Tesla Motors, Inc.; Receipt of Petition for Renewal of Temporary Exemption from the Advanced Air Bag Requirements of FMVSS No. 208 |
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Topics: Tesla Roadster, National Highway Traffic Safety Administration
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Christopher J. Bonanti
Federal Register
June 8, 2011
[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 http://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: http://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 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. 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 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 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
http://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.
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\2\ See 65 FR 30680 (May 12, 2000).
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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.
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\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).
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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\
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\4\ 49 U.S.C. 30113(b)(3)(B)(i)
\5\ 49 CFR 555.6(a)(2)
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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\
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\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).
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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.
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\8\ 49 U.S.C. 30113(b)(1).
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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.
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\9\ 73 FR 4944 (Docket No. NHTSA-2008-0013).
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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.
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\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.
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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]
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