[Federal Register Volume 76, Number 151 (Friday, August 5, 2011)]
[Notices]
[Pages 47639-47641]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-19914]


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DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

[Docket No. NHTSA-2011-0110]


Tesla Motors, Inc.; Receipt of Petition for Temporary Exemption 
From the Electronic Stability Control Requirements of FMVSS No. 126

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

ACTION: Notice of receipt of a petition for temporary exemption from 
Federal Motor Vehicle Safety Standard (FMVSS) No. 126, Electronic 
Stability Control Systems.

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SUMMARY: In accordance with the procedures in 49 CFR part 555, Tesla 
Motors, Inc., has petitioned the agency for a temporary exemption from 
the electronic stability control requirements of FMVSS No. 126. The 
bases for the application are that the petitioner avers that the 
exemption would make the development or field evaluation of a low-
emission vehicle easier and would not unreasonably lower the safety 
level of that vehicle and 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 a 
temporary exemption 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 application, go to http://www.regulations.gov 
and enter the docket number set forth in the heading of this 
document.

DATES: You should submit your comments not later than September 6, 
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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 a.m. and 5 p.m., 
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, 
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. Statutory Basis for Temporary Exemptions

    The National Traffic and Motor Vehicle Safety Act (Safety Act), 
codified as 49 U.S.C. chapter 301, authorizes the Secretary of 
Transportation 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 in this section to NHTSA.
    NHTSA established 49 CFR part 555, Temporary Exemption from Motor 
Vehicle Safety and Bumper Standards, to implement the statutory 
provisions concerning temporary exemptions. A vehicle manufacturer 
wishing to obtain an exemption from a standard must demonstrate in its 
application (A) that an exemption would be in the public interest and 
consistent with the Safety Act and (B) that the manufacturer satisfies 
one of the following four bases for an exemption: (i) Compliance with 
the standard would cause substantial economic hardship to a 
manufacturer that has tried to comply with the standard 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 selling a motor vehicle with an 
overall safety level at least equal to the overall safety level of 
nonexempt vehicles.
    Only small manufacturers can obtain an economic hardship exemption. 
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.

[[Page 47640]]

30113). In determining whether a manufacturer of a vehicle meets that 
criterion, NHTSA considers whether another entity also might be deemed 
a manufacturer of that vehicle and whether the production volumes of 
each of the two manufacturers should be combined in assessing whether 
the criterion is met. A second entity might be deemed a manufacturer of 
a vehicle in a variety of circumstances. For example, there are two 
manufacturers if one entity produces an incomplete vehicle \2\ and 
another entity then modifies the incomplete vehicle so as to produce a 
completed vehicle.\3\ 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.
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    \2\ 49 CFR 567.3.
    \3\ Id.
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    For an exemption petition to be granted on the basis that 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 the vehicle, the petition must include specified 
information set forth at 49 CFR 555.6(c). The main requirements of that 
section include: (1) Substantiation that the vehicle is a low-emission 
vehicle; (2) documentation establishing that a temporary exemption 
would not unreasonably degrade the safety of a vehicle; (3) 
substantiation that a temporary exemption would facilitate the 
development or field evaluation of the vehicle; (4) a statement of 
whether the petitioner intends to conform to the standard at the end of 
the exemption period; and (5) a statement that not more than 2,500 
exempted vehicles will be sold in the United States in any 12-month 
period for which an exemption may be granted.

II. Electronic Stability Control Systems Requirement

    In April 2007, NHTSA published a final rule requiring that vehicles 
with a gross vehicle weight rating of 4,536 kilograms (kg) (10,000 
pounds) or less be equipped with electronic stability control (ESC) 
systems. ESC systems use automatic computer-controlled braking of 
individual wheels to assist the driver in maintaining control in 
critical driving situations in which the vehicle is beginning to lose 
directional stability at the rear wheels (spin out) or directional 
control at the front wheels (plow out). An anti-lock brake system (ABS) 
is a prerequisite for an ESC system because ESC uses many of the same 
components as ABS. Thus, the cost of complying with FMVSS No. 126 is 
less for vehicle models already equipped with ABS.
    Preventing single-vehicle loss-of-control crashes is the most 
effective way to reduce deaths resulting from rollover crashes. This is 
because most loss-of-control crashes culminate in the vehicle leaving 
the roadway, which dramatically increases the probability of a 
rollover. NHTSA's crash data study of existing vehicles equipped with 
ESC demonstrated that these systems reduce fatal single-vehicle crashes 
of passenger cars by 36 percent and fatal single-vehicle crashes of 
sport utility vehicles (SUVs) by 63 percent.\4\ NHTSA estimates that 
ESC has the potential to prevent 70 percent of the fatal passenger car 
rollovers and 88 percent of the fatal SUV rollovers that would 
otherwise occur in single-vehicle crashes.\5\
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    \4\ Dang, J., Statistical Analysis of the Effectiveness of 
Electronic Stability Control (ESC) Systems--Final Report, DOT HS 810 
794, U.S. Department of Transportation, Washington, DC (July 2007). 
Available at Docket No. NHTSA-2007-28629, item 2.
    \5\ Id.
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    The ESC requirement becomes effective for substantially all 
vehicles on September 1, 2011.

III. Overview of Petition

    In accordance with 49 U.S.C. 30113 and the procedures in 49 CFR 
part 555, Tesla Motors, Inc. (Tesla) submitted a petition dated June 7, 
2001 asking the agency for a temporary exemption from the electronic 
stability control requirements of FMVSS No. 126. The bases for the 
application are, first, that the exemption would make the development 
or field evaluation of a low-emission vehicle easier and would not 
unreasonably lower the safety level of that vehicle and, second, that 
compliance would cause substantial economic hardship to a petitioner 
that has tried in good faith to comply with the standard. Tesla has 
requested an exemption for the Roadster model for a period from 
September 1, 2011 to December 31, 2011.
    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 
began production of the all-electric Roadster in 2008 plans to conclude 
production for the United States market by December 31, 2011.
    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 sold or leased 276 Roadsters in the United States during 2010 
and 62 Roadsters during the first quarter of 2011. Tesla's worldwide 
production for 2011 is planned to be fewer than 1,000 vehicles. Tesla 
contends that its relationship with Lotus does not involve any time of 
ownership, sponsorship, or any other type of control. However, Tesla 
also observes that the combined production of Lotus and Tesla was less 
than 10,000 vehicles for 2009 and 2010.
    Tesla believes that granting the petition will support development 
and evaluation of a highway-capable electric vehicle. Tesla states that 
the development and sale of the Roadster model has allowed them to 
develop their next all-electric vehicle, the Model S. Tesla states 
that, with the permission of vehicle owners, it has used data from 
computers installed in on-road Roadsters related to charging condition 
and vehicle performance to determine how best to optimize its battery 
design and vehicle software for future vehicle offerings such as the 
Model S. Tesla believes that allowing the sale of additional Roadsters 
will continue to add to its database of information for its future 
vehicle offerings. Tesla states that it cannot replicate this data in 
laboratory or other environmental conditions.
    Tesla believes that safety will not be unduly compromised if the 
exemption is granted. In support of this assertion, Tesla cites its 
inclusion of a traction control system (TCS) on its vehicles. Tesla's 
TCS is comprised of software, wheel speed sensors, and the drive system 
electronic control unit (ECU). Tesla states that its TCS has many 
elements of an ESC system required by FMVSS No. 126. Tesla claims that 
the TCS system is able to detect slip in the drive wheels through the 
vehicle's ECU and that the vehicle will limit drive power until wheel 
spin is controlled. However, Tesla notes that the TCS system does not 
have the capability to independently monitor or adjust steering inputs 
to prevent oversteer or understeer, nor is it capable of applying 
brakes independent of driver input, both of which are required by FMVSS 
No. 126.

[[Page 47641]]

    Further, Tesla believes that the lack of ESC systems on the 
Roadster will not unduly compromise safety based on the intended use of 
the Roadster. The Roadster is a low, two-seat sport coupe. Tesla 
believes that, while the Roadster is capable of handling slippery roads 
due to ice and snow, most owners either do not use their Roadsters 
during winter months or sharply limit their use.
    Tesla also contends that the failure to obtain the exemption would 
result in substantial economic hardship. Tesla states that it has 
incurred cumulative net losses of $464 million since inception and 
nearly $50 million in the first three months of 2011. Tesla states that 
the loss of the ability to sell the Roadster in the United States could 
adversely impact its compliance with financial covenants with the U.S. 
Department of Energy, potentially depriving it of a source of capital. 
Further, because the Roadster is the only vehicle Tesla offers for sale 
in the United States, Tesla contends that the cancellation of the 
program would result in a significant loss of market for Tesla.
    Tesla states that it spent between $2 million and $3 million 
developing an ESC system for the Model S. Tesla does not have a precise 
cost to equip the Roadster with an ESC system, but applying the per 
vehicle cost of its Model S to the Roadster, it would cost as much as 
$30,000 per vehicle to equip ESC systems onto Roadsters planned to be 
sold under the exemption.
    Tesla notes that its chassis is based upon the Lotus Elise, which 
is equipped with ABS, but not an ESC system. Because Lotus is ending 
production of the Elise for the United States market by August 2011, 
Lotus will not invest in redesigns or additions to existing vehicle 
systems, including changes to comply with the ESC system requirements. 
Tesla states that, given the small number of Roadsters planned for 
production during the exemption period and the short time frame 
available to Tesla, it is technologically and economically infeasible 
to develop an ESC system for the Roadster.
    Tesla contends that it has exerted good faith efforts to achieve 
compliance with FMVSS No. 126. Tesla has developed an ESC system for 
the upcoming Model S, which is scheduled to be introduced in the United 
States in 2012. Tesla also states that it has included a number of 
features not mandated by the FMVSSs, including the TCS system discussed 
earlier. Tesla notes that it had intended on ending Roadster production 
prior to September 1, 2011 and, thus, would not have been required to 
equip its vehicles with ESC systems. Thus, Tesla did not focus 
development activities on meeting the requirements of FMVSS No. 126. 
However, due to a shift in production priorities at Lotus, Tesla was 
informed that an additional quantity of Roadster gliders could be 
produced in 2011.
    Tesla also believes that the exemption is in the public interest. 
Tesla states that, without the exemption, it may be required to lay off 
a significant number of employees. Further, Tesla notes that denying 
this petition would result in fewer electric vehicles for sale in the 
United States. Finally, Tesla believes that continuing to sell a long 
range, highway-capable, battery-powered electric vehicle in the United 
States will lead to more electric vehicles entering the fleet.

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 a 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: August 2, 2011.
Christopher J. Bonanti,
Associate Administrator for Rulemaking.
[FR Doc. 2011-19914 Filed 8-4-11; 8:45 am]
BILLING CODE 4910-59-P