Czinger Vehicles--Receipt of Petition for Temporary Exemption

Czinger Vehicles--Receipt of Petition for Temporary Exemption

Publication: Federal Register
Signing Official: Steven S. Cliff
Agency: National Highway Traffic Safety Administration
Date: 7 July 2022
Topic: Czinger

[Federal Register Volume 87, Number 129 (Thursday, July 7, 2022)]
[Notices]
[Pages 40585-40588]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-14464]

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DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

[Docket No. NHTSA-2022-0057]

Czinger Vehicles--Receipt of Petition for Temporary Exemption

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

ACTION: Notice of receipt of petition for temporary exemption; request
for public comment.

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SUMMARY: Czinger Vehicles (Czinger) has petitioned NHTSA for a
temporary exemption from windshield requirements in Federal motor
vehicle safety standard (FMVSS) No. 205, Glazing materials. Czinger is
a low volume start-up manufacturer and seeks the exemption on the basis
that compliance with the standard would cause substantial economic
hardship. NHTSA is publishing this document in accordance with
statutory and administrative provisions and requests comment on the
merits of Czinger's exemption petition. NHTSA has made no judgement at
this time on the merits of the petition.

DATES: Comments must be received on or before August 8, 2022.

FOR FURTHER INFORMATION CONTACT: Callie Roach, Office of the Chief
Counsel, National Highway Traffic Safety Administration, 1200 New
Jersey Avenue SE, Washington, DC 20590. Telephone: 202-366-2992; Fax:
202-366-3820.
Comments: NHTSA invites you to submit comments on the petition
described herein and the questions posed below. You may submit comments
identified by docket number in the heading of this notice by any of the
following methods:
Fax: 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 a.m. and 5 p.m.,
Monday through Friday, except Federal Holidays. To be sure someone is
there to help you, please call (202) 366-9322 before coming.
Federal eRulemaking Portal: Go to http://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 http://www.regulations.gov, including any personal
information provided. Please see the Privacy Act discussion below.
NHTSA will consider all comments received before the close of business
on the comment closing date indicated above. To the extent possible,
NHTSA will also consider comments filed after the closing date.
Docket: For access to the docket to read background documents or
comments received, go to http://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 a.m. and 5 p.m., Monday through Friday,
except Federal Holidays. To be sure someone is there to help you,
please call (202) 366-9322 before coming.
Privacy Act: In accordance with 5 U.S.C. 553(c), DOT solicits
comments from the public to better inform its rulemaking process. DOT
posts these comments, without edit, to www.regulations.gov, as
described in the system of records notice, DOT/ALL-14 FDMS, accessible
through www.dot.gov/privacy. In order to facilitate comment tracking
and response, we encourage commenters to provide their name, or the
name of their organization; however, submission of names is completely
optional. Whether or not commenters identify themselves, all timely
comments will be fully considered. If you wish to provide comments
containing proprietary or confidential information, please contact the
agency for alternate submission instructions.
Confidential Business Information: If you wish to submit any
information under a claim of confidentiality, see the detailed
instructions given under the Public Participation heading of the
Supplementary Information section of this document.

SUPPLEMENTARY INFORMATION:

I. Statutory and Regulatory Requirements

NHTSA is responsible for promulgating and enforcing FMVSS designed
to improve motor vehicle safety. Generally, a manufacturer may not
manufacture for sale, sell, offer for sale, or introduce or deliver for
introduction into interstate commerce a vehicle that does not comply
with all applicable FMVSS.\1\ There are limited exceptions to this
general prohibition.\2\ One path permits manufacturers to petition
NHTSA for an exemption for noncompliant vehicles under specified set of
statutory bases.\3\
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\1\ 49 U.S.C. 30112(a)(1).
\2\ 49 U.S.C. 30112(b); 49 U.S.C. 30113; 49 U.S.C. 30114.
\3\ 49 U.S.C. 30113.
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The National Traffic and Motor Vehicle Safety Act (Safety Act),
codified at 49 U.S.C. Chapter 301, authorizes the Secretary of
Transportation to exempt, on a temporary basis and under specified
circumstances, and on terms the Secretary considers appropriate, motor
vehicles from a FMVSS 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.\4\
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\4\ 49 CFR 1.94.
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The Safety Act authorizes NHTSA (by delegation) to grant, in whole
or in part, a temporary exemption to a vehicle manufacturer if certain
specified findings are made.\5\ The agency must find that the exemption
is consistent with the public interest and the objectives of the Safety
Act.\6\ In addition, exemptions under Sec. 30113 must meet one of the
following bases:
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\5\ 49 U.S.C. 30113(b)(3).
\6\ 49 U.S.C. 30113(b)(3)(A).
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(i) Compliance with the standard[s] [from which exemption is
sought] would cause substantial economic hardship to a manufacturer
that has tried to comply with the standard[s] in good faith;
(ii) 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;
(iii) 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
(iv) compliance with the standard would prevent the manufacturer
from

[[Page 40586]]

selling a motor vehicle with an overall safety level at least equal to
the overall safety level of nonexempt vehicles.\7\
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\7\ 49 U.S.C. 30113(b)(3)(B).
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Czinger submitted its petition under the first of these bases,
asserting that compliance with the standard would cause it substantial
economic hardship and it has tried in good faith to comply with the
standard.
NHTSA established 49 CFR part 555, Temporary Exemption from Motor
Vehicle Safety and Bumper Standards, to implement the statutory
provisions concerning temporary exemptions. The requirements in 49 CFR
555.5 state that the petitioner must set forth the basis of the
petition by providing the information required under 49 CFR 555.6, and
the reasons why the exemption would be in the public interest and
consistent with the objectives of the Safety Act. A petition submitted
under the substantial economic hardship basis must include the
following information, as specified in 49 CFR 555.6(a):
(1) Engineering and financial information demonstrating in detail
how compliance or failure to obtain an exemption would cause
substantial economic hardship, including--
(i) A list or description of each item of motor vehicle equipment
that would have to be modified in order to achieve compliance;
(ii) The itemized estimated cost to modify each such item of motor
vehicle equipment if compliance were to be achieved--
(A) As soon as possible,
(B) At the end of a 1-year exemption period (if the petition is for
1 year or more),
(C) At the end of a 2-year exemption period (if the petition is for
2 years or more),
(D) At the end of a 3-year exemption period (if the petition is for
3 years),
(iii) The estimated price increase per vehicle to balance the total
costs incurred pursuant to paragraph (a)(1)(ii) of this section and a
statement of the anticipated effect of each such price increase;
(iv) Corporate balance sheets and income statements for the three
fiscal years immediately preceding the filing of the application;
(v) Projected balance sheet and income statement for the fiscal
year following a denial of the application; and
(vi) A discussion of any other hardships (e.g., loss of market,
difficulty of obtaining goods and services for compliance) that the
petitioner desires the agency to consider.
(2) A description of its efforts to comply with the standards,
including--
(i) A chronological analysis of such efforts showing its
relationship to the rulemaking history of the standard from which
exemption is sought;
(ii) A discussion of alternate means of compliance considered and
the reasons for rejection of each;
(iii) A discussion of any other factors (e.g., the resources
available to the petitioner, inability to procure goods and services
necessary for compliance following a timely request) that the
petitioner desires the NHTSA to consider in deciding whether the
petitioner tried in good faith to comply with the standard;
(iv) A description of the steps to be taken, while the exemption is
in effect, and the estimated date by which full compliance will be
achieved either by design changes or termination of production of
nonconforming vehicles; and
(v) The total number of motor vehicles produced by or on behalf of
the petitioner in the 12-month period prior to filing the petition, and
the inclusive dates of the period. (49 U.S.C. 30113(d) limits
eligibility for exemption on the basis of economic hardship to
manufacturers whose total motor vehicle production in the year
preceding the filing of their applications does not exceed 10,000.)

II. Czinger's Petition

The following discussion provides: An overview of Czinger's
petition; a brief summary of the information Czinger submitted to
demonstrate that compliance would cause it substantial economic
hardship, the efforts Czinger has made to comply with the standard, and
Czinger's arguments that granting the petition would be in the public
interest. Because Czinger has sought confidential treatment of some
aspects of its petition, a redacted version of its petition is included
in the docket referenced at the beginning of this notice. NHTSA notes
that any of the descriptions provided in this section were provided by
Czinger in its petition and do not necessarily reflect the views of
NHTSA.

A. Overview of the Czinger's Petition

On December 12, 2021, Czinger submitted a petition for exemption
under 49 CFR part 555 for a temporary exemption from parts of FMVSS No.
205, Glazing materials. Specifically, Czinger is requesting an
exemption from requirements for glazing to be used in windshields of
Czinger's 21C model on the basis that compliance with the standard
would cause substantial economic hardship.\8\ Czinger is seeking a
temporary exemption for three years to allow Czinger to produce 55
noncompliant vehicles. Czinger states that all glazing on the 21C will
be compliant with FMVSS No. 205 with the exception of the
windshield.\9\ Czinger states that it believes that the only
requirements with which the windshield will not comply are those
regarding abrasion resistance.\10\ As described in Czinger's petition,
the windshield for the 21C is made from polycarbonate to accommodate
the windshield's unique shape.\11\
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\8\ Czinger petition at page 4.
\9\ Id.
\10\ Id. Czinger notes in their petition that the abrasion
requirements may still be met as development is ongoing.
\11\ Id. at page 9.
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Czinger states that it is a very small volume start-up producer of
innovative sports cars and has not yet started manufacturing.\12\ Once
production starts in 2023, Czinger states that it will produce
approximately 50 cars per year worldwide.\13\ The forecasted production
and US sales estimates provided by Czinger indicate that, for the three
years for which Czinger is requesting a temporary exemption, Czinger
expects to sell a total of 55 vehicles to the U.S. market.\14\ Czinger
states that its 21C model vehicle is presently under development and
describes it as a Hypercar comprised of lightweight materials and a
power-dense production internal combustion engine.\15\ Czinger further
explains that the vehicle is produced using Additive Manufacturing (AM)
technology (the industrial production name for 3D printing), which
Czinger asserts requires less material, less energy, and less
infrastructure than current, widely used, production techniques.\16\
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\12\ Id. at page 3.
\13\ Id.
\14\ Id. at page 6. Czinger's forecasted production for Model
Years 2023, 2024, and 2025 is 20 vehicles, 50 vehicles, and 10
vehicles respectively, with an estimated 10 vehicles, 35 vehicles,
and 10 vehicles sold in the U.S. in those years.
\15\ Id. at page 3.
\16\ Id.
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B. Substantial Economic Hardship

To be eligible for a temporary exemption under the substantial
economic hardship basis, the petitioner's total motor vehicle
production in the most recent year of production must be not more than
10,000 vehicles.\17\ To demonstrate compliance with this requirement,
and pursuant to 49 CFR 555.6(a)(2)(v),

[[Page 40587]]

Czinger stated that it has not produced any motor vehicles to date.\18\
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\17\ 49 U.S.C. 30113(d).
\18\ Czinger petition at page 4.
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In support of its claim that compliance with the windshield
requirements would cause substantial economic hardship, Czinger states
that it is experiencing substantial economic hardship, which would be
exacerbated by the denial of its exemption petition.\19\ Czinger states
that it has 35 employees and has been operating since 2021 without any
sales.\20\ Czinger states that, in a best-case scenario, the company
will have two additional years with high expenses and no sales while
product development for the 21C is completed.\21\
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\19\ Id. at page 6.
\20\ Id.
\21\ Id.
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Czinger states that compliance with the standard will result in an
extra loss of $38 million.\22\ Czinger explains that the additional
loss would result from an additional $3.7 million in research in
development costs, a 6-month delay bringing their product to market,
and a 15% loss of 21C sales due to the car's modified aesthetics
(necessitated by a laminated windshield).\23\
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\22\ Id. at page 7.
\23\ Id.
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In further support of its petition, Czinger notes that it has been
enduring the pandemic and supply chain issues which, Czinger states,
are straining even established OEMs.\24\ As a startup, Czinger states
that it needs flexibility to endure these challenges.\25\
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\24\ Id. at page 8.
\25\ Id.
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C. Good Faith Efforts To Comply

Pursuant to 49 CFR 555.6(a)(2), a petition for a temporary
exemption made under the substantial economic hardship basis must
include a description of the petitioner's efforts to comply with the
standard for which the exemption is sought. In support of its petition,
Czinger asserts that it has put considerable good faith efforts into
FMVSS compliance.\26\
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\26\ Id.
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Czinger states that the 21C has been designed with in-line seating
for two occupants.\27\ The central seating position, Czinger explains,
allows for an extremely streamlined frontal profile, reducing drag and
improving fuel economy, as well as improving performance.\28\ Czinger
states that this ``fighter jet'' design has been highly regarded by
media, and more significantly, prospective clients.\29\
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\27\ Id.
\28\ Id.
\29\ Id.
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Czinger states that the wrap-around cockpit is realized by a unique
double curvature windscreen, which during prototype stage, was produced
in polycarbonate by a supplier in Europe, Iscolima.\30\ Czinger states
that the hard polycarbonate material passes European requirements in
accordance with ECE R43, including impact performance and abrasion haze
resistance.\31\ Czinger states that because of the extreme size and
shape of the 21C windshield, its supplier, Iscolima, has informed
Czinger that the windshield must be produced in polycarbonate.\32\
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\30\ Id.
\31\ Id.
\32\ Id. at page 9.
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Czinger also states that at an early stage in the development of
the 21C, their supplier Isoclima indicated that it believed the
polycarbonate windshield would meet regulatory requirements for the USA
market.\33\ Czinger states that, based on this information, Czinger
proceeded with the polycarbonate windshield development.\34\
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\33\ Id.
\34\ Id.
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Czinger also states that, despite Iscolima's opinion that the shape
of the 21C windshield could not be produced in laminated glass, Czinger
invested time and money trying to develop, with the help of multiple
suppliers, the planned windshield shape in laminated glass.\35\ These
efforts, Czinger states, have not been successful.\36\
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\35\ Id.
\36\ Id.
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D. Czinger's Public Interest Argument

Czinger asserts that granting their petitions is consistent with
the public interest and the Safety Act for the following reasons:
1. The 21C model range will comply with all FMVSS other than the
windshield requirements in FMVSS 205.\37\
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\37\ Id. at page 10.
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2. The exempted cars will have a windshield that meets all EU
requirements.\38\
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\38\ Id.
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3. The exempted cars will not present an unacceptable safety
risk.\39\
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\39\ Id. at pages 10-11.
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4. The 21C will be produced in the US in very low numbers and will
not be used daily due to its unconventional design.\40\
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\40\ Id. at page 11.
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5. The denial of the exemption request could have a negative effect
on US employment.\41\
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\41\ Id.
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6. The 21C's innovative technology is a benefit to the public.\42\
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\42\ Id at page 12.
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III. Agency's Review of Czinger's Petition

NHTSA has not yet made any judgment on the merits of Czinger's
petition nor on the adequacy of the information submitted. NHTSA will
assess the merits of the petition and consider public comments on the
petition, as well as any additional information that the agency
receives from Czinger. NHTSA is placing a non-confidential copy of the
petition in the docket in accordance with statutory and administrative
provisions.

IV. Public Participation

A. Request for Comment and Comment Period

The agency seeks comment from the public on the merits of Czinger's
petition for a temporary exemption from portions of FMVSS No. 205.
NHTSA is providing a 30-day comment period. After conducting a
review of the adequacy for the justification for the petition and
considering public comments, NHTSA will publish a decision notice
regarding the petition in the Federal Register.

B. Instructions for Submitting Comments

How long do I have to submit comments?
Please see DATES section at the beginning of this document.
How do I prepare and submit comments?
Your comments must be written in English.
To ensure that your comments are correctly filed in the
Docket, please include the Docket Number shown at the beginning of this
document in your comments.
If you are submitting comments electronically as a PDF
(Adobe) File, NHTSA asks that the documents be submitted using the
Optical Character Recognition (OCR) process, thus allowing NHTSA to
search and copy certain portions of your submissions. Comments may be
submitted to the docket electronically by logging onto the Docket
Management System website at http://www.regulations.gov. Follow the
online instructions for submitting comments.
You may also submit two copies of your comments, including
the attachments, to Docket Management at the address given above under
ADDRESSES.
Please note that pursuant to the Data Quality Act, in order for
substantive data to be relied upon and used by the agency, it must meet
the information

[[Page 40588]]

quality standards set forth in the OMB and DOT Data Quality Act
guidelines. Accordingly, we encourage you to consult the guidelines in
preparing your comments. OMB's guidelines may be accessed at http://www.whitehouse.gov/omb/fedreg/reproducible.html. DOT's guidelines may
be accessed at http://www.bts.gov/programs/statistical_policy_and_research/data_quality_guidelines.
How do I submit 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
above 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
under ADDRESSES. 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). To facilitate
social distancing during COVID-19, NHTSA is temporarily accepting
confidential business information electronically. Please see https://www.nhtsa.gov/coronavirus/submission-confidential-business-information
for details.
Will the Agency consider late comments?
We will consider all comments that Docket Management receives
before the close of business on the comment closing date indicated
above under DATES. To the extent possible, we will also consider
comments that Docket Management receives after that date.
How can I read the comments submitted by other people?
You may see the comments on the internet. To read the comments on
the internet, go to http://www.regulations.gov. Follow the online
instructions for accessing the dockets.
Please note that, even after the comment closing date, we will
continue to file relevant information in the Docket as it becomes
available. Further, some people may submit late comments. Accordingly,
we recommend that you periodically check the Docket for new material.

Authority: 49 U.S.C. 30113 and 49 U.S.C. 30166; delegations of
authority at 49 CFR 1.95 and 49 CFR 501.5.

Issued in Washington, DC, under authority delegated in 49 CFR
1.95 and 501.8.
Steven S. Cliff,
Administrator.
[FR Doc. 2022-14464 Filed 7-6-22; 8:45 am]
BILLING CODE 4910-59-P