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Home > Press > ZAP Awaits Court Decision on California Jurisdiction for Smart Car Lawsuit

Abstract:
A lawsuit filed by California electric car maker ZAP (OTCBB: ZAAP) against DaimlerChrysler, Smart GMBH and Smart Chairman Ulrich Walker is awaiting a decision before a Court of Appeal to proceed in California court.

ZAP Awaits Court Decision on California Jurisdiction for Smart Car Lawsuit

LOS ANGELES, CA | Posted on November 15th, 2007

Yesterday the Court of Appeal for the State of California heard oral arguments on ZAP's claims against DaimlerChrysler, Smart GMBH and Smart Chairman Ulrich Walker. Specifically, the Court will decide whether ZAP's claims against these parties may proceed in the California courts. The trial court found in June of 2006 that no jurisdiction existed to permit California court to hear ZAP's suit. ZAP is confident that this procedural error will be reversed. A decision is expected within 90 days.

In the preceding year and a half, the defendants have engaged in activity that inadvertently proves the truth of those initial allegations made against them by ZAP. ZAP's initial complaint alleged that the defendants engaged in unlawful actions in order to eliminate ZAP as a competitor in the California market. Since the trial court dismissal on jurisdictional grounds, defendants have proven their true intentions to bring the Smart ForTwo to California and to eliminate any competition standing in its way.

The lawsuit cites eight different counts, including intentional interference with prospective economic relations, negligent interference, trade libel, defamation, breach of contract to negotiate in good faith, breach of implied covenant of good faith and fair dealing, common law unfair competition, and statutory unfair competition. ZAP is seeking damages in excess of $500 million.

As the Smart Car prepares to launch in 2008, ZAP CEO Steve Schneider noted that DaimlerChrysler and the Smart division, at the expense of ZAP, have parlayed their struggling business unit into what they say could be its best-selling vehicle. Smart Car sought to introduce the car into the United States, but reversed the decision on the grounds that there was not enough demand. They subsequently made the decision to introduce an SUV called the ForFour, which was also reversed and the business unit for Smart in the USA was shut down in 2004.

When ZAP started selling its first units of the Smart Car Americanized by ZAP in 2005, DaimlerChrysler cited record losses in excess of $5 billion on the Smart Car while closing down plants and laying off employees. ZAP had collected signed purchase orders totaling $2.2 billion, representing 156,000 cars and opened discussions with DaimlerChrysler in the hopes of expanding on its business plans by ordering the vehicles directly from the manufacturer. ZAP secured a $425 million revolving credit facility to assist with the purchase of the Smart Cars.

ZAP is continuing its automotive business plans with the only affordable, city-speed, 100 percent electric car, the Xebra. For details, visit http://www.zapworld.com .

####

About ZAP
ZAP has been a leader in advanced transportation technologies since 1994, delivering over 100,000 vehicles to consumers in more than 75 countries. At the forefront of fuel-efficient transportation with new technologies including energy efficient gas systems, hydrogen, electric, fuel cell, ethanol, hybrid and other innovative power systems, ZAP has a joint venture to manufacture electric and hybrid vehicles with Youngman Automotive Group, one of China's leading manufacturers of buses and trucks. ZAP is developing a high-performance crossover SUV electric car concept called ZAP-X engineered by Lotus Engineering. ZAP is also developing a new generation of vehicles using advanced nanotech batteries with Advanced Battery Technologies. The Company recently announced a strategic partnership with Dubai-based Al Yousuf Group to expand its international vehicle distribution. ZAP also makes an innovative, new portable energy technology that manages power for mobile electronics from cell phones to laptops. For product, dealer and investor information, visit http://www.zapworld.com.

Forward-looking statements in this release are made pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements involve risks and uncertainties, including, without limitation, continued acceptance of the Company's products, increased levels of competition for the Company, new products and technological changes, the Company's dependence upon third-party suppliers, intellectual property rights, and other risks detailed from time to time in the Company's periodic reports filed with the Securities and Exchange Commission.

For more information, please click here

Contacts:
Alex Campbell
707-525-8658

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