Tesla Motors, Inc.; Receipt of Petition for Renewal of Temporary Exemption from the Advanced Air Bag Requirements of FMVSS No. 208, 33402-33406 [2011-14183]

Download as PDF sroberts on DSK5SPTVN1PROD with NOTICES 33402 Federal Register / Vol. 76, No. 110 / Wednesday, June 8, 2011 / Notices Program Management, Indiana Department of Transportation, 100 North Senate Avenue, N758, Indianapolis, IN 46204, Phone: (317) 232–0694. SUPPLEMENTARY INFORMATION: The FHWA, in cooperation with the Illinois Department of Transportation (IDOT) and the Indiana Department of Transportation (INDOT), will prepare a Tier One Environmental Impact Statement (EIS) for the Illiana Corridor Project. The anticipated project termini are Interstate Highway 55 in Will County, Illinois and Interstate Highway 65 in Lake County, Indiana. The study area covers approximately 950 square miles in portions of Will and Kankakee counties in Illinois and Lake County in Indiana. The Tier One EIS will complete a broad analysis of transportation system alternative(s) in the study area and evaluate the environmental impacts at a planning level of detail using a Geographic Information System (GIS) supplemented as needed by field investigations. The primary environmental resources that may be affected are: agricultural, residential, commercial, and industrial properties; streams and floodplains; wetlands; and open space. Alternatives assessed will seek to avoid and minimize impacts to these resources, as well as cultural resources and protected lands. In accordance with FHWA, IDOT, and INDOT policies, the project is being developed using Context Sensitive Solutions as the basis for an extensive stakeholder outreach program. A range of Alternatives will be developed and evaluated, including but not limited to: Taking no action, transportation system management strategies, existing or new transit improvements, existing roadway improvements, and new roadways on new location. As part of the EIS process, a scoping meeting for obtaining input from Resource Agencies in both Illinois and Indiana on the level of detail and methodologies to be used in the EIS, as well as the development of a bi-state agency coordination process, will be held on June 28, 2011 at the U.S. Environmental Protection Agency, 77 West Jackson Boulevard, Chicago, Illinois. A Stakeholder Involvement Plan (SIP), which will meet the SAFETEA– LU Coordination Plan requirements, will be developed to ensure that a full range of issues related to this proposed project are identified and addressed. The SIP provides meaningful opportunities for all stakeholders to VerDate Mar<15>2010 21:51 Jun 07, 2011 Jkt 223001 participate in defining transportation issues and solutions for the study area. Comments or questions concerning this proposed action and the Tier One EIS are invited from all interested parties and should be directed to the FHWA at the address provided above. A public hearing will be held after the Tier One Draft EIS is published and made available for public and agency review. Public notice will be given of the time and place of public meetings and hearings. The Tier One EIS will conclude with a Record of Decision selecting a preferred corridor that can encompass one or more transportation alternatives. Following the Tier One EIS, projects with independent utility may be advanced to Tier Two NEPA documents that will focus on detailed environmental analyses. (Catalog of Federal Domestic Assistance Program Number 20.205, Highway Research, Planning and Construction. The regulations implementing Executive Order 12372 regarding intergovernmental consultation on Federal programs and activities apply to this program). Issued on: May 26, 2011. Norman R. Stoner, Division Administrator, Federal Highway Administration, Springfield, Illinois. [FR Doc. 2011–14205 Filed 6–7–11; 8:45 am] BILLING CODE 4910–22–P DEPARTMENT OF TRANSPORTATION National Highway Traffic Safety Administration [Docket No. NHTSA–2011–0070] Tesla Motors, Inc.; Receipt of Petition for Renewal of Temporary Exemption from the Advanced Air Bag Requirements of FMVSS No. 208 National Highway Traffic Safety Administration (NHTSA), Department of Transportation (DOT). ACTION: Notice of receipt of a petition for renewal of a temporary exemption from certain provisions of Federal Motor Vehicle Safety Standard (FMVSS) No. 208, Occupant Crash Protection. AGENCY: In accordance with the procedures in 49 CFR Part 555, Tesla Motors, Inc., has petitioned the agency for renewal of a temporary exemption from certain advanced air bag requirements of FMVSS No. 208. The basis for the application is that the petitioner avers that compliance would cause it substantial economic hardship and that it has tried in good faith to SUMMARY: PO 00000 Frm 00212 Fmt 4703 Sfmt 4703 comply with the standard.1 This notice of receipt of an application for renewal of temporary exemptions is published in accordance with statutory and administrative provisions. NHTSA has made no judgment on the merits of the application. DATES: You should submit your comments not later than July 8, 2011. FOR FURTHER INFORMATION CONTACT: David Jasinski, Office of the Chief Counsel, NCC–112, National Highway Traffic Safety Administration, 1200 New Jersey Avenue, SE., West Building 4th Floor, Room W41–213, Washington, DC 20590. Telephone: (202) 366–2992; Fax: (202) 366–3820. ADDRESSES: We invite you to submit comments on the application described above. You may submit comments identified by docket number at the heading of this notice by any of the following methods: • Web Site: https:// www.regulations.gov. Follow the instructions for submitting comments on the electronic docket site by clicking on ‘‘Help and Information’’ or ‘‘Help/ Info.’’ • Fax: 1–202–493–2251. • Mail: U.S. Department of Transportation, Docket Operations, M– 30, Room W12–140, 1200 New Jersey Avenue, SE., Washington, DC 20590. • Hand Delivery: 1200 New Jersey Avenue, SE., West Building Ground Floor, Room W12–140, Washington, DC, between 9 am and 5 pm, Monday through Friday, except Federal Holidays. • Federal eRulemaking Portal: Go to https://www.regulations.gov. Follow the online instructions for submitting comments. Instructions: All submissions must include the agency name and docket number. Note that all comments received will be posted without change to https://www.regulations.gov, including any personal information provided. Please see the Privacy Act discussion below. We will consider all comments received before the close of business on the comment closing date indicated above. To the extent possible, we will also consider comments filed after the closing date. Docket: For access to the docket to read background documents or comments received, go to https:// www.regulations.gov at any time or to 1200 New Jersey Avenue, SE., West Building Ground Floor, Room W12–140, Washington, DC 20590, between 9 am and 5 pm, Monday through Friday, 1 To view the applications, go to https:// www.regulations.gov and enter the docket number set forth in the heading of this document. E:\FR\FM\08JNN1.SGM 08JNN1 Federal Register / Vol. 76, No. 110 / Wednesday, June 8, 2011 / Notices except Federal Holidays. Telephone: (202) 366–9826. Privacy Act: Anyone is able to search the electronic form of all comments received into any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union, etc.). You may review DOT’s complete Privacy Act Statement in the Federal Register published on April 11, 2000 (Volume 65, Number 70; Pages 19477–78) or you may visit https://www.dot.gov/ privacy.html. Confidential Business Information: If you wish to submit any information under a claim of confidentiality, you should submit three copies of your complete submission, including the information you claim to be confidential business information, to the Chief Counsel, NHTSA, at the address given under FOR FURTHER INFORMATION CONTACT. In addition, you should submit two copies, from which you have deleted the claimed confidential business information, to Docket Management at the address given above. When you send a comment containing information claimed to be confidential business information, you should include a cover letter setting forth the information specified in our confidential business information regulation (49 CFR part 512). SUPPLEMENTARY INFORMATION: sroberts on DSK5SPTVN1PROD with NOTICES 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.’’ 2 The upgrade was designed to meet the twin goals of improving protection for occupants of all sizes, belted and unbelted, in moderate-tohigh-speed crashes, and of minimizing the risks posed by air bags to infants, children, and other occupants, especially in low-speed crashes. The issuance of the advanced air bag requirements was 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 encourage the placement of children in rear seats. The new requirements were phasedin, beginning with the 2004 model year. Small volume manufacturers were not subject to the advanced air bag requirements until the end of the phasein period, i.e., September 1, 2006. 2 See 65 FR 30680 (May 12, 2000). VerDate Mar<15>2010 21:51 Jun 07, 2011 Jkt 223001 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, each of which has petitioned on the basis that compliance would cause it substantial economic hardship and that it has tried in good faith to comply with the standard. In recognition of the more limited resources and capabilities of small motor vehicle manufacturers, authority to grant exemptions based on substantial economic hardship and good faith efforts was added to the Vehicle Safety Act in 1972 to enable the agency to give those manufacturers additional time to comply with the Federal safety standards. NHTSA has granted a number of these petitions, usually in situations in which the manufacturer is supplying standard air bags in lieu of advanced air bags.3 In addressing these petitions, NHTSA has recognized that small manufacturers may face particular difficulties in acquiring or developing advanced air bag systems. Notwithstanding those previous grants of exemption, NHTSA is considering two key issues— (1) whether it is in the public interest to continue to grant such petitions, particularly in the same manner as in the past, given the number of years these requirements have now been in effect and the benefits of advanced air bags, and (2) to the extent such petitions are granted, what plans and countermeasures to protect child and infant occupants, short of compliance with the advanced air bags, should be expected. While the exemption authority was created to address the problems of small manufacturers and the agency wishes to be appropriately attentive to those problems, it was not anticipated by the agency that use of this authority would result in small manufacturers being given much more than relatively short term exemptions from recently implemented safety standards, especially those addressing particularly significant safety problems. Given the passage of time since the advanced air bag requirements were established and implemented, and in light of the benefits of advanced air bags, NHTSA is considering whether it is in the public interest to continue to grant exemptions from these requirements, particularly under the 3 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). PO 00000 Frm 00213 Fmt 4703 Sfmt 4703 33403 same terms as in the past. The costs of compliance with the advanced air bag requirements of FMVSS No. 208 are costs that all entrants to the U.S. automobile marketplace should expect to bear. Furthermore, NHTSA understands that, in contrast to the initial years after the advanced air bag requirements went into effect, low volume manufacturers now have access to advanced air bag technology. Accordingly, NHTSA tentatively concludes that the expense of advanced air bag technology is not now sufficient, in and of itself, to justify the grant of a petition for a hardship exemption from the advanced air bag requirements. NHTSA further notes that the granting of exemptions from motor vehicle safety standards is subject to the agency’s finding that the petitioning manufacturer has ‘‘tried to comply with the standard in good faith.’’ 4 In response to prior petitions, NHTSA has granted temporary exemptions from the advanced air bag requirements as a means of affording eligible manufacturers an additional transition period to comply with the exempted standard. In deciding whether to grant an exemption based on substantial economic hardship and good faith efforts, NHTSA considers the steps that the manufacturer has already taken to achieve compliance, as well as the future steps the manufacturer plans to take during the exemption period and the estimated date by which full compliance will be achieved.5 NHTSA invites comment on whether and in what circumstances (e.g., nature of vehicles, number of vehicles, level of efforts to comply with the requirements, timing as to number of years since the requirements were implemented, etc.) it should continue to grant petitions for first time exemptions from the advanced air bag requirements of FMVSS No. 208 and petitions for renewed exemptions from those requirements. We note that any policy statements we may make in this area would not have the effect of precluding manufacturers from submitting subsequent petitions for exemption. However, we believe it could be helpful for manufacturers to know our general views in advance of submitting a petition. We also request comment on the issue of, to the extent any future hardship exemptions from the advanced air bag requirements are granted, what plans and countermeasures to protect child and infant occupants, short of compliance with the advanced air bag requirements, should be expected. In 4 49 5 49 E:\FR\FM\08JNN1.SGM U.S.C. 30113(b)(3)(B)(i) CFR 555.6(a)(2) 08JNN1 33404 Federal Register / Vol. 76, No. 110 / Wednesday, June 8, 2011 / Notices sroberts on DSK5SPTVN1PROD with NOTICES this regard, we note the agency is authorized to condition the granting of exemptions on such terms as the Secretary considers appropriate.6 In responding to some recent petitions for exemption from the advanced air bag requirements of FMVSS No. 208, NHTSA has considered the fact that the petitioner planned to install some countermeasures for the protection of child passengers.7 NHTSA also invites comment on the likelihood that a child or infant will be a passenger in any vehicles that would be produced and sold in the U.S. under the requested exemption. II. Statutory Authority for Temporary Exemptions The National Traffic and Motor Vehicle Safety Act (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 implementing this section to NHTSA. The Act authorizes the Secretary to grant a temporary exemption to a manufacturer of not more than 10,000 motor vehicles annually, on such terms as he deems appropriate, if he finds that the exemption would be consistent with the public interest and the Safety Act and if he also finds that ‘‘compliance with the standard would cause substantial economic hardship to a manufacturer that has tried to comply with the standard in good faith.’’ The Act also authorizes the Secretary to grant a temporary exemption from a standard, for not more than 2,500 motor vehicles per year, to a manufacturer of any size, on such terms as he deems appropriate, if he finds that the exemption would be consistent with the public interest and the Safety Act and if he also finds either that ■ The exemption would make easier the development or field evaluation of a new motor vehicle safety feature providing a safety level at least equal to the safety level of the standard; ■ The exemption would make the development or field evaluation of a low-emission motor vehicle easier and would not unreasonably lower the safety level of that vehicle; or ■ Compliance with the standard would prevent the manufacturer from selling a motor vehicle with an overall 6 49 U.S.C. 30113(b). e.g., grant of petition of Think Technology AS, 74 FR 40634–01 (Aug. 12, 2009); grant of petition of Ferrari S.p.A., 74 FR 36303–02 (July 22, 2009). 7 See, VerDate Mar<15>2010 21:51 Jun 07, 2011 Jkt 223001 safety level at least equal to the overall safety level of nonexempt vehicles. NHTSA established Part 555, Temporary Exemption from Motor Vehicle Safety and Bumper Standards, to implement the statutory provisions concerning temporary exemptions. Under Part 555, 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. While 49 U.S.C. 30113(b) states that exemptions from a Safety Act standard are to be granted on a ‘‘temporary basis,’’ 8 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 status to an 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 ongoing 8 49 PO 00000 U.S.C. 30113(b)(1). Frm 00214 Fmt 4703 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. Finally, we note that under 49 CFR 555.8(e), ‘‘If an application for renewal of temporary exemption that meets the requirements of § 555.5 has been filed not later than 60 days before the termination date of an exemption, the exemption does not terminate until the Administrator grants or denies the application for renewal.’’ This petition for renewal has been submitted by the deadline stated in 49 CFR 555.8(e). III. Overview of Petition In accordance with 49 U.S.C. 30113 and the procedures in 49 CFR Part 555, Tesla Motors, Inc., (Tesla) has submitted a petition asking the agency for renewal of its temporary exemption from certain advanced air bag requirements of FMVSS No. 208. The basis for the application is that compliance would cause the petitioner substantial economic hardship and that the petitioner has tried in good faith to comply with the standard. Tesla has requested a renewal of its exemption for a period of two years from January 29, 2011 to January 28, 2013. Tesla is petitioning for renewal of its exemption from certain requirements of FMVSS No. 208, Occupant Crash Protection. Specifically, the petition requests an exemption from the advanced air bag requirements (S14), with the exception of the belted, rigid barrier provisions of S14.5.1(a); the rigid barrier test requirement using the 5th percentile adult female test dummy (belted and unbelted, S15); the offset deformable barrier test requirement using the 5th percentile adult female test dummy (S17); and the requirements to provide protection for infants and children (S19, S21, and S23). Tesla has requested a two-year extension of its exemption, from January 28, 2011 to January 28, 2013, for the Roadster model. In a Federal Register document dated January 28, 2008, Tesla was granted a temporary exemption from the advanced air bag requirements of FMVSS No. 208 listed above for the Roadster.9 The exemption was granted for the period from the date of publication until January 28, 2011. The basis for the grant was that compliance with the advanced air bag requirements of FMVSS No. 208 would cause substantial economic hardship to a manufacturer that has tried in good faith to comply with the standard and that 9 73 Sfmt 4703 E:\FR\FM\08JNN1.SGM FR 4944 (Docket No. NHTSA–2008–0013). 08JNN1 sroberts on DSK5SPTVN1PROD with NOTICES Federal Register / Vol. 76, No. 110 / Wednesday, June 8, 2011 / Notices such exemption was in the public interest and consistent with the objectives of traffic safety. In a November 24, 2010 petition, Tesla sought renewal of its exemption. The basis for Tesla’s application is substantial economic hardship to a manufacturer that has tried in good faith to comply with the standard. Tesla is a Delaware corporation headquartered in California with sales offices throughout the United States and overseas. Tesla currently manufactures and sells only one vehicle, the Roadster. Tesla has sold or leased 287 Roadsters in the 12 months prior to filing its petition for extension. Tesla states that it continues to be eligible for a financial hardship exemption, and that it has suffered substantial losses and will continue to do so while selling the Roadster. Tesla began production of the allelectric Roadster in 2008. The Roadster has a single-speed electrically actuated automatic transmission and three phase, four pole AC induction motor. The Roadster has a combined range of 245 miles on a single charge. Under an agreement with Group Lotus plc (Lotus), Tesla purchases the Roadster ‘‘glider,’’ which uses the chassis and several other systems of the Lotus Elise. The gliders are manufactured under Tesla’s supervision and direction at a Lotus factory in the United Kingdom and then shipped to Menlo Park, California, where installation of the power train and other final steps are taken prior to sale of the vehicle in the United States. Tesla asserts that Lotus will cease manufacturing Roadster gliders in December 2011, and Tesla plans to finish production in early 2012 and offer remaining Roadsters for sale during 2012. According to Tesla, the Roadster was conceived as a limited proof-of-concept for later generations of Tesla vehicles. Tesla intends to introduce its next electric vehicle, a four-door fully electric sedan known as the Model S. Tesla states that the Model S would meet or exceed all FMVSSs in effect by the time the vehicle is released for production in 2012. Tesla contends that it is eligible for an economic hardship exemption. Tesla has produced fewer than 10,000 vehicles since the company’s founding in 2003. Worldwide production of the Roadster for calendar year 2010 will be approximately 600 to 700 vehicles. Tesla also states that it will not produce more than 10,000 vehicles (combined Roadster and Model S production) per year during the requested exemption period. In the January 2008 notice granting Tesla’s original exemption, the agency VerDate Mar<15>2010 21:51 Jun 07, 2011 Jkt 223001 determined that Lotus, as well as Tesla, was considered a manufacturer of the Roadster. The basis for this determination was information in the prior petition that Lotus would be assembling the Roadster. Nevertheless, the agency determined that Tesla was eligible for an economic hardship petition because the combined production of Lotus and Tesla was fewer than 10,000 vehicles. In its petition for extension, Tesla contends that the relationship between Lotus and Tesla does not involve ownership, sponsorship, or any type of control of one entity over the other. Tesla also reiterates that, even if the production of Lotus and Tesla vehicles are combined, the total production is far below the threshold 10,000 vehicle per year limit for hardship exemptions. Tesla cites five reasons why the failure to obtain the requested extension of its exemption would cause substantial economic hardship. First, Tesla has incurred cumulative net losses of $360 million since inception through September 30, 2010, and a net loss of $100 million for the first nine months of 2010. Tesla also expects cumulative losses to almost double before launch of the Model S. Second, Tesla contends that the loss of the ability to sell the Roadster in the United States would cause Tesla to incur severe financial harm, which would substantially increase the likelihood of breaching financial covenants in its loan documents with the U.S. Department of Energy, potentially depriving Tesla of a source of capital. Third, Tesla has committed certain remaining costs for the Roadster that cannot be cancelled, such as a fixed supply contract with Lotus and other suppliers until the end of 2011. Fourth, Tesla contends that ending U.S. sales of the Roadster would require Tesla to refund $2.4 million in deposits on Roadster reservations, exacerbating its financial hardship. Fifth, because the Roadster is the only Tesla model available in the United States, Tesla states that cancellation of the program would result in a significant loss of market share. Tesla also contends that Lotus, and by extension Tesla, has exerted good faith efforts to achieve compliance with the advanced air bag requirements. Tesla notes that the Roadster shares a number of common components and systems with the Lotus Elise, including the passive safety systems. Tesla believes that, for the reasons outlined in Lotus’s petition for an extension of its FMVSS No. 208 exemption for the Elise, Lotus has exerted good faith efforts to comply with the advanced air bag PO 00000 Frm 00215 Fmt 4703 Sfmt 4703 33405 requirements.10 Furthermore, Tesla states that it is in no better position than Lotus to develop an advanced air bag system for the Elise-based Roadster. Like the Lotus Elise, the Tesla Roadster is coming to the end of its model life. Given the limited number of Roadsters planned for production, Tesla believes that developing an advanced air bag system for the Roadster at this time is economically impracticable. Tesla also contends that it has been using the three years of its current exemption to develop the Model S, which will include advanced air bags. Tesla also contends that the requested extension of its exemption is in the public interest for five reasons. First, Tesla states that granting the petition would encourage development and sale of highway-capable electric vehicles by Tesla and other manufacturers. Second, Tesla contends that the public interest considerations supporting other similar extension petitions previously granted by NHTSA exist for Tesla as well. Third, Tesla states that the Roadster has a high degree of safety because of its design. Even without advanced air bags, Tesla believes that the requested exemption would have a negligible impact on vehicle safety because of the limited number of vehicles that would be sold in the United States under the extension. Fourth, Tesla contends that the Roadster does not pose an unreasonable risk to safety of infants or children because young children are unlikely to be passengers in the Roadster and neither Tesla nor Lotus has received any complaints, reports, or information of air-bag-related injuries. Fifth, Tesla contends that granting its petition will have a positive impact on U.S. employment in the automotive industry, and that denying its petition would not only directly impact the jobs of current Tesla employees supporting the Roadster, but also potentially compromise the company’s ability to move forward with the Model S. IV. Completeness and Comment Period Upon receiving a petition, NHTSA conducts an initial review of the petition with respect to whether the petition is complete and whether the petitioner appears to be eligible to apply for the requested petition. The agency has tentatively concluded that the petition from Tesla is complete and that Tesla is eligible for an extension of its 10 Tesla has included, as an attachment to its petition, a copy of Lotus’s petition for an extension of its temporary exemption from certain provisions of FMVSS No. 208. That petition is being considered separately. A separate notice of receipt published in today’s Federal Register addresses Lotus’s petition. E:\FR\FM\08JNN1.SGM 08JNN1 33406 Federal Register / Vol. 76, No. 110 / Wednesday, June 8, 2011 / Notices temporary exemption. The agency has not made any judgment on the merits of the application, and is placing a nonconfidential copy of the petition in the docket. We are providing a 30-day comment period. After considering public comments and other available information, we will publish a notice of final action on the application in the Federal Register. Issued on: June 1, 2011. Christopher J. Bonanti Associate Administrator for Rulemaking. [FR Doc. 2011–14183 Filed 6–7–11; 8:45 am] BILLING CODE 4910–59–P DEPARTMENT OF TRANSPORTATION National Highway Traffic Safety Administration [Docket No. NHTSA–2011–0069] Lotus Cars Ltd. Receipt of Petition for Renewal of Temporary Exemption From the Advanced Air Bag Requirements of FMVSS No. 208 National Highway Traffic Safety Administration (NHTSA), Department of Transportation (DOT). ACTION: Notice of receipt of a petition for renewal of a temporary exemption from certain provisions of Federal Motor Vehicle Safety Standard (FMVSS) No. 208, Occupant Crash Protection. AGENCY: In accordance with the procedures in 49 CFR Part 555, Lotus Cars Ltd. has petitioned the agency for renewal of a temporary exemption from certain advanced air bag requirements of FMVSS No. 208. The basis for the application is that the petitioner avers that compliance would cause it substantial economic hardship and that it has tried in good faith to comply with the standard.1 This notice of receipt of an application for renewal of temporary exemptions is published in accordance with statutory and administrative provisions. NHTSA has made no judgment on the merits of the application. DATES: You should submit your comments not later than July 8, 2011. FOR FURTHER INFORMATION CONTACT: David Jasinski, Office of the Chief Counsel, NCC–112, National Highway Traffic Safety Administration, 1200 New Jersey Avenue, SE., West Building 4th Floor, Room W41–213, Washington, DC 20590. Telephone: (202) 366–2992; Fax: (202) 366–3820. sroberts on DSK5SPTVN1PROD with NOTICES SUMMARY: 1 To view the applications, go to https:// www.regulations.gov and enter the docket number set forth in the heading of this document. VerDate Mar<15>2010 21:51 Jun 07, 2011 Jkt 223001 We invite you to submit comments on the application described above. You may submit comments identified by docket number at the heading of this notice by any of the following methods: • Web Site: https:// www.regulations.gov. Follow the instructions for submitting comments on the electronic docket site by clicking on ‘‘Help and Information’’ or ‘‘Help/ Info.’’ • Fax: 1–202–493–2251. • Mail: U.S. Department of Transportation, Docket Operations, M– 30, Room W12–140, 1200 New Jersey Avenue, SE., Washington, DC 20590. • Hand Delivery: 1200 New Jersey Avenue, SE., West Building Ground Floor, Room W12–140, Washington, DC, between 9 am and 5 pm, Monday through Friday, except Federal Holidays. • Federal eRulemaking Portal: Go to https://www.regulations.gov. Follow the online instructions for submitting comments. Instructions: All submissions must include the agency name and docket number. Note that all comments received will be posted without change to https://www.regulations.gov, including any personal information provided. Please see the Privacy Act discussion below. We will consider all comments received before the close of business on the comment closing date indicated above. To the extent possible, we will also consider comments filed after the closing date. Docket: For access to the docket to read background documents or comments received, go to https:// www.regulations.gov at any time or to 1200 New Jersey Avenue, SE., West Building Ground Floor, Room W12–140, Washington, DC 20590, between 9 am and 5 pm, Monday through Friday, except Federal Holidays. Telephone: (202) 366–9826. Privacy Act: Anyone is able to search the electronic form of all comments received into any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union, etc.). You may review DOT’s complete Privacy Act Statement in the Federal Register published on April 11, 2000 (Volume 65, Number 70; Pages 19477–78) or you may visit https://www.dot.gov/ privacy.html. Confidential Business Information: If you wish to submit any information under a claim of confidentiality, you should submit three copies of your complete submission, including the information you claim to be confidential ADDRESSES: PO 00000 Frm 00216 Fmt 4703 Sfmt 4703 business information, to the Chief Counsel, NHTSA, at the address given under FOR FURTHER INFORMATION CONTACT. In addition, you should submit two copies, from which you have deleted the claimed confidential business information, to Docket Management at the address given above. When you send a comment containing information claimed to be confidential business information, you should include a cover letter setting forth the information specified in our confidential business information regulation (49 CFR Part 512). 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.’’ 2 The upgrade was designed to meet the twin goals of improving protection for occupants of all sizes, belted and unbelted, in moderate-tohigh-speed crashes, and of minimizing the risks posed by air bags to infants, children, and other occupants, especially in low-speed crashes. The issuance of the advanced air bag requirements was 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 encourage the placement of children in rear seats. The new requirements were phasedin, beginning with the 2004 model year. Small volume manufacturers were not subject to the advanced air bag requirements until the end of the phasein period, i.e., 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, each of which has petitioned on the basis that compliance would cause it substantial economic hardship and that it has tried in good faith to comply with the standard. In recognition of the more limited resources and capabilities of small motor vehicle manufacturers, authority to grant exemptions based on substantial economic hardship and good faith efforts was added to the Vehicle Safety Act in 1972 to enable the agency to give those manufacturers additional time to comply with the Federal safety standards. NHTSA has granted a number of these petitions, usually in situations in which 2 See E:\FR\FM\08JNN1.SGM 65 FR 30680 (May 12, 2000). 08JNN1

Agencies

[Federal Register Volume 76, Number 110 (Wednesday, June 8, 2011)]
[Notices]
[Pages 33402-33406]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-14183]


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DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

[Docket No. NHTSA-2011-0070]


Tesla Motors, Inc.; Receipt of Petition for Renewal of Temporary 
Exemption from the Advanced Air Bag Requirements of FMVSS No. 208

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

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

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SUMMARY: In accordance with the procedures in 49 CFR Part 555, Tesla 
Motors, Inc., has petitioned the agency for renewal of a temporary 
exemption from certain advanced air bag requirements of FMVSS No. 208. 
The basis for the application is that the petitioner avers that 
compliance would cause it substantial economic hardship and that it has 
tried in good faith to comply with the standard.\1\ This notice of 
receipt of an application for renewal of temporary exemptions is 
published in accordance with statutory and administrative provisions. 
NHTSA has made no judgment on the merits of the application.
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    \1\ To view the applications, go to https://www.regulations.gov 
and enter the docket number set forth in the heading of this 
document.

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DATES: You should submit your comments not later than July 8, 2011.

FOR FURTHER INFORMATION CONTACT: David Jasinski, Office of the Chief 
Counsel, NCC-112, National Highway Traffic Safety Administration, 1200 
New Jersey Avenue, SE., West Building 4th Floor, Room W41-213, 
Washington, DC 20590. Telephone: (202) 366-2992; Fax: (202) 366-3820.

ADDRESSES: We invite you to submit comments on the application 
described above. You may submit comments identified by docket number at 
the heading of this notice by any of the following methods:
     Web Site: https://www.regulations.gov. Follow the 
instructions for submitting comments on the electronic docket site by 
clicking on ``Help and Information'' or ``Help/Info.''
     Fax: 1-202-493-2251.
     Mail: U.S. Department of Transportation, Docket 
Operations, M-30, Room W12-140, 1200 New Jersey Avenue, SE., 
Washington, DC 20590.
     Hand Delivery: 1200 New Jersey Avenue, SE., West Building 
Ground Floor, Room W12-140, Washington, DC, between 9 am and 5 pm, 
Monday through Friday, except Federal Holidays.
     Federal eRulemaking Portal: Go to https://www.regulations.gov. Follow the online instructions for submitting 
comments.
    Instructions: All submissions must include the agency name and 
docket number. Note that all comments received will be posted without 
change to https://www.regulations.gov, including any personal 
information provided. Please see the Privacy Act discussion below. We 
will consider all comments received before the close of business on the 
comment closing date indicated above. To the extent possible, we will 
also consider comments filed after the closing date.
    Docket: For access to the docket to read background documents or 
comments received, go to https://www.regulations.gov at any time or to 
1200 New Jersey Avenue, SE., West Building Ground Floor, Room W12-140, 
Washington, DC 20590, between 9 am and 5 pm, Monday through Friday,

[[Page 33403]]

except Federal Holidays. Telephone: (202) 366-9826.
    Privacy Act: Anyone is able to search the electronic form of all 
comments received into any of our dockets by the name of the individual 
submitting the comment (or signing the comment, if submitted on behalf 
of an association, business, labor union, etc.). You may review DOT's 
complete Privacy Act Statement in the Federal Register published on 
April 11, 2000 (Volume 65, Number 70; Pages 19477-78) or you may visit 
https://www.dot.gov/privacy.html.
    Confidential Business Information: If you wish to submit any 
information under a claim of confidentiality, you should submit three 
copies of your complete submission, including the information you claim 
to be confidential business information, to the Chief Counsel, NHTSA, 
at the address given under FOR FURTHER INFORMATION CONTACT. In 
addition, you should submit two copies, from which you have deleted the 
claimed confidential business information, to Docket Management at the 
address given above. When you send a comment containing information 
claimed to be confidential business information, you should include a 
cover letter setting forth the information specified in our 
confidential business information regulation (49 CFR part 512).

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.'' \2\ The upgrade was designed to meet the twin 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.
---------------------------------------------------------------------------

    \2\ See 65 FR 30680 (May 12, 2000).
---------------------------------------------------------------------------

    The issuance of the advanced air bag requirements was 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 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 the end of the phase-in period, i.e., 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, each of 
which has petitioned on the basis that compliance would cause it 
substantial economic hardship and that it has tried in good faith to 
comply with the standard. In recognition of the more limited resources 
and capabilities of small motor vehicle manufacturers, authority to 
grant exemptions based on substantial economic hardship and good faith 
efforts was added to the Vehicle Safety Act in 1972 to enable the 
agency to give those manufacturers additional time to comply with the 
Federal safety standards.
    NHTSA has granted a number of these petitions, usually in 
situations in which the manufacturer is supplying standard air bags in 
lieu of advanced air bags.\3\ In addressing these petitions, NHTSA has 
recognized that small manufacturers may face particular difficulties in 
acquiring or developing advanced air bag systems.
---------------------------------------------------------------------------

    \3\ 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).
---------------------------------------------------------------------------

    Notwithstanding those previous grants of exemption, NHTSA is 
considering two key issues--
    (1) whether it is in the public interest to continue to grant such 
petitions, particularly in the same manner as in the past, given the 
number of years these requirements have now been in effect and the 
benefits of advanced air bags, and
    (2) to the extent such petitions are granted, what plans and 
countermeasures to protect child and infant occupants, short of 
compliance with the advanced air bags, should be expected.

While the exemption authority was created to address the problems of 
small manufacturers and the agency wishes to be appropriately attentive 
to those problems, it was not anticipated by the agency that use of 
this authority would result in small manufacturers being given much 
more than relatively short term exemptions from recently implemented 
safety standards, especially those addressing particularly significant 
safety problems.
    Given the passage of time since the advanced air bag requirements 
were established and implemented, and in light of the benefits of 
advanced air bags, NHTSA is considering whether it is in the public 
interest to continue to grant exemptions from these requirements, 
particularly under the same terms as in the past. The costs of 
compliance with the advanced air bag requirements of FMVSS No. 208 are 
costs that all entrants to the U.S. automobile marketplace should 
expect to bear. Furthermore, NHTSA understands that, in contrast to the 
initial years after the advanced air bag requirements went into effect, 
low volume manufacturers now have access to advanced air bag 
technology. Accordingly, NHTSA tentatively concludes that the expense 
of advanced air bag technology is not now sufficient, in and of itself, 
to justify the grant of a petition for a hardship exemption from the 
advanced air bag requirements.
    NHTSA further notes that the granting of exemptions from motor 
vehicle safety standards is subject to the agency's finding that the 
petitioning manufacturer has ``tried to comply with the standard in 
good faith.'' \4\ In response to prior petitions, NHTSA has granted 
temporary exemptions from the advanced air bag requirements as a means 
of affording eligible manufacturers an additional transition period to 
comply with the exempted standard. In deciding whether to grant an 
exemption based on substantial economic hardship and good faith 
efforts, NHTSA considers the steps that the manufacturer has already 
taken to achieve compliance, as well as the future steps the 
manufacturer plans to take during the exemption period and the 
estimated date by which full compliance will be achieved.\5\
---------------------------------------------------------------------------

    \4\ 49 U.S.C. 30113(b)(3)(B)(i)
    \5\ 49 CFR 555.6(a)(2)
---------------------------------------------------------------------------

    NHTSA invites comment on whether and in what circumstances (e.g., 
nature of vehicles, number of vehicles, level of efforts to comply with 
the requirements, timing as to number of years since the requirements 
were implemented, etc.) it should continue to grant petitions for first 
time exemptions from the advanced air bag requirements of FMVSS No. 208 
and petitions for renewed exemptions from those requirements. We note 
that any policy statements we may make in this area would not have the 
effect of precluding manufacturers from submitting subsequent petitions 
for exemption. However, we believe it could be helpful for 
manufacturers to know our general views in advance of submitting a 
petition.
    We also request comment on the issue of, to the extent any future 
hardship exemptions from the advanced air bag requirements are granted, 
what plans and countermeasures to protect child and infant occupants, 
short of compliance with the advanced air bag requirements, should be 
expected. In

[[Page 33404]]

this regard, we note the agency is authorized to condition the granting 
of exemptions on such terms as the Secretary considers appropriate.\6\ 
In responding to some recent petitions for exemption from the advanced 
air bag requirements of FMVSS No. 208, NHTSA has considered the fact 
that the petitioner planned to install some countermeasures for the 
protection of child passengers.\7\
---------------------------------------------------------------------------

    \6\ 49 U.S.C. 30113(b).
    \7\ See, e.g., grant of petition of Think Technology AS, 74 FR 
40634-01 (Aug. 12, 2009); grant of petition of Ferrari S.p.A., 74 FR 
36303-02 (July 22, 2009).
---------------------------------------------------------------------------

    NHTSA also invites comment on the likelihood that a child or infant 
will be a passenger in any vehicles that would be produced and sold in 
the U.S. under the requested exemption.

II. Statutory Authority for Temporary Exemptions

    The National Traffic and Motor Vehicle Safety Act (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 implementing this 
section to NHTSA.
    The Act authorizes the Secretary to grant a temporary exemption to 
a manufacturer of not more than 10,000 motor vehicles annually, on such 
terms as he deems appropriate, if he finds that the exemption would be 
consistent with the public interest and the Safety Act and if he also 
finds that ``compliance with the standard would cause substantial 
economic hardship to a manufacturer that has tried to comply with the 
standard in good faith.''
    The Act also authorizes the Secretary to grant a temporary 
exemption from a standard, for not more than 2,500 motor vehicles per 
year, to a manufacturer of any size, on such terms as he deems 
appropriate, if he finds that the exemption would be consistent with 
the public interest and the Safety Act and if he also finds either that
    [squf] The exemption would make easier the development or field 
evaluation of a new motor vehicle safety feature providing a safety 
level at least equal to the safety level of the standard;
    [squf] The exemption would make the development or field evaluation 
of a low-emission motor vehicle easier and would not unreasonably lower 
the safety level of that vehicle; or
    [squf] Compliance with the standard would prevent the manufacturer 
from selling a motor vehicle with an overall safety level at least 
equal to the overall safety level of nonexempt vehicles.
    NHTSA established Part 555, Temporary Exemption from Motor Vehicle 
Safety and Bumper Standards, to implement the statutory provisions 
concerning temporary exemptions. Under Part 555, 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.
    While 49 U.S.C. 30113(b) states that exemptions from a Safety Act 
standard are to be granted on a ``temporary basis,'' \8\ 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 
status to an 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 ongoing 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.
---------------------------------------------------------------------------

    \8\ 49 U.S.C. 30113(b)(1).
---------------------------------------------------------------------------

    Finally, we note that under 49 CFR 555.8(e), ``If an application 
for renewal of temporary exemption that meets the requirements of Sec.  
555.5 has been filed not later than 60 days before the termination date 
of an exemption, the exemption does not terminate until the 
Administrator grants or denies the application for renewal.'' This 
petition for renewal has been submitted by the deadline stated in 49 
CFR 555.8(e).

III. Overview of Petition

    In accordance with 49 U.S.C. 30113 and the procedures in 49 CFR 
Part 555, Tesla Motors, Inc., (Tesla) has submitted a petition asking 
the agency for renewal of its temporary exemption from certain advanced 
air bag requirements of FMVSS No. 208. The basis for the application is 
that compliance would cause the petitioner substantial economic 
hardship and that the petitioner has tried in good faith to comply with 
the standard. Tesla has requested a renewal of its exemption for a 
period of two years from January 29, 2011 to January 28, 2013.
    Tesla is petitioning for renewal of its exemption from certain 
requirements of FMVSS No. 208, Occupant Crash Protection. Specifically, 
the petition requests an exemption from the advanced air bag 
requirements (S14), with the exception of the belted, rigid barrier 
provisions of S14.5.1(a); the rigid barrier test requirement using the 
5th percentile adult female test dummy (belted and unbelted, S15); the 
offset deformable barrier test requirement using the 5th percentile 
adult female test dummy (S17); and the requirements to provide 
protection for infants and children (S19, S21, and S23). Tesla has 
requested a two-year extension of its exemption, from January 28, 2011 
to January 28, 2013, for the Roadster model.
    In a Federal Register document dated January 28, 2008, Tesla was 
granted a temporary exemption from the advanced air bag requirements of 
FMVSS No. 208 listed above for the Roadster.\9\ The exemption was 
granted for the period from the date of publication until January 28, 
2011. The basis for the grant was that compliance with the advanced air 
bag requirements of FMVSS No. 208 would cause substantial economic 
hardship to a manufacturer that has tried in good faith to comply with 
the standard and that

[[Page 33405]]

such exemption was in the public interest and consistent with the 
objectives of traffic safety.
---------------------------------------------------------------------------

    \9\ 73 FR 4944 (Docket No. NHTSA-2008-0013).
---------------------------------------------------------------------------

    In a November 24, 2010 petition, Tesla sought renewal of its 
exemption. The basis for Tesla's application is substantial economic 
hardship to a manufacturer that has tried in good faith to comply with 
the standard. Tesla is a Delaware corporation headquartered in 
California with sales offices throughout the United States and 
overseas. Tesla currently manufactures and sells only one vehicle, the 
Roadster. Tesla has sold or leased 287 Roadsters in the 12 months prior 
to filing its petition for extension. Tesla states that it continues to 
be eligible for a financial hardship exemption, and that it has 
suffered substantial losses and will continue to do so while selling 
the Roadster.
    Tesla began production of the all-electric Roadster in 2008. The 
Roadster has a single-speed electrically actuated automatic 
transmission and three phase, four pole AC induction motor. The 
Roadster has a combined range of 245 miles on a single charge. Under an 
agreement with Group Lotus plc (Lotus), Tesla purchases the Roadster 
``glider,'' which uses the chassis and several other systems of the 
Lotus Elise. The gliders are manufactured under Tesla's supervision and 
direction at a Lotus factory in the United Kingdom and then shipped to 
Menlo Park, California, where installation of the power train and other 
final steps are taken prior to sale of the vehicle in the United 
States. Tesla asserts that Lotus will cease manufacturing Roadster 
gliders in December 2011, and Tesla plans to finish production in early 
2012 and offer remaining Roadsters for sale during 2012.
    According to Tesla, the Roadster was conceived as a limited proof-
of-concept for later generations of Tesla vehicles. Tesla intends to 
introduce its next electric vehicle, a four-door fully electric sedan 
known as the Model S. Tesla states that the Model S would meet or 
exceed all FMVSSs in effect by the time the vehicle is released for 
production in 2012.
    Tesla contends that it is eligible for an economic hardship 
exemption. Tesla has produced fewer than 10,000 vehicles since the 
company's founding in 2003. Worldwide production of the Roadster for 
calendar year 2010 will be approximately 600 to 700 vehicles. Tesla 
also states that it will not produce more than 10,000 vehicles 
(combined Roadster and Model S production) per year during the 
requested exemption period.
    In the January 2008 notice granting Tesla's original exemption, the 
agency determined that Lotus, as well as Tesla, was considered a 
manufacturer of the Roadster. The basis for this determination was 
information in the prior petition that Lotus would be assembling the 
Roadster. Nevertheless, the agency determined that Tesla was eligible 
for an economic hardship petition because the combined production of 
Lotus and Tesla was fewer than 10,000 vehicles.
    In its petition for extension, Tesla contends that the relationship 
between Lotus and Tesla does not involve ownership, sponsorship, or any 
type of control of one entity over the other. Tesla also reiterates 
that, even if the production of Lotus and Tesla vehicles are combined, 
the total production is far below the threshold 10,000 vehicle per year 
limit for hardship exemptions.
    Tesla cites five reasons why the failure to obtain the requested 
extension of its exemption would cause substantial economic hardship. 
First, Tesla has incurred cumulative net losses of $360 million since 
inception through September 30, 2010, and a net loss of $100 million 
for the first nine months of 2010. Tesla also expects cumulative losses 
to almost double before launch of the Model S. Second, Tesla contends 
that the loss of the ability to sell the Roadster in the United States 
would cause Tesla to incur severe financial harm, which would 
substantially increase the likelihood of breaching financial covenants 
in its loan documents with the U.S. Department of Energy, potentially 
depriving Tesla of a source of capital. Third, Tesla has committed 
certain remaining costs for the Roadster that cannot be cancelled, such 
as a fixed supply contract with Lotus and other suppliers until the end 
of 2011. Fourth, Tesla contends that ending U.S. sales of the Roadster 
would require Tesla to refund $2.4 million in deposits on Roadster 
reservations, exacerbating its financial hardship. Fifth, because the 
Roadster is the only Tesla model available in the United States, Tesla 
states that cancellation of the program would result in a significant 
loss of market share.
    Tesla also contends that Lotus, and by extension Tesla, has exerted 
good faith efforts to achieve compliance with the advanced air bag 
requirements. Tesla notes that the Roadster shares a number of common 
components and systems with the Lotus Elise, including the passive 
safety systems. Tesla believes that, for the reasons outlined in 
Lotus's petition for an extension of its FMVSS No. 208 exemption for 
the Elise, Lotus has exerted good faith efforts to comply with the 
advanced air bag requirements.\10\ Furthermore, Tesla states that it is 
in no better position than Lotus to develop an advanced air bag system 
for the Elise-based Roadster. Like the Lotus Elise, the Tesla Roadster 
is coming to the end of its model life. Given the limited number of 
Roadsters planned for production, Tesla believes that developing an 
advanced air bag system for the Roadster at this time is economically 
impracticable. Tesla also contends that it has been using the three 
years of its current exemption to develop the Model S, which will 
include advanced air bags.
---------------------------------------------------------------------------

    \10\ Tesla has included, as an attachment to its petition, a 
copy of Lotus's petition for an extension of its temporary exemption 
from certain provisions of FMVSS No. 208. That petition is being 
considered separately. A separate notice of receipt published in 
today's Federal Register addresses Lotus's petition.
---------------------------------------------------------------------------

    Tesla also contends that the requested extension of its exemption 
is in the public interest for five reasons. First, Tesla states that 
granting the petition would encourage development and sale of highway-
capable electric vehicles by Tesla and other manufacturers. Second, 
Tesla contends that the public interest considerations supporting other 
similar extension petitions previously granted by NHTSA exist for Tesla 
as well. Third, Tesla states that the Roadster has a high degree of 
safety because of its design. Even without advanced air bags, Tesla 
believes that the requested exemption would have a negligible impact on 
vehicle safety because of the limited number of vehicles that would be 
sold in the United States under the extension. Fourth, Tesla contends 
that the Roadster does not pose an unreasonable risk to safety of 
infants or children because young children are unlikely to be 
passengers in the Roadster and neither Tesla nor Lotus has received any 
complaints, reports, or information of air-bag-related injuries. Fifth, 
Tesla contends that granting its petition will have a positive impact 
on U.S. employment in the automotive industry, and that denying its 
petition would not only directly impact the jobs of current Tesla 
employees supporting the Roadster, but also potentially compromise the 
company's ability to move forward with the Model S.

IV. Completeness and Comment Period

    Upon receiving a petition, NHTSA conducts an initial review of the 
petition with respect to whether the petition is complete and whether 
the petitioner appears to be eligible to apply for the requested 
petition. The agency has tentatively concluded that the petition from 
Tesla is complete and that Tesla is eligible for an extension of its

[[Page 33406]]

temporary exemption. The agency has not made any judgment on the merits 
of the application, and is placing a non-confidential copy of the 
petition in the docket.
    We are providing a 30-day comment period. After considering public 
comments and other available information, we will publish a notice of 
final action on the application in the Federal Register.

    Issued on: June 1, 2011.
Christopher J. Bonanti
Associate Administrator for Rulemaking.
[FR Doc. 2011-14183 Filed 6-7-11; 8:45 am]
BILLING CODE 4910-59-P
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