemption. We will address these issues as necessary in the context of a specific petition or contemplated manufacturer relationship that is brought before us. b. Economic Hardship As noted earlier, Fisker stated that it subcontracted the advanced air bag system development to experienced outside companies, and that the air bag development costs represent a very significant expenditure to the company. It provided information to show that its costs total $7,714,857. Fisker stated that without a temporary exemption, which would enable the company to generate funds through the sale of vehicles, it may not be able to sustain the air bag and vehicle development programs, causing substantial financial economic hardship to the company. Fisker estimated that if the exemption is approved, it would have net income (loss) of $ (21,724,141) in 2011 and net income of $ 188,768,234 in 2012. The petitioner estimated that without the exemption, it would have net income (loss) of $ (50,592,209) in 2011 and net income (loss) of $ (132,268,961) in 2012. After reviewing the financial and other information provided by Fisker, we believe that company has shown substantial economic hardship. Without the exemption, Fisker will not be able to begin manufacturing and selling the Karma during the one-year period it needs to complete the design and development programs necessary to meet the advanced air bag requirements. Moreover, the company does not have any other models to sell. Considering the overall circumstances of the company, the financial impacts would represent substantial economic hardship. srobinson on DSKHWCL6B1PROD with NOTICES c. Good Faith Efforts To Comply As noted earlier, the petitioner stated that the Fisker Karma is a completely new passenger car model. Design and development of the Karma began in late 2007. The Karma is being designed and developed to meet all applicable FMVSSs and European Economic Community (EEC) regulations, including the installation of eight air bags on the coupe version and six air bags on the convertible version. Fisker stated the air bag system is being developed through cooperation with Takata, Tass, and Bosch, which have been granted contracts to complete the development of the air bag systems. The petitioner stated that these companies were retained in 2008/2009 and are continuing the efforts to develop an air VerDate Mar<15>2010 19:02 Sep 20, 2010 Jkt 220001 bag system that is fully compliant with the requirements of FMVSS No. 208. Fisker stated that it subcontracted the advanced air bag system development to experienced outside companies, and that the air bag development costs represent a very significant expenditure to the company. It provided information to show that its costs total $7,714,857. Fisker stated that without a temporary exemption, which would enable the company to generate funds through the sale of vehicles, it may not be able to sustain the air bag and vehicle development programs, causing substantial financial economic hardship to the company. After reviewing Fisker’s petition, we believe that company has made good faith efforts to comply with the advanced air bag requirements. Fisker is a new company, and the Karma is a completely new passenger car model. While the company is designing and developing the Karma to comply with all of the FMVSSs, it is requesting a oneyear exemption from the advanced air bag requirements to enable it to begin manufacturing and selling vehicles while it completes the design and development programs necessary to meet the advanced air bag requirements. We note that Fisker has contracts in place for this development. We also note that Fisker has made significant financial investments in the Karma, including the occupant protection system. Fisker stated if the exemption petition is approved, the Karma models sold under the exemption will be compliant with all FMVSSs with the exception of the advanced air bag provisions. The coupe version will be equipped with eight functional air bags (front, side, knee and curtain air bags). The convertible version will be equipped with six functional air bags (front, side and knee air bags). Both versions will include seat belts with pretensioners and load limiters. According to the petitioner, both models with be compliant with the 50th percentile male unbelted test requirements contained in S13 of FMVSS No. 208. In sum, we believe that considering Fisker’s overall situation, the efforts that company has made to date, the plans it has in place, and the fact that it intends to fully comply with the advanced air bag requirements within one year, Fisker has made good faith efforts to comply with those requirements. d. Public Interest Considerations NHTSA has traditionally found that the public interest is served by affording consumers a wider variety of motor vehicles, by encouraging the PO 00000 Frm 00116 Fmt 4703 Sfmt 4703 development of fuel-efficient and alternative-energy vehicles, and providing additional employment opportunities. We believe that all three of these public interest considerations would be served by granting Fisker’s petition. We note that on April 23, 2010, the Department of Energy (DOE) issued a press release announcing the closing of a $529 million loan to Fisker for the development and production of two lines of plug-in hybrid electric vehicles (PHEV). DOE stated that ‘‘the loan will support the Karma, a full-size, four-door sports sedan, and a line of family oriented models being developed under the company’s Project NINA program.’’ DOE stated that Fisker expects to manufacture the Karma and Project NINA lines at a recently shuttered General Motors (GM) factory in Wilmington, Delaware, and that the company anticipates that it will employ 2,000 American assembly workers. Industry experts expect that domestic parts suppliers and service providers also will increase employment substantially. According to the DOE press release: • Fisker’s plug-in hybrid products will be among the first to market and will help to accelerate the introduction of fuel-saving electrified vehicles in the U.S. • Initially, Fisker will use the proceeds of the loan for qualifying engineering integration costs as it works with primarily U.S. suppliers to incorporate components into the Karma’s design. The engineering integration work will be conducted in Irvine, California, where engineers will design tools and equipment and develop manufacturing processes. The Karma is scheduled to appear in showrooms in late 2010. The second stage will involve the purchase and retooling of the former GM plant to manufacture the Project NINA line of PHEVs, which is expected to begin rolling off the assembly line in late 2012. • Fisker automobiles are driven by electric motors that get their power from a rechargeable Lithium-ion battery, or, when that is depleted, by a generator driven by an efficient gas-powered engine. The Karma and Project NINA models will have an all-electric, tailpipe-emission-free range of 40 to 50 miles on a full charge, more than most Americans drive each day. The battery can be charged at home overnight. Using gas and electric power, Fisker plug-in hybrids are expected to have a cruising range of up to 300 miles. While some of the items discussed in the DOE press release are longer-term, the granting of Fisker’s petition will E:\FR\FM\21SEN1.SGM 21SEN1 57553 srobinson on DSKHWCL6B1PROD with NOTICES Federal Register / Vol. 75, No. 182 / Tuesday, September 21, 2010 / Notices enable it to begin the manufacture and sale of the Karma earlier than it could otherwise. This will provide additional consumer choice in selecting a motor vehicle, encourage the development of fuel-efficient and alternative-energy vehicles, and provide additional employment opportunities. It will also enable Fisker to generate funds through the sale of vehicles, which will help it sustain vehicle development plans, including meeting the advanced air bag requirements. We have also considered safety issues related to the exemption requested by Fisker. With respect to transporting children, Fisker noted that the Karma is equipped with two rear seats. Each rear seat is equipped with a child seat LATCH system.7 Fisker stated that child seats may be safely placed in these rear seat positions. The Karma will also have the permanently affixed ‘‘sun visor air bag warning label’’ and a removable ‘‘warning label on the dashboard’’ that NHTSA developed/requires for vehicles without advanced air bags. Thus, parents and others will be able to transport children in the rear seats of the Karma without exposing them to the risks of air bags, and the vehicles will have warning labels concerning the risks of air bags. This helps minimize any safety disbenefits of the vehicle not meeting requirements for advanced air bags. We also note again that the coupe version of the Karma will be equipped with eight functional air bags (front, side, knee and curtain air bags). The convertible version will be equipped with six functional air bags (front, side and knee air bags). Both versions will include seat belts with pretensioners and load limiters. Given the relatively small number of vehicles that will be produced during the one-year exemption and the above discussion, we believe that the requested exemption would have a negligible effect on motor vehicle safety. We note that, as explained below, prospective purchasers will be notified that the vehicle is exempted from the specified advanced air bag requirements of Standard No. 208. Under § 555.9(b), a manufacturer of an exempted passenger car must affix securely to the windshield or side window of each exempted vehicle a label containing a statement that the vehicle conforms to all applicable FMVSSs in effect on the date of manufacture ‘‘except for Standard Nos. [listing the standards by number and title for which an exemption has been granted] exempted 7 Lower Anchors and Tethers for Children (LATCH) Restraint System. VerDate Mar<15>2010 19:02 Sep 20, 2010 Jkt 220001 pursuant to NHTSA Exemption No. lllll.’’ This label notifies prospective purchasers about the exemption and its subject. Under § 555.9(c), this information must also be included on the vehicle’s certification label. The text of § 555.9 does not expressly indicate how the required statement on the two labels should read in situations where an exemption covers part but not all of a FMVSS. In this case, we believe that a statement that the vehicle has been exempted from Standard No. 208 generally, without an indication that the exemption is limited to the specified advanced air bag provisions, could be misleading. A consumer might incorrectly believe that the vehicle has been exempted from all of Standard No. 208’s requirements. Moreover, we believe that the addition of a reference to such provisions by number without an indication of its subject matter would be of little use to consumers, since they would not know the subject of those specific provisions. For these reasons, we believe the two labels should read in relevant part, ‘‘except for S14 (apart from S14.5.1(b)), S15, S17, S19, S21, S23, and S25 (Advanced Air Bag Requirements) of Standard No. 208, Occupant Crash Protection, exempted pursuant to * * *.’’ We note that the phrase ‘‘Advanced Air Bag Requirements’’ is an abbreviated form of the title of S14 of Standard No. 208. We believe it is reasonable to interpret § 555.9 as requiring this language. e. Decision In consideration of the foregoing, we conclude that compliance with the advanced air bag requirements of FMVSS No. 208, Occupant Crash Protection, would cause substantial economic hardship to a manufacturer that has tried in good faith to comply with the standard. We further conclude that granting of an exemption would be in the public interest and consistent with the objectives of traffic safety. In accordance with 49 U.S.C. 30113(b)(3)(B)(i), Fisker is granted NHTSA Temporary Exemption No. EX 10–01, from S14 (apart from S14.5.1(b)), S15, S17, S19, S21, S23, and S25 of FMVSS No. 208. In addition to certifying compliance with the belted 50th percentile adult male dummy barrier impact requirements in S14.5.1(b), Fisker must certify to the unbelted 50th percentile adult male dummy barrier impact test requirement that applied prior to September 1, 2006 (S5.1.2(a)). For purposes of this exemption, the unbelted sled test in S13 is an acceptable option for that requirement. PO 00000 Frm 00117 Fmt 4703 Sfmt 4703 The exemption is for the Karma and shall remain in effect for one year as indicated in the DATES section of this document. (49 U.S.C. 30113; delegations of authority at 49 CFR 1.50. and 501.8) Issued on: September 15, 2010. David L. Strickland, Administrator. [FR Doc. 2010–23472 Filed 9–20–10; 8:45 am] BILLING CODE 4910–59–P DEPARTMENT OF TRANSPORTATION Surface Transportation Board [STB Docket No. CU 159] Indexing the Annual Operating Revenues of Railroads The Surface Transportation Board (STB) is publishing the annual inflationadjusted index factors for 2009. These factors are used by the railroads to adjust their gross annual operating revenues for classification purposes. This indexing methodology insures that railroads are classified based on real business expansion and not from the affects of inflation. Classification is important because it determines the extent to which individual railroads must comply with STB reporting requirements. The STB’s annual inflation-adjusted factors are based on the annual average Railroad’s Freight Price Index which is developed by the Bureau of Labor Statistics (BLS). The STB’s deflator factor is used to deflate revenues for comparison with established revenue thresholds. The base year for railroads is 1991. The inflation index factors are presented as follows: STB RAILROAD INFLATION-ADJUSTED INDEX AND DEFLATOR FACTOR TABLE Year 1991 1992 1993 1994 1995 1996 1997 1998 1999 .......................... .......................... .......................... .......................... .......................... .......................... .......................... .......................... .......................... Index 409.50 411.80 415.50 418.80 418.17 417.46 419.67 424.54 423.01 Deflator 1100.00 99.45 98.55 97.70 97.85 98.02 97.50 96.38 96.72 1 Montana Rail Link, Inc., and Wisconsin Central Ltd., Joint Petition For Rulemaking With Respect To 49 CFR Part 1201, 8 I.C.C. 2d 625 (1992) raised the revenue classification level for Class I railroads from $50 million (1978 dollars) to $250 million (1991 dollars), effective for the reporting year beginning January 1, 1992. The Class II threshold was also raised from $10 million (1978 dollars) to $20 million (1991 dollars). E:\FR\FM\21SEN1.SGM 21SEN1

Agencies

[Federal Register Volume 75, Number 182 (Tuesday, September 21, 2010)]
[Notices]
[Pages 57549-57553]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-23472]


-----------------------------------------------------------------------

DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

[Docket No. NHTSA-2010-0069]


Fisker Automotive; Grant of Application for Temporary Exemption 
From Advanced Air Bag Requirements of FMVSS No. 208

AGENCY: National Highway Traffic Safety Administration (NHTSA), 
Department of Transportation (DOT).

ACTION: Notice of grant of petition for temporary exemption from 
certain provisions of Federal Motor Vehicle Safety Standard (FMVSS) No. 
208, Occupant Crash Protection.

-----------------------------------------------------------------------

SUMMARY: This notice grants the petition of Fisker Automotive 
Corporation (Fisker) from certain advanced air bag requirements of 
FMVSS No. 208, for the Karma model. The basis for the application is 
that compliance would cause substantial economic hardship to a 
manufacturer that has tried in good faith to comply with the standard. 
This action follows our publication in the Federal Register of a 
document announcing receipt of Fisker's petition and soliciting public 
comments.

DATES: The exemption is effective immediately and remains in effect 
until September 21, 2011.

FOR FURTHER INFORMATION CONTACT: Edward Glancy, Office of the Chief 
Counsel, NCC-112, National Highway Traffic Safety Administration, 1200 
New Jersey Avenue, SE., West Building 4th Floor, Room W41-326, 
Washington, DC 20590. Telephone: (202) 366-2992; Fax: (202) 366-3820.

SUPPLEMENTARY INFORMATION:

I. Advanced Air Bag Requirements and Small Volume Manufacturers

    In 2000, NHTSA upgraded the requirements for air bags in passenger 
cars and light trucks, requiring what are commonly known as ``advanced 
air bags.'' \1\ The upgrade was designed to meet the goals of improving 
protection for occupants of all sizes, belted and unbelted, in 
moderate-to-high-speed crashes, and of minimizing the risks posed by 
air bags to infants, children, and other occupants, especially in low-
speed crashes.
---------------------------------------------------------------------------

    \1\ See 65 FR 30680 (May 12, 2000).
---------------------------------------------------------------------------

    The advanced air bag requirements were a culmination of a 
comprehensive plan that the agency announced in 1996 to address the 
adverse effects of air bags. This plan also included an extensive 
consumer education program to

[[Page 57550]]

encourage the placement of children in rear seats.
    The new requirements were phased in beginning with the 2004 model 
year. Small volume manufacturers were not subject to the advanced air 
bag requirements until September 1, 2006.
    In recent years, NHTSA has addressed a number of petitions for 
exemption from the advanced air bag requirements of FMVSS No. 208. The 
majority of these requests have come from small manufacturers which 
have petitioned on the basis of substantial economic hardship to a 
manufacturer that has tried in good faith to comply with the standard. 
NHTSA has granted a number of these petitions, usually in situations 
where the manufacturer is supplying standard air bags in lieu of 
advanced air bags.\2\ In addressing these petitions, NHTSA has 
recognized that small manufacturers may face particular difficulties in 
acquiring or developing advanced air bag systems.
---------------------------------------------------------------------------

    \2\ See, e.g., grant of petition to Panoz, 72 FR 28759 (May 22, 
2007), or grant of petition to Koenigsegg, 72 FR 17608 (April 9, 
2007).
---------------------------------------------------------------------------

    The agency has carefully tracked occupant fatalities resulting from 
air bag deployment. Our data indicate that the agency's efforts in the 
area of consumer education and manufacturers' providing depowered air 
bags were successful in reducing air bag fatalities even before 
advanced air bag requirements were implemented.
    As always, we are concerned about the potential safety implication 
of any temporary exemption granted by this agency. In the present case, 
we are addressing a petition for a temporary exemption from the 
advanced air bag requirements submitted by a manufacturer of a plug-in 
hybrid electric car. The basis of the petition was substantial economic 
hardship to a manufacturer that has tried in good faith to comply with 
the standard.

II. Statutory Basis for Requested Part 555 Exemption

    The National Traffic and Motor Vehicle Safety Act, codified as 49 
U.S.C. Chapter 301, provides the Secretary of Transportation authority 
to exempt, on a temporary basis and under specified circumstances, 
motor vehicles from a motor vehicle safety standard or bumper standard. 
This authority is set forth at 49 U.S.C. 30113. The Secretary has 
delegated the authority for this section to NHTSA.
    NHTSA established part 555, Temporary Exemption from Motor Vehicle 
Safety and Bumper Standards, to implement the statutory provisions 
concerning temporary exemptions. Vehicle manufacturers may apply for 
temporary exemptions on several bases, one of which is that compliance 
would cause substantial economic hardship to a manufacturer that has 
tried in good faith to comply with the standard.
    A petitioner must provide specified information in submitting a 
petition for exemption. These requirements are specified in 49 CFR 
555.5, and include a number of items. Foremost among them are that the 
petitioner must set forth the basis of the application under Sec.  
555.6, and the reasons why the exemption would be in the public 
interest and consistent with the objectives of 49 U.S.C. Chapter 301.
    A manufacturer is eligible to apply for a hardship exemption if its 
total motor vehicle production in its most recent year of production 
did not exceed 10,000 vehicles, as determined by the NHTSA 
Administrator (49 U.S.C. 30113).
    In determining whether a manufacturer of a vehicle meets that 
criterion, NHTSA considers whether a second vehicle manufacturer also 
might be deemed the manufacturer of that vehicle. The statutory 
provisions governing motor vehicle safety (49 U.S.C. Chapter 301) do 
not state that a manufacturer has substantial responsibility as 
manufacturer of a vehicle simply because it owns or controls a second 
manufacturer that assembled that vehicle. However, the agency considers 
the statutory definition of ``manufacturer'' (49 U.S.C. 30102) to be 
sufficiently broad to include sponsors, depending on the circumstances. 
Thus, NHTSA has stated that a manufacturer may be deemed to be a 
sponsor and thus a manufacturer of a vehicle assembled by a second 
manufacturer if the first manufacturer had a substantial role in the 
development and manufacturing process of that vehicle.
    Finally, while 49 U.S.C. 30113(b) states that exemptions from a 
Safety Act standard are to be granted on a ``temporary basis,'' \3\ the 
statute also expressly provides for renewal of an exemption on 
reapplication. Manufacturers are nevertheless cautioned that the 
agency's decision to grant an initial petition in no way predetermines 
that the agency will repeatedly grant renewal petitions, thereby 
imparting semi-permanent exemption from a safety standard. Exempted 
manufacturers seeking renewal must bear in mind that the agency is 
directed to consider financial hardship as but one factor, along with 
the manufacturer's on-going good faith efforts to comply with the 
regulation, the public interest, consistency with the Safety Act, 
generally, as well as other such matters provided in the statute.
---------------------------------------------------------------------------

    \3\ 49 U.S.C. 30113(b)(1).
---------------------------------------------------------------------------

III. Fisker's Petition

    Fisker submitted a petition for exemption from certain requirements 
of FMVSS No. 208, Occupant Crash Protection, pursuant to 49 CFR part 
555, Temporary Exemption from Motor Vehicle Safety and Bumper 
Standards. Specifically, the petition requested an exemption from 
paragraphs S14, S15, S17, S19, S21, S23, and S25 of FMVSS No. 208, 
which relate to the advanced air bag requirements. However, the 
petitioner stated that it will be compliant with S14.5.1(b), barrier 
test requirements using belted 50th percentile adult male dummies. The 
basis of the petition was substantial economic hardship to a 
manufacturer that has tried in good faith to comply with the standard.
    In its petition, Fisker requested an exemption for the Karma model 
``for a period of one year from the date of NHTSA approval or until May 
24, 2011, by which time Fisker will be able to fully comply with the 
requirements of Federal Motor Vehicle Safety Standard 208.'' In a 
submission dated July 30, 2010, Fisker \4\ stated that due to delays in 
vehicle availability for air bag system development and testing, it was 
requesting that the exemption be for ``a period of one year from the 
date of NHTSA approval, by which time Fisker will be able to fully 
comply with the requirements of Federal Motor Vehicle Safety Standard 
208.''
---------------------------------------------------------------------------

    \4\ The July 30. 2010 submission was submitted on behalf of 
Fisker by Global Vehicle Services Corporation.
---------------------------------------------------------------------------

    According to the petition, Fisker is a privately held company 
incorporated in the State of Delaware, with headquarters in California. 
Its total motor vehicle production during the 12 months preceding the 
filing of the petition was 0 vehicles. We note that Fisker Automotive 
was established in September 2007 as a joint venture of Fisker 
Coachbuild, LLC and Quantum Fuel System Technologies Worldwide, Inc.
    The petitioner stated that the Fisker Karma is a completely new 
passenger car model. Design and development of the Karma began in late 
2007. The Karma is being designed and developed to meet all applicable 
FMVSS and EEC regulations, including the installation of eight air bags 
on the coupe version and six air bags on the convertible version. 
Fisker stated the air bag system is being developed through cooperation 
with

[[Page 57551]]

Takata, Tass, and Bosch, which have been granted contracts to complete 
the development of the air bag systems. The petitioner stated that 
these companies were retained in 2008/2009 and are continuing the 
efforts to develop an air bag system that is fully compliant with the 
requirements of FMVSS No. 208.
    Fisker stated that it subcontracted the advanced air bag system 
development to experienced outside companies, and that the air bag 
development costs represent a very significant expenditure to the 
company. It provided information to show that its costs total 
$7,714,857. Fisker stated that without a temporary exemption, which 
would enable the company to generate funds through the sale of 
vehicles, it may not be able to sustain the air bag and vehicle 
development programs, causing substantial economic hardship to the 
company.
    The petitioner stated that if the exemption petition is approved, 
the Karma models sold under the exemption will be compliant with all 
FMVSSs, with the exception of certain sections of FMVSS No. 208. Fisker 
stated that the coupe version will be equipped with eight functional 
air bags (front, side, knee and curtain air bags), and the convertible 
version will be equipped with six functional air bags (front, side and 
knee air bags). Both versions will include seat belts with 
pretensioners and load limiters. Also, according to the petitioner, 
both models will be compliant with the 50th percentile adult male dummy 
unbelted test requirements contained in section 13 of the standard.
    Fisker argued that sales of the Karma are in the public interest. 
It stated that the Karma ``is leading the way towards the introduction 
of advanced low-emission vehicle technologies to the US and world 
markets.'' Fisker stated that the Karma will be the first plug-in 
hybrid passenger car available for purchase by the general public. It 
also cited benefits of employment opportunities.

IV. Notice of Receipt

    On June 2, 2010 we published in the Federal Register (75 FR 30900) 
a notice of receipt of Fisker's petition for temporary exemption, and 
provided an opportunity for public comment. We did not receive any 
substantive comments.\5\
---------------------------------------------------------------------------

    \5\ Chrysler submitted a comment noting that the petition from 
Fisker was not posted in the docket until late in the comment 
period, and requested a ``nominal amount of time (<10 business 
days)'' to fully consider the petition and finalize comments. 
However, Chrysler did not subsequently submit a substantive comment.
---------------------------------------------------------------------------

V. Agency Analysis and Decision

    In this section we provide our analysis and decision regarding 
Fisker's temporary exemption request concerning advanced air bag 
requirements of FMVSS No. 208.
    As discussed below, we are granting Fisker's petition for the Karma 
to be exempted, for a period of one year, from S14 (apart from 
S14.5.1(b)), S15, S17, S19, S21, S23, and S25 of FMVSS No. 208. In 
addition to certifying compliance with the belted 50th percentile adult 
male dummy barrier impact requirements in S14.5.1(b), Fisker must 
certify to the unbelted 50th percentile adult male dummy barrier impact 
test requirement that applied prior to September 1, 2006 (S5.1.2(a)). 
For purposes of this exemption, the unbelted sled test in S13 is an 
acceptable option for that requirement.

a. Issues Related to Eligibility

    As discussed above, a manufacturer is eligible to apply for an 
economic hardship exemption if its total motor vehicle production in 
its most recent year of production did not exceed 10,000 vehicles, as 
determined by the NHTSA Administrator (49 U.S.C. 30113). Moreover, in 
determining whether a manufacturer of a vehicle meets that criterion, 
NHTSA considers whether a second vehicle manufacturer also might be 
deemed the manufacturer of that vehicle.
    While Fisker developed the Karma, the vehicle will be assembled in 
Finland by Valmet Automotive (Valmet). The petitioner can be considered 
a manufacturer of the Karma as a ``sponsor,'' even though the vehicle 
will be assembled by Valmet.
    In considering the issue of eligibility in the present situation, 
Fisker does not currently manufacture any vehicles. Therefore, there is 
no issue as to whether it manufactures vehicles other than the Karma.
    We next consider whether persons other than Fisker can be 
considered to manufacture the Karma. The answer is yes. Valmet will be 
a manufacturer of the Karma by virtue of assembling it. See 49 U.S.C. 
30102(a)(5).
    Given that both Fisker and Valmet can be considered manufacturers 
of the Karma, there are a number of potential issues concerning how the 
agency should analyze the petition, e.g., whether to consider one or 
both companies with respect to the 10,000 vehicle limitation for 
eligibility, hardship, good faith efforts, etc. We note, for example, 
that we have in the past cited the possible situation of large 
manufacturers potentially avoiding the statutory 10,000 vehicle limit 
by engaging in joint ventures with small companies and having the small 
company submit the petition.\6\
---------------------------------------------------------------------------

    \6\ See grant of petition to Tesla Motors, Inc., 73 FR 4944, 
4948 (Jan. 28, 2008).
---------------------------------------------------------------------------

    Valmet is a company which is known as a contract manufacturer of 
specialty cars. Among other things, it has manufactured the Boxster and 
Cayman for Porsche.
    Fisker introduced the Karma in January 2008 at the North American 
International Auto Show in Detroit. In July 2008, Valmet issued a press 
release titled ``Valmet Automotive announces a Letter of Intent for an 
Assembly Contract with Fisker Automotive.'' The press release indicated 
that Valmet was chosen as the engineering and manufacturing supplier 
for Fisker after an extensive global search. In November 2008, Valmet 
issued a press release titled ``Valmet Automotive and Fisker Automotive 
have signed the cooperation agreement.''
    As noted above, Fisker stated in its petition that the Karma is a 
completely new passenger car model. According to the petitioner, the 
chassis, body, and powertrain are being designed and developed by 
Fisker with assistance from a large number of suppliers, which include 
EDAG, Magna International, Quantum Technologies, TRW, Tass, Lear, 
Visteon, Rousch, Global Vehicle Services, General Motors, ESG, and 
Takata Holdings.
    Based on the available information, we believe that Valmet's role 
with the Karma is primarily that of an assembly contractor, i.e., 
Valmet did not play a significant role in the development of the 
vehicle at issue. We also note that, as indicated above, the petitioner 
stated that the Karma is a completely new passenger car model.
    Given the above, we believe Fisker should be considered eligible to 
apply for an economic hardship exemption without regard to the 
circumstances of Valmet. While Valmet is also considered a manufacturer 
of the Karma by virtue of assembling it, the role of an assembly 
contractor is a relatively limited one in the overall production of a 
vehicle. We believe that this particular situation does not raise 
concerns along the lines of a large manufacturer potentially avoiding 
the statutory 10,000 vehicle limit by engaging in a joint venture with 
a small company and having the small company submit the petition.
    It is not necessary in responding to this petition to resolve all 
potential issues related to eligibility that may arise in a situation 
where more than one company can be considered a

[[Page 57552]]

manufacturer of a vehicle that is the subject of an economic hardship 
exemption. We will address these issues as necessary in the context of 
a specific petition or contemplated manufacturer relationship that is 
brought before us.

b. Economic Hardship

    As noted earlier, Fisker stated that it subcontracted the advanced 
air bag system development to experienced outside companies, and that 
the air bag development costs represent a very significant expenditure 
to the company. It provided information to show that its costs total 
$7,714,857. Fisker stated that without a temporary exemption, which 
would enable the company to generate funds through the sale of 
vehicles, it may not be able to sustain the air bag and vehicle 
development programs, causing substantial financial economic hardship 
to the company.
    Fisker estimated that if the exemption is approved, it would have 
net income (loss) of $ (21,724,141) in 2011 and net income of $ 
188,768,234 in 2012. The petitioner estimated that without the 
exemption, it would have net income (loss) of $ (50,592,209) in 2011 
and net income (loss) of $ (132,268,961) in 2012.
    After reviewing the financial and other information provided by 
Fisker, we believe that company has shown substantial economic 
hardship. Without the exemption, Fisker will not be able to begin 
manufacturing and selling the Karma during the one-year period it needs 
to complete the design and development programs necessary to meet the 
advanced air bag requirements. Moreover, the company does not have any 
other models to sell. Considering the overall circumstances of the 
company, the financial impacts would represent substantial economic 
hardship.

c. Good Faith Efforts To Comply

    As noted earlier, the petitioner stated that the Fisker Karma is a 
completely new passenger car model. Design and development of the Karma 
began in late 2007. The Karma is being designed and developed to meet 
all applicable FMVSSs and European Economic Community (EEC) 
regulations, including the installation of eight air bags on the coupe 
version and six air bags on the convertible version. Fisker stated the 
air bag system is being developed through cooperation with Takata, 
Tass, and Bosch, which have been granted contracts to complete the 
development of the air bag systems. The petitioner stated that these 
companies were retained in 2008/2009 and are continuing the efforts to 
develop an air bag system that is fully compliant with the requirements 
of FMVSS No. 208.
    Fisker stated that it subcontracted the advanced air bag system 
development to experienced outside companies, and that the air bag 
development costs represent a very significant expenditure to the 
company. It provided information to show that its costs total 
$7,714,857. Fisker stated that without a temporary exemption, which 
would enable the company to generate funds through the sale of 
vehicles, it may not be able to sustain the air bag and vehicle 
development programs, causing substantial financial economic hardship 
to the company.
    After reviewing Fisker's petition, we believe that company has made 
good faith efforts to comply with the advanced air bag requirements. 
Fisker is a new company, and the Karma is a completely new passenger 
car model. While the company is designing and developing the Karma to 
comply with all of the FMVSSs, it is requesting a one-year exemption 
from the advanced air bag requirements to enable it to begin 
manufacturing and selling vehicles while it completes the design and 
development programs necessary to meet the advanced air bag 
requirements. We note that Fisker has contracts in place for this 
development.
    We also note that Fisker has made significant financial investments 
in the Karma, including the occupant protection system. Fisker stated 
if the exemption petition is approved, the Karma models sold under the 
exemption will be compliant with all FMVSSs with the exception of the 
advanced air bag provisions. The coupe version will be equipped with 
eight functional air bags (front, side, knee and curtain air bags). The 
convertible version will be equipped with six functional air bags 
(front, side and knee air bags). Both versions will include seat belts 
with pretensioners and load limiters. According to the petitioner, both 
models with be compliant with the 50th percentile male unbelted test 
requirements contained in S13 of FMVSS No. 208.
    In sum, we believe that considering Fisker's overall situation, the 
efforts that company has made to date, the plans it has in place, and 
the fact that it intends to fully comply with the advanced air bag 
requirements within one year, Fisker has made good faith efforts to 
comply with those requirements.

d. Public Interest Considerations

    NHTSA has traditionally found that the public interest is served by 
affording consumers a wider variety of motor vehicles, by encouraging 
the development of fuel-efficient and alternative-energy vehicles, and 
providing additional employment opportunities. We believe that all 
three of these public interest considerations would be served by 
granting Fisker's petition.
    We note that on April 23, 2010, the Department of Energy (DOE) 
issued a press release announcing the closing of a $529 million loan to 
Fisker for the development and production of two lines of plug-in 
hybrid electric vehicles (PHEV). DOE stated that ``the loan will 
support the Karma, a full-size, four-door sports sedan, and a line of 
family oriented models being developed under the company's Project NINA 
program.''
    DOE stated that Fisker expects to manufacture the Karma and Project 
NINA lines at a recently shuttered General Motors (GM) factory in 
Wilmington, Delaware, and that the company anticipates that it will 
employ 2,000 American assembly workers. Industry experts expect that 
domestic parts suppliers and service providers also will increase 
employment substantially.
    According to the DOE press release:
     Fisker's plug-in hybrid products will be among the first 
to market and will help to accelerate the introduction of fuel-saving 
electrified vehicles in the U.S.
     Initially, Fisker will use the proceeds of the loan for 
qualifying engineering integration costs as it works with primarily 
U.S. suppliers to incorporate components into the Karma's design. The 
engineering integration work will be conducted in Irvine, California, 
where engineers will design tools and equipment and develop 
manufacturing processes. The Karma is scheduled to appear in showrooms 
in late 2010. The second stage will involve the purchase and retooling 
of the former GM plant to manufacture the Project NINA line of PHEVs, 
which is expected to begin rolling off the assembly line in late 2012.
     Fisker automobiles are driven by electric motors that get 
their power from a rechargeable Lithium-ion battery, or, when that is 
depleted, by a generator driven by an efficient gas-powered engine. The 
Karma and Project NINA models will have an all-electric, tailpipe-
emission-free range of 40 to 50 miles on a full charge, more than most 
Americans drive each day. The battery can be charged at home overnight. 
Using gas and electric power, Fisker plug-in hybrids are expected to 
have a cruising range of up to 300 miles.
    While some of the items discussed in the DOE press release are 
longer-term, the granting of Fisker's petition will

[[Page 57553]]

enable it to begin the manufacture and sale of the Karma earlier than 
it could otherwise. This will provide additional consumer choice in 
selecting a motor vehicle, encourage the development of fuel-efficient 
and alternative-energy vehicles, and provide additional employment 
opportunities. It will also enable Fisker to generate funds through the 
sale of vehicles, which will help it sustain vehicle development plans, 
including meeting the advanced air bag requirements.
    We have also considered safety issues related to the exemption 
requested by Fisker. With respect to transporting children, Fisker 
noted that the Karma is equipped with two rear seats. Each rear seat is 
equipped with a child seat LATCH system.\7\ Fisker stated that child 
seats may be safely placed in these rear seat positions. The Karma will 
also have the permanently affixed ``sun visor air bag warning label'' 
and a removable ``warning label on the dashboard'' that NHTSA 
developed/requires for vehicles without advanced air bags. Thus, 
parents and others will be able to transport children in the rear seats 
of the Karma without exposing them to the risks of air bags, and the 
vehicles will have warning labels concerning the risks of air bags. 
This helps minimize any safety disbenefits of the vehicle not meeting 
requirements for advanced air bags.
---------------------------------------------------------------------------

    \7\ Lower Anchors and Tethers for Children (LATCH) Restraint 
System.
---------------------------------------------------------------------------

    We also note again that the coupe version of the Karma will be 
equipped with eight functional air bags (front, side, knee and curtain 
air bags). The convertible version will be equipped with six functional 
air bags (front, side and knee air bags). Both versions will include 
seat belts with pretensioners and load limiters.
    Given the relatively small number of vehicles that will be produced 
during the one-year exemption and the above discussion, we believe that 
the requested exemption would have a negligible effect on motor vehicle 
safety.
    We note that, as explained below, prospective purchasers will be 
notified that the vehicle is exempted from the specified advanced air 
bag requirements of Standard No. 208. Under Sec.  555.9(b), a 
manufacturer of an exempted passenger car must affix securely to the 
windshield or side window of each exempted vehicle a label containing a 
statement that the vehicle conforms to all applicable FMVSSs in effect 
on the date of manufacture ``except for Standard Nos. [listing the 
standards by number and title for which an exemption has been granted] 
exempted pursuant to NHTSA Exemption No. ----------.'' This label 
notifies prospective purchasers about the exemption and its subject. 
Under Sec.  555.9(c), this information must also be included on the 
vehicle's certification label.
    The text of Sec.  555.9 does not expressly indicate how the 
required statement on the two labels should read in situations where an 
exemption covers part but not all of a FMVSS. In this case, we believe 
that a statement that the vehicle has been exempted from Standard No. 
208 generally, without an indication that the exemption is limited to 
the specified advanced air bag provisions, could be misleading. A 
consumer might incorrectly believe that the vehicle has been exempted 
from all of Standard No. 208's requirements. Moreover, we believe that 
the addition of a reference to such provisions by number without an 
indication of its subject matter would be of little use to consumers, 
since they would not know the subject of those specific provisions. For 
these reasons, we believe the two labels should read in relevant part, 
``except for S14 (apart from S14.5.1(b)), S15, S17, S19, S21, S23, and 
S25 (Advanced Air Bag Requirements) of Standard No. 208, Occupant Crash 
Protection, exempted pursuant to * * *.'' We note that the phrase 
``Advanced Air Bag Requirements'' is an abbreviated form of the title 
of S14 of Standard No. 208. We believe it is reasonable to interpret 
Sec.  555.9 as requiring this language.

e. Decision

    In consideration of the foregoing, we conclude that compliance with 
the advanced air bag requirements of FMVSS No. 208, Occupant Crash 
Protection, would cause substantial economic hardship to a manufacturer 
that has tried in good faith to comply with the standard. We further 
conclude that granting of an exemption would be in the public interest 
and consistent with the objectives of traffic safety.
    In accordance with 49 U.S.C. 30113(b)(3)(B)(i), Fisker is granted 
NHTSA Temporary Exemption No. EX 10-01, from S14 (apart from 
S14.5.1(b)), S15, S17, S19, S21, S23, and S25 of FMVSS No. 208. In 
addition to certifying compliance with the belted 50th percentile adult 
male dummy barrier impact requirements in S14.5.1(b), Fisker must 
certify to the unbelted 50th percentile adult male dummy barrier impact 
test requirement that applied prior to September 1, 2006 (S5.1.2(a)). 
For purposes of this exemption, the unbelted sled test in S13 is an 
acceptable option for that requirement.
    The exemption is for the Karma and shall remain in effect for one 
year as indicated in the DATES section of this document.

    (49 U.S.C. 30113; delegations of authority at 49 CFR 1.50. and 
501.8)

    Issued on: September 15, 2010.
David L. Strickland,
Administrator.
[FR Doc. 2010-23472 Filed 9-20-10; 8:45 am]
BILLING CODE 4910-59-P