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Czinger Vehicles--Grant of Petition for Temporary Exemption From Certain Requirements of FMVSS No. 205, Glazing Materials Publication: Federal Register Agency: National Highway Traffic Safety Administration Byline: Sophie Shulman Date: 31 May 2023 Subjects: American Government  , Safety
Topic: Czinger 21C |
[Federal Register Volume 88, Number 104 (Wednesday, May 31, 2023)]
[Notices]
[Pages 34919-34926]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-11453]
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DEPARTMENT OF TRANSPORTATION
National Highway Traffic Safety Administration
[Docket No. NHTSA-2022-0057]
Czinger Vehicles--Grant of Petition for Temporary Exemption From
Certain Requirements of FMVSS No. 205, Glazing Materials
AGENCY: National Highway Traffic Safety Administration (NHTSA),
Department of Transportation (DOT).
ACTION: Notice of grant of petition for temporary exemption.
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SUMMARY: This notice grants the petition of Czinger Vehicles (Czinger)
for a temporary exemption from windshield abrasion resistance
requirements in Federal motor vehicle safety standard (FMVSS) No. 205,
Glazing materials. The basis for the exemption is that compliance with
these requirements would cause substantial economic hardship to a low
volume manufacturer that has tried in good faith to comply with the
standard. This action follows our publication in the Federal Register
of a document announcing receipt of Czinger's petition and soliciting
public comments. We received no comments on the petition.
DATES: The exemption from the windshield abrasion resistance
requirements in FMVSS No. 205 is effective from August 1, 2023, through
July 31, 2026.
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.
SUPPLEMENTARY INFORMATION: NHTSA is granting a request from Czinger for
a temporary exemption from FMVSS No. 205's abrasion resistance
requirements for windshields for its first vehicle model, the 21C. In
accordance with statutory and regulatory requirements, NHTSA is
granting the petition on the basis that compliance would cause
substantial economic hardship to a low volume manufacturer that has
tried in good faith to comply with the standard.
I. Relevant Legal Authority and Regulations
a. Statutory and Regulatory Requirements for Temporary Exemptions
NHTSA is responsible for promulgating and enforcing FMVSS designed
to improve motor vehicle safety. Generally, a manufacturer may
[[Page 34920]]
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
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 1.95.
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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 four
bases. Czinger petitioned under the first of these bases, asserting
that ``[c]ompliance 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.'' \7\
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\5\ 49 U.S.C. 30113(b)(3).
\6\ 49 U.S.C. 30113(b)(3)(A).
\7\ 49 U.S.C. 30113(b)(3)(B)(i).
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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
on the substantial economic hardship basis must include the information
specified in 49 CFR 555.6(a).
b. FMVSS No. 205 Abrasion Requirements for Windshields
Czinger's petition seeks an exemption from requirements in FMVSS
No. 205, Glazing materials. The purpose of FMVSS No. 205 is to reduce
injuries (e.g., lacerations) resulting from impact to glazing surfaces,
to ensure a necessary degree of transparency in motor vehicle windows
for driver visibility, and to minimize the possibility of occupants
being thrown through the windows in collisions. Most of the performance
requirements for glazing, including the requirement from which Czinger
is seeking an exemption, are found in an industry standard, the
``American National Standards Institute American National Standard for
Safety Glazing Materials for Glazing Motor Vehicles and Motor Vehicle
Equipment Operating on Land Highways-Safety Standard'' (ANSI/SAE Z26.1-
1996), which FMVSS No. 205 incorporates by reference.
Czinger's petition concerns requirements for glazing used in
windshields. ANSI/SAE Z26.1-1996 sets forth groups of tests that must
be met by different glazing types. The standard explains that
``[s]afety glazing materials in motor vehicles shall comply with the
applicable requirements listed in this subsection and shown in Table 1,
item by item, in definite groupings of tests that are appropriate for
the safety glazing material in question, and the location in the motor
vehicle in which it is intended to be used.'' For example, AS-1 glazing
may be used anywhere in vehicles, including windshields. For AS-1
glazing, the standard provides a list of tests for Laminated Glass,
Class 1 Multiple Glazed Unit, and Class 2 Multiple Glazed Unit. For AS-
1 glazing, Laminated Glass must meet Test Nos. 1, 2, 3, 4, 9, 12, 15,
18, and 26. As additional background, although the glazing Czinger
proposes to use in the 21C's windshield is polycarbonate, NHTSA does
not prohibit the material from being used in windshields so long as it
meets the tests for one of the glazing types listed. In an
interpretation letter issued to Exatec, LLC, NHTSA explained that
glazing types not listed in the standard may be used interchangeably
with the corresponding materials specified in the standard if and when
other materials are developed that possess properties such that they
meet one or another of the prescribed groups of tests.\8\
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\8\ See letter to Mr. Clemens Kaiser (September 23, 2005),
available at https://www.nhtsa.gov/interpretations/04-005908drn.
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Czinger's petition requests an exemption from the requirement that
windshield glazing meet the performance requirements specified in Test
18 for abrasion resistance. The purpose of these abrasion requirements
is to ensure that the glazing will resist scratching that can distort
the driver's view and thus reduce visibility. Test 18 requires that a
specimen of the glazing be subjected to abrasion for 1000 cycles in the
manner described in ANSI/SAE Z26.1-1996 section 5.17. After the
specimen has been abraded, the amount of light scattered by the
specimen cannot exceed 2.0%.
II. Czinger's Petition and Supplemental Information
In accordance with 49 U.S.C. 30113 and the procedures in 49 CFR
part 555, Czinger submitted a petition on December 12, 2021 for a
temporary exemption from the windshield abrasion resistance
requirements in FMVSS No. 205, Glazing materials. In addition to its
original petition, Czinger submitted supplemental information on
October 21, 2022 and January 25, 2023. Copies of these materials have
been placed in the docket identified at the beginning of this document.
In its petition, Czinger describes itself as a small volume start-
up producer of innovative sports cars.\9\ Czinger states that it is
located in Los Angeles, California and was founded in 2021.\10\ Czinger
further states that once production begins in 2023, the company will
produce approximately 50 cars per year worldwide.\11\ 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.\12\
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\9\ Czinger petition at page 3.
\10\ Id.
\11\ Id.
\12\ 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.
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Czinger is seeking an exemption for the Czinger 21C model. Czinger
states that its 21C model vehicle is presently under development and
describes it as a hypercar comprised of lightweight materials and a
hybrid electric powertrain system as its foundation.\13\ Czinger
describes the 21C as a ``still-in development high-technology, ultra-
high performance, high quality Hypercar.'' \14\ In support of these
assertions, Czinger states that the ``advanced AI developed multi
material chassis delivers exceptional light weight'' and that the
``crash structures have been optimized to deliver the safest Hyper-
sports car on the
[[Page 34921]]
market.'' \15\ Czinger states that the 21C's hybrid power train uses
the world's most power-dense production internal combustion engine as
its foundation and that the total strong hybrid system delivers a peak
output of 1250hp (1233bhp).\16\ Czinger also states that the 21C's low
drag configuration optimizes light-weighting and aerodynamics, allowing
for greater efficiency at all speeds.\17\ Czinger explains that the
vehicle is produced using Additive Manufacturing 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.\18\
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\13\ Id. at page 3.
\14\ Id.
\15\ Id.
\16\ Id.
\17\ Id.
\18\ Id. at page 4.
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Requested Exemption. Czinger petitioned for an exemption from
requirements for glazing it seeks to use in the windshield of Czinger's
21C model on the basis that compliance with the standard would cause
substantial economic hardship. Czinger is seeking a temporary exemption
for three years to allow Czinger to produce a total of 55 noncompliant
vehicles. Czinger states that all glazing on the 21C will be compliant
with FMVSS No. 205 with the exception of the windshield.\19\ Czinger
states that it believes that the only requirements with which the
windshield will not comply are those regarding abrasion resistance.\20\
In supplemental information submitted on October 21, 2022, Czinger
confirmed that the glazing for use in the 21C's windshield meets the
performance requirements in Tests Nos. 1, 2, 3, 4, 9, 12, 15, and
26.\21\ Czinger also confirmed that the glazing is not expected to meet
the abrasion requirements in Test 18.\22\
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\19\ Id.
\20\ Id.
\21\ Czinger's Supplemental Information Submission from October
2022 at page 2.
\22\ Id. at page 2.
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Eligibility. To be eligible for a temporary exemption on 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.\23\ To demonstrate compliance with this
requirement, and pursuant to 49 CFR 555.6(a)(2)(v), Czinger stated that
it has not produced any motor vehicles to date.\24\
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\23\ 49 U.S.C. 30113(d).
\24\ Czinger petition at page 4.
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Substantial economic hardship. In support of its claim that
compliance with the windshield abrasion resistance 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.\25\ Czinger states that it has
35 employees and has been operating since 2021 without any sales.\26\
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.\27\
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\25\ Id. at page 6.
\26\ Id.
\27\ Id.
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Czinger states that compliance with the standard would result in an
extra loss of $38 million.\28\ Czinger explains that the additional
loss would result from an additional $3.7 million in research and
development costs, a 6-month delay bringing its product to market, and
a 15% loss of 21C sales due to the car's modified aesthetics (as
necessitated by a laminated windshield).\29\
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\28\ Id. at page 7.
\29\ 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.\30\ As a startup, Czinger states
that it needs flexibility to endure these challenges.\31\
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\30\ Id. at page 8.
\31\ Id.
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In supplemental information submitted in January 2023, Czinger
indicated that because compliance with the windshield abrasion
requirement cannot be achieved with the current vehicle design, in the
absence of an exemption, Czinger would produce the vehicle for export
only.\32\ Czinger states that if the exemption were granted for only
one year, production for the U.S. market would be reduced by 82% and if
the exemption were granted for only two years, production for the U.S.
market would be reduced by 18%.\33\ Czinger also provided information
about the losses of revenue associated with those lower production
volumes. Given the development costs Czinger has incurred to date,
Czinger states that the loss in sales from not being able to sell
vehicles in the U.S. would result in financial failure of the
business.\34\
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\32\ Czinger's Supplemental Information Submission from January
2023 at page 3.
\33\ Id.
\34\ Id.
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In the supplemental information submitted in January 2023, Czinger
also stated that if the exemption were granted, it would allow Czinger
to ``secure revenue essential to its continuation and allow it to form
a bridge to be in a position to produce vehicles where such exemptions
are not required.'' \35\ Czinger noted that while its first vehicle
model, the 21C, is a low volume hypercar, the majority of Czinger's
future business will be higher volume vehicles such as the Czinger
Hyper GT which was revealed at Monterey Car Week in August 2022.\36\
This subsequent model, Czinger states, uses a more conventional
windshield shape for which the production material will be conventional
automotive glass.\37\
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\35\ Id. at page 2.
\36\ Id.
\37\ Id.
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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.\38\
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\38\ Czinger's petition at page 8.
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Czinger states that the 21C has been designed with in-line seating
for two occupants.\39\ The central seating position, Czinger explains,
allows for an extremely streamlined frontal profile, reducing drag and
improving fuel economy, as well as improving performance.\40\ Czinger
states that this ``fighter jet'' design has been highly regarded by
media, and more significantly, by prospective clients.\41\
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\39\ Id.
\40\ Id.
\41\ 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 Isoclima, a supplier in Europe.\42\
Czinger states that the hard polycarbonate material passes European
requirements in accordance with ECE R43, including impact performance
and abrasion haze resistance.\43\ Czinger states that because of the
extreme size and shape of the 21C windshield, its supplier, Isoclima,
has informed Czinger that the windshield must be produced in
polycarbonate.\44\
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\42\ Id.
\43\ Id.
\44\ Id. at page 9.
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Czinger also states that at an early stage in the development of
the 21C, its supplier Isoclima indicated that it believed the
polycarbonate windshield would meet regulatory requirements for the USA
market.\45\ Czinger states that, based on this information, Czinger
[[Page 34922]]
proceeded with the polycarbonate windshield development.\46\
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\45\ Id.
\46\ Id.
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Czinger also states that, despite Isoclima'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.\47\
Specifically, Czinger states that it engaged a Los Angeles-based
artisan glazing supplier and tried 20 iterations of tooling strategies,
produced over 80 test samples, and made some design changes to improve
formability.\48\ These efforts, Czinger states, have not been
successful.\49\
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\47\ Id.
\48\ Id.
\49\ Id.
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In supplemental information submitted in January 2023, Czinger
stated that it undertook a comprehensive assessment, at a cost of
$80,000, of different physical manufacturing techniques with its
windshield supplier, Isoclima, in a concerted effort to achieve a
solution to manufacture the windshield in glass.\50\ The effort,
Czinger states, proved unsuccessful and the conclusion was that due to
the geometry of the windshield, it could not be manufactured in
glass.\51\
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\50\ Czinger's Supplemental Information Submission from January
2023 at page 2.
\51\ Id.
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Public Interest. Czinger asserts that granting its petition 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.\52\
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\52\ Id. at page 10.
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2. The exempted cars will have a windshield that meets all EU
requirements.\53\
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\53\ Id.
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3. The exempted cars will not present an unacceptable safety
risk.\54\
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\54\ Id. at pages 10-11.
In support of this assertion, Czinger states that the 21C's crash
performance and occupant protection performance is improved when using
polycarbonate, compared to laminated glass.\55\ Czinger states that it
has run crash simulations measuring occupant injury criteria and
observes overall improvements in performance with the polycarbonate
windshield.\56\ Czinger also notes that the 21C has an advanced dynamic
knee bolster that deploys a lower IP surface to minimize forward
movement of the driver in an unbelted impact scenario.\57\ Czinger
asserts that this system, in combination with the highly optimized DAPS
(Divergent Adaptive Production System) front crash structure, virtually
negates the possibility of head impact to the windshield.\58\
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\55\ Id. at page 11.
\56\ Id. at page 11.
\57\ Id.
\58\ Id.
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As regards visibility, Czinger states its belief that since
polycarbonate windshields are permitted in aircrafts, the risks of
unacceptable impaired driver visibility due to abrasion are de minimis.
Czinger also states that 21C's windshield glazing passes the European
requirements for abrasion haze resistance in ECE R43.\59\ In
supplemental information submitted in October 2022, Czinger stated that
the 21C's polycarbonate windshield will also meet all of the required
tests for AS-4 glazing, which is rigid plastic glazing for use in
specific areas of vehicles.\60\ AS-4 glazing is required to meet Test
Nos. 2, 10, 13, 16, 17, 19, 20, 21, and 24 . In support of its
assertion that the 21C's windshield glazing meets the AS-4
requirements, Czinger submitted a copy of a 2016 third party laboratory
test report that states that the 3mm and 6mm thick samples of the
Isoclima material, which Czinger states that it is using in its
windshield, have passed Item 4 (AS4) testing. A copy of this report is
included in Czinger's supplementary submission from October 2022 and
available in the docket identified at the beginning of this notice.
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\59\ Id. at page 8.
\60\ AS-4 glazing may be used in the windshield of low-speed
vehicles, in interior partitions and auxiliary wind deflectors,
folding doors, standee windows in buses, flexible curtains or
readily removable windows or in ventilators used in conjunction with
readily removable windows, openings in the roof not requisite for
driving visibility, trailers, glazing to the rear of the driver in
trucks or truck tractor cabs where other means of affording
visibility of the highway to the side and rear of the vehicle are
provided, the rear windows of convertible passenger car tops, the
rear doors of taxicabs, readily removable windows of buses having a
GVWR of more than 4540 kg (10,000lb), windows and doors in
motorhomes (except for the windshields and windows to the immediate
right or left of the driver), windows and doors in slide-in campers
and pickup covers, and windows and doors in buses except for the
windshield, windows to the immediate right or left of the driver,
and rearmost windows if used for driving visibility. See 49 CFR
571.205 S5.4 and ANSI/SAE Z26.1-1996 page 8.
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4. The 21C will be produced in the U.S. in very low numbers and
will not be used daily due to its unconventional design.\61\
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\61\ Czinger Petition at page 11.
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In support of this assertion, Czinger states that the 21C will be a
hand-built specialty car, high-priced and with an unusual design.\62\
Czinger states that it believes owners of 21C vehicles will use their
vehicles occasionally, rather than for regular transportation, and
predicts that the 21Cs will be driven a mere 350 miles per year.\63\ In
support of this estimate, Czinger provided data for 33 hypercars valued
at more than $1 million demonstrating an average accumulated mileage of
259 miles per year.\64\ Czinger provided additional information about
the hypercar use case in the supplemental information submitted in
October 2022. Czinger stated that a hypercar is atypical when compared
to more conventional vehicles.\65\ Czinger also stated that it
performed some analysis with a sample of 53 hypercars across a range of
brands and found that the average mileage of these vehicles was 266
miles per year.\66\
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\62\ Id.
\63\ Id.
\64\ Id. at page 15.
\65\ Czinger's Supplemental Information submitted in October
2022 at page 3.
\66\ Id.
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5. The denial of the exemption request could have a negative effect
on U.S. employment.\67\
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\67\ Id. at page 11.
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In support of this assertion, Czinger states that denying its
petition could result in temporary job loses, not only at Czinger, but
throughout its distribution chain.\68\ Czinger also notes that the same
negative effect was identified by NHTSA in a 2006 decision notice
granting an exemption to Ferrari.\69\
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\68\ Id.
\69\ Id. at 11 citing a May 22, 2006 notice (71 FR 29389)
stating ``[w]e note that Ferrari is a well-established company with
a small but not insignificant U.S. presence, and we believe that an
85 percent sales reduction would negatively affect U.S. employment.
Specifically, reduction in sales would likely affect employment not
only at Ferrari North America, but also at Ferrari dealers, repair
specialists, and several small service providers that transport
Ferrari vehicles from the port of entry to the rest of the United
States. Traditionally, the agency has concluded that the public
interest is served in affording continued employment to the
petitioner's U.S. work force.''
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6. The 21C's innovative technology is a benefit to the public.\70\
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\70\ Id at page 12.
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In support of this assertion, Czinger states that the 21C offers
very significant public interest benefits--the use of Additive
Manufacturing technology, weight-saving technology, advanced hybrid
drivetrain technology, and innovative crash protection technology.\71\
Czinger states that granting its requested exemption would expedite
bringing these technologies to the U.S. market.\72\
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\71\ Id.
\72\ Id.
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Additional Czinger Steps. Czinger states that each 21C sold under
an exemption will undergo regular,
[[Page 34923]]
frequent inspections, and any windshield with degraded visibility will
be identified and replaced free of charge. In supplemental information
submitted in October 2022, Czinger stated that it would be willing to
install tear offs, which are thin protective films.\73\ Czinger states
that it could install these films on the windshield and the films could
be a regular service item.\74\
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\73\ Czinger's Supplemental Information submitted in October
2022 at page 3.
\74\ Id.
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III. Request for Public Comment
On July 7, 2022, NHTSA published a notice in the Federal Register
announcing receipt of Czinger's petition and requesting public
comment.\75\ The notice provided a 30-day comment period, which closed
on August 8, 2022. No comments were received.
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\75\ 87 FR 40585.
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IV. Agency Analysis and Decision
In this section we provide our analysis and decision regarding
Czinger's temporary exemption request from certain requirements in
FMVSS No. 205. As explained below, we are granting Czinger's petition
for the 21C to be exempted from the requirement for the glazing
materials in the 21C's windshield to meet Test 18. The agency's
rationale for this decision is as follows:
Eligibility. As discussed above, a manufacturer is eligible to
apply for an economic hardship exemption if its total motor vehicle
production in its most recent year of production did not exceed 10,000
vehicles. In its petition, Czinger indicated that at the time of
submitting the petition, it had not produced any vehicles for sale and
stated that it predicted producing 55 vehicles during the exemption
period if an exemption were granted. Accordingly, we have determined
that Czinger is eligible to apply for an economic hardship exemption as
a low volume manufacturer.
Economic Hardship. Czinger states that compliance with the standard
will result in an extra loss of $38 million.\76\ Czinger states that it
has 35 employees and has been operating since 2021 without any
sales.\77\ 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.\78\ Czinger explains that
denial of its petition would result in an additional loss of $3.7
million in research and development costs, a 6-month delay bringing its
product to market, and an estimated 15% loss of 21C sales due to the
car's modified aesthetics (as necessitated by a laminated
windshield).\79\ The confidential information Czinger submitted in its
petition supports its assertion that it is experiencing substantial
economic hardship, which would be exacerbated by the denial of its
exemption petition.
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\76\ Id. at page 7.
\77\ Id.
\78\ Id.
\79\ Id.
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The touchstone that NHTSA uses in determining the existence of
substantial economic hardship is an applicant's financial health, as
indicated by its income statements. NHTSA has tended to consider a
continuing and cumulative net loss position as strong evidence of
hardship.\80\ The theory behind NHTSA's rationale is that if a company
with a continuing net loss is required to divert its limited resources
to resolve a compliance problem on an immediate basis, it may be unable
to use those resources to resolve other problems that may affect its
viability. The agency has considered this especially important in its
treatment of petitioners that are just starting to manufacture
vehicles. Based on these factors, we conclude that Czinger has
demonstrated the requisite economic hardship.
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\80\ March 11, 1994 grant of petition of Bugatti Automobili,
S.p.A., (59 FR 11649 at 11650).
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Good Faith Efforts to Comply. In addition to demonstrating that
compliance with the standard for which it is seeking an exemption would
result in substantial economic hardship, Czinger must demonstrate that
it has made good faith efforts to comply with the standard. NHTSA
believes Czinger has met this requirement.
In this present case, NHTSA finds that Czinger had reason to
believe that it would be able to create a FMVSS-compliant version of
its unique vehicle design. Despite the vehicle's unique inline cockpit
seating arrangement necessitating a unique double curvature windshield,
Czinger had early assurances that its supplier would be able to produce
a windshield that met Czinger's shape requirements while also meeting
FMVSS requirements. NHTSA also finds that, at the point that Czinger
realized that the 21C's windshield would not meet the abrasion
resistance requirements, it took good faith efforts to try to source a
compliant windshield. Specifically, we note Czinger's statement that it
began efforts in August 2020 to locate a supplier that could produce
the windshield shape in laminated glass. Czinger stated that it engaged
a Los Angeles-based artisan glazing supplier and tried 20 iterations of
tooling strategies, produced over 80 test samples and made some design
changes to improve formability. When these efforts were not successful,
Czinger sought this exemption.
As explained in its petition and supplemental information from
January 2023, Czinger intends to stop production of the 21C for the
U.S. market at the end of the requested exemption period because it has
determined that it is not possible to create a FMVSS No. 205 compliant
windshield in the shape required for the 21C. NHTSA has no reason to
doubt this statement and believes that it further demonstrates that
Czinger has made good faith efforts to comply with the standard but is
unable to do so.
Public Interest. The final consideration for granting an exemption
under 49 U.S.C. 30113 and Part 555 is whether granting the exemption is
in the public interest and consistent with the objectives of the Safety
Act. NHTSA finds that in Czinger's case it is.
In its petition, Czinger cites six reasons that granting its
petition is in the public interest. The first four of these reasons are
related to safety. Czinger states, first, that the 21C will comply with
all applicable FMVSS except for windshield glazing requirements in
FMVSS No. 205; second, that the exempted vehicles will have a
windshield that meets all EU requirements; third, that the exempted
vehicles will not present an unacceptable safety risk; and fourth, that
the 21C will be built in small numbers and will not be driven daily due
to its unconventional design.
While NHTSA acknowledges that Czinger is only requesting an
exemption from one requirement and Czinger will only produce a small
number of the vehicles, this information alone is insufficient to
demonstrate that granting the exemption is in the public interest. That
is, a request for exemption from a single requirement for a small
number of vehicles could be inconsistent with the public interest if
that one exemption presents an unreasonable risk to motor vehicle
safety. For this reason, NHTSA first considered how granting the
exemption would impact safety.
Czinger's request is for an exemption from certain requirements for
windshield glazing. The abrasion resistance requirements are considered
to be crash avoidance requirements because the safety benefit of the
requirements is derived from the prevention of crashes as opposed to
the mitigation of the results of crash impacts (i.e., crashworthiness).
This means that instead of just considering how the exemption may
impact the
[[Page 34924]]
safety to occupants of an exempt vehicle, we must also consider how the
exemption may impact the safety of other road users.
We now turn to Czinger's second point and its assertions about how
it is able to assure that the 21C's windshield will provide adequate
driving visibility despite not meeting the abrasion resistance
requirements in Test No. 18 in ANSI/SAE Z26.1-1996. Czinger asserts
that the exemption presents minimal risk to safety because the
windshield complies with all European requirements for windshield
glazing, including the abrasion resistance requirements in ECE R43.
While NHTSA has not conducted a full analysis of the differences
between Test 18 and the requirements in ECE R43, NHTSA does consider
compliance with the ECE standard to be an indication that the glazing
used for the 21C's windshield has some level of resistance to abrasion,
which is expected to help maintain driver visibility.
In further support of the assertion that the exemption's safety
impact will be limited, Czinger provided information regarding the
compliance of the 21C's windshield with another abrasion resistance
requirement in ANSI/SAE Z26.1-1996. Specifically, Czinger states that
the glazing for use in windshields would meet all requirements for AS-4
glazing, including requirements for abrasion resistance. AS-4 glazing
is permitted to be used in specific locations in a motor vehicle and
must comply with Test Nos. 2, 10, 13, 16, 17, 19, 20, 21, and 24. The
abrasion resistance requirements are found in Test 17 and differ from
the requirements in Test 18 in two key aspects. First, while Test 17
and Test 18 use the same test method, specimens are abraded for 100
cycles in Test 17 and 1000 cycles in Test 18. Second, while Test 17
requires that the light scattered by the specimens not exceed 15.0%,
Test 18 requires that the light scattered by the specimens not exceed
2.0%. As with the information regarding compliance with ECE R43, NHTSA
considers the information regarding compliance with the less stringent
AS-4 requirements of Test 17 to be some indication of the windshield's
abrasion resistance. This information is supportive of Czinger's
assertion that the safety impacts of granting the exemption would be
minimal.
The decision to grant or deny an economic hardship exemption under
part 555 does not turn on whether the failure to meet the standard is
consequential to safety.\81\ Instead, the decision is based on whether
the petitioner meets the criteria for an economic hardship exemption
and whether, on balance, granting the petition is in the public
interest and consistent with the Safety Act.\82\ In implementing this
authority, NHTSA considers the risk associated with the particular
noncompliance and determines whether the specific circumstances warrant
granting an exemption to a low volume manufacturer that would otherwise
face economic hardship. NHTSA also considers whether granting the
exemption would introduce a defect that presents an unreasonable risk
to safety. The presence of such a defect would implicate NHTSA's defect
authority under the Safety Act and NHTSA would be compelled to find
that granting the exemption is not consistent with the Safety Act.
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\81\ However, as this glazing does not provide the same level of
safety performance as compliant glazing, NHTSA notes that it views
the failure to meet the abrasion resistance requirements of Test 18
as ``consequential'' to motor vehicle safety, and not as a basis,
e.g., for grant of a petition for inconsequential non-compliance
under 49 CFR part 556.
\82\ In contrast to the other three statutory bases for
exemptions under 49 U.S.C. 30113(b)(3)(B), which articulate safety
limitations (``safety level at least equal to the safety level of
the standard,'' ``not unreasonably lower the safety level of that
vehicle,'' and ``overall safety level at least equal to the overall
safety level of nonexempt vehicles''), the economic hardship
exemption contains no such limitation. NHTSA is left to apply the
exemption in a manner that is in the public interest and consistent
with the Safety Act.
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Considering the impacts of not meeting the abrasion resistance
requirements is just one part of NHTSA's consideration of the overall
safety impacts of granting Czinger's exemption request. NHTSA also
considers whether there are mitigating factors that may reduce the risk
associated with exemption, as well as whether there are any other
safety risks associated with the vehicle.
In order to mitigate risks associated with the noncompliance,
Czinger proposed two different additional steps that it could take.
First, in its petition, Czinger notes that each 21C sold under the
exemption would undergo regular, frequent inspections. Czinger states
that any windshield with degraded visibility would be identified and
replaced free-of-charge. NHTSA believes that this is an appropriate
mitigation measure and has decided to grant Czinger's exemption subject
to this term.
Czinger also suggested that it could install tear off screen
protectors on the windshield that could be periodically replaced. NHTSA
does not have sufficient information to evaluate the performance or
safety impact of these tear off protectors. In particular, NHTSA does
not know whether installation of the tear off protectors could decrease
the overall safety of the vehicle. Accordingly, NHTSA is not requiring
Czinger to install a protective screen on the 21C's windshield.
Additionally, NHTSA cautions Czinger that if it chooses to install such
a screen, it should take steps to ensure that the screen does not
impair the safety of the windshield.
NHTSA has considered the information provided by Czinger in its
petition and supplemental documentation and concludes that
noncompliance with the abrasion resistance requirements, if mitigated
by frequent inspection, would not result in an unreasonable risk to
safety.
Apart from consideration of the risks associated with not meeting
the abrasion resistance requirements, NHTSA believes it is appropriate
to consider how polycarbonate windshields may differ from glass
windshields in other ways. Czinger's petition is novel in that it is
requesting an exemption from a requirement that has posed a barrier to
the use of polycarbonate glazing and other plastics in vehicle
windshields other than in low-speed vehicles.\83\ Because of this
requirement, windshield glazing has, until now and to NHTSA's
knowledge, included a glass component that enabled the glazing to
comply with the abrasion resistance requirements in Test 18.
Heretofore, there has not been a need for NHTSA to consider whether
there are any additional requirements that should be met for
windshields beyond those considered for glass glazing. This is an
important consideration when evaluating a request for an exemption from
the abrasion resistance requirements. Glass and plastic have different
characteristics, such that when plastic glazing is permitted for use in
other locations in a vehicle (e.g., AS-4 glazing), the glazing must
also comply with tests that would not be applicable to glass glazing,
such as those for dimensional stability, chemical resistance,
weathering, and flammability. By providing information supporting its
assertion that the plastic glazing meets requirements for AS-4 glazing,
Czinger has addressed much of this concern. However, because AS-4
glazing is not permitted for exterior windows in areas requisite for
driving visibility, NHTSA notes that the safety performance of AS-4
plastic glazing is
[[Page 34925]]
not equivalent to glass glazing permitted for use in windshields.
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\83\ 49 CFR 571.205 S5.4.
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Czinger's third statement supporting its assertion that granting
its exemption request is in the public interest and consistent with the
Safety Act pertains to additional safety features included in the 21C.
Czinger asserts that the vehicles will not present an unacceptable
safety risk and states that the crash performance and occupant
protection performance of the vehicles is improved when using
polycarbonate, compared to laminated glazing. Specifically, Czinger
states that it has performed crash simulations measuring occupant
injury criteria and has observed overall improvements in performance.
Czinger also states that the 21C has an advanced knee bolster system to
minimize forward movement of the driver in an unbelted impact scenario,
reducing the possibility of head impact to the windscreen.
As noted earlier, NHTSA considers, as part of its evaluation of
whether granting a petition is in the public interest and consistent
with the Safety Act, the impact on safety resulting from the
noncompliance. If the noncompliance presented an unreasonable risk to
motor vehicle safety, NHTSA would deny the exemption, regardless of
whether the vehicles contained other features that increased the
overall safety of the vehicles. That is, safety improvements in one
area cannot offset unreasonable risks to safety in another. Therefore,
NHTSA does not consider Czinger's addition of the advanced
crashworthiness features described above as having a direct bearing on
whether noncompliance with the specific crash avoidance feature
(glazing abrasion resistance) from which it seeks exemption presents an
unreasonable risk to safety. However, NHTSA does consider the addition
of such safety features when considering the overall safety impact of
the exemption and the public interest benefits of supporting a start-up
manufacturer that is working to develop and deploy new safety features.
In this context, NHTSA has taken into account Czinger's addition of
these advanced crashworthiness features in today's decision.
Czinger's fourth assertion is that the 21C will be produced in very
small numbers and will not be used daily due to its unconventional
design. Czinger asserts that the safety risks associated with the
exemption would be minimal because the exempt vehicles would be driven
significantly less than conventional vehicles. In support of this
assertion, Czinger states that the 21C vehicles will cost more than $2
million and will likely be purchased as collectors' items and be well
cared for throughout their life. Czinger also provided mileage data
from other hypercars demonstrating an average of 266 miles traveled per
year. NHTSA agrees that it is appropriate to compare the 21C to other
hypercars when considering the likely use of the vehicles. For this
reason, NHTSA believes that Czinger's projection that the vehicles will
be driven, on average, 350 miles a year is reasonable. NHTSA also
agrees that limited use on public roads would minimize the risks
associated with granting the exemption. Czinger estimates that it will
only produce 55 vehicles for the U.S. market over the exemption period.
While not impacting the safety of the use of individual vehicles, the
limited production run of the vehicle would minimize the overall safety
impact of granting the exemption.
Overall, NHTSA has considered the safety risks associated with
Czinger's exemption request and believes that the safety impacts of
granting the request would be minimal given the limited nature of the
exemption, the limited number of vehicles affected, the expected
limited use of the vehicles, and Czinger's commitment to inspect the
windshields frequently and replace abraded windshields free of charge.
We now turn to Czinger's last two assertions supporting its
argument that granting the petition is in the public interest. Czinger
states that the denial of the exemption request could have a negative
effect on U.S. employment and that the 21C's innovative technology is a
benefit to the public. The information Czinger submitted indicating
that it would face financial failure if the exemption were denied also
supports Czinger's assertion that denying the petition would have a
negative impact on U.S. employment, not just on Czinger's 35 employees,
but also on its U.S. suppliers. In support of its assertion that the
21C's innovative technology is a benefit to the public, Czinger notes
that the 21C uses Additive Manufacturing technology, weight-saving
technology, advanced hybrid drivetrain technology, and innovative crash
protection technology. NHTSA agrees that both of these points weigh in
favor of granting Czinger's petition.
Based on the information Czinger provided, NHTSA believes that, on
balance, given the criteria for an economic hardship exemption, the
limited nature of the exemption, the limited number of vehicles
affected, the expected limited use of the vehicles, and Czinger's
commitment to inspect the windshields frequently and replace abraded
windshields free of charge, granting Czinger's petition is in the
public interest and consistent with the Safety Act. NHTSA believes that
the exemption will have minimal impact on motor vehicle safety due to
the limited number of vehicles affected and the mitigating factors that
reduce the safety risks associated with the requested exemption. NHTSA
also finds that granting Czinger's exemption request will help a start-
up company manufacture vehicles in the U.S., creating U.S.
manufacturing jobs while also supporting development of innovative
manufacturing processes in the automotive sector and affording
consumers a wider variety of motor vehicle choices.
Number of Exempt Vehicles. The statutory cap for exemptions for
low-volume manufacturers seeking a substantial hardship exemption
requires that the manufacturer must have an annual world-wide
production of 10,000 vehicles or less. Czinger originally petitioned
for an exemption of up to 55 vehicles over the exemption period.
However, in supplemental information submitted in January 2023, Czinger
noted that it intended to produce up to 110 vehicles during the three-
year exemption period, a substantial portion of which Czinger estimates
will be exported to other countries. This falls well below the
statutory cap, and NHTSA is granting the exemption for the entire
estimated production of the 21C during the exemption period, for a
total of 110 vehicles that may be manufactured and sold under the
exemption.
Effective Date of the Exemption. In correspondence from April 5,
2023, Czinger requested that, if granted, its exemption begin on August
1, 2023. NHTSA is granting this request.
V. Conclusion
In consideration of the foregoing, we conclude that compliance with
the abrasion resistance requirements for windshields in FMVSS No. 205
would cause substantial economic hardship to a manufacturer that has
tried in good faith to comply with the standard. We further conclude
that granting an exemption from this requirement would be in the public
interest and consistent with the Safety Act.
In accordance with 49 U.S.C. 30113(b)(3)(B)(i), the Czinger 21C is
granted NHTSA Temporary Exemption No. EX 23-01, from the abrasion
resistance requirements for AS-1 glazing to be used in the 21C's
windshield for up to 110 vehicles produced over the exemption period.
[[Page 34926]]
This exemption is effective from August 1, 2023 until July 31, 2026.
As explained above, the grant of this exemption is subject to the
following conditions.
1. Czinger shall provide inspections of the windshield glazing of
each 21C produced under this exemption, free of charge, at least once
every six months during the service life of the vehicle.
2. Czinger shall replace, free of charge, the windshield of any
exempted 21C vehicle produced under this exemption if the windshield
becomes abraded due to normal wear and tear such that the abrasion
noticeably impairs driver visibility.
3. Czinger shall report to NHTSA any instances in which it replaced
a windshield on a 21C exempted vehicle that had become abraded due to
normal use. Such report shall be made no later than 30 calendar days
after such replacement.
4. The label required to be affixed pursuant to 49 CFR 555.9 must
read in relevant part, ``except for the abrasion resistance
requirements for windshields in Standard No. 205, Glazing materials,
exempted pursuant to NHTSA Exemption No. EX 23-01.''
Authority: 49 U.S.C. 30113 and 49 U.S.C. 30166; delegations of
authority at 49 CFR 1.95 and 49 CFR 501.4.
Issued in Washington, DC, under authority delegated in 49 CFR
1.95 and 501.4.
Sophie Shulman,
Deputy Administrator.
[FR Doc. 2023-11453 Filed 5-30-23; 8:45 am]
BILLING CODE 4910-59-P