[Federal Register Volume 82, Number 90 (Thursday, May 11, 2017)]
[Notices]
[Pages 22056-22058]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-09516]


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DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration


Petition for Exemption From the Federal Motor Vehicle Motor Theft 
Prevention Standard; Tesla

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

ACTION: Grant of petition for exemption.

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SUMMARY: This document grants in full the petition of Tesla Motors 
Inc's., (Tesla) petition for an exemption of the Model 3 vehicle line 
in accordance with the Exemption from Vehicle Theft Prevention 
Standard. This petition is granted because the agency has determined 
that the antitheft device to be placed on the line as standard 
equipment is likely to be as effective in reducing and deterring motor 
vehicle theft as compliance with the parts-marking requirements of the 
Federal Motor Vehicle Theft Prevention Standard (Theft Prevention 
Standard). Tesla also requested confidential treatment for specific 
information in its petition. While official notification on granting or 
denying Tesla's request for confidential treatment will be addressed by 
separate letter, no confidential information provided for purposes of 
this document has been disclosed.

DATES: The exemption granted by this notice is effective beginning with 
the 2017 model year (MY).

FOR FURTHER INFORMATION CONTACT: Mr. Hisham Mohamed, Office of 
International Policy, Fuel Economy and Consumer Standards, NHTSA, W43-
437, 1200 New Jersey Avenue SE., Washington, DC 20590. Mr. Mohamed's 
phone number is (202) 366-0307. His fax number is (202) 493-2990.

SUPPLEMENTARY INFORMATION: In a petition dated September 16, 2016, 
Tesla requested an exemption from the parts-marking requirements of the 
Theft Prevention Standard for the Model 3 vehicle line beginning with 
MY 2017. The petition requested an exemption from parts-marking 
pursuant to 49 CFR part 543, Exemption from Vehicle Theft Prevention 
Standard, based on the installation of an antitheft device as standard 
equipment for the entire vehicle line.

[[Page 22057]]

    Under 49 CFR 543.5(a), a manufacturer may petition NHTSA to grant 
an exemption for one vehicle line per model year. In its petition, 
Tesla provided a detailed description and diagram of the identity, 
design, and location of the components of the antitheft device for the 
Model 3 vehicle line. Tesla proposes to install a passive, transponder-
based, electronic engine immobilizer device as standard equipment on 
its Model 3 vehicle line beginning with its MY 2017 vehicles. Key 
components of the antitheft device include an engine immobilizer, 
central body controller, security controller, gateway function, drive 
inverters and a passive entry transponder (PET). Tesla also stated that 
the antitheft device is an upgraded version of the successful antitheft 
device currently installed as standard equipment on all Tesla Model S/X 
vehicles, and served as the basis for NHTSA's earlier granting of an 
exemption for that vehicle line. Tesla also noted that improvements to 
the existing antitheft device include a new coded exchange between the 
drive inverters and central body controller and, enhanced security 
communication between its components. Tesla further stated that its 
antitheft device will be installed with an audible alarm system as 
standard equipment on the entire line. Tesla stated that forced entry 
into the vehicle or any type of unauthorized entry without the correct 
PET will trigger an audible alarm. Tesla further stated that in 
addition to an unauthorized access through the doors, the alarm will 
also trigger when a break-in is attempted through both the front and 
rear cargo areas.
    Tesla explained that its antitheft device will have a two-step 
activation process with a vehicle code query conducted at each stage. 
The first stage allows access to the vehicle when an authorization 
cycle occurs between the PET and the Security Controller, as long as 
the PET is in close proximity to the car and the driver either pushes 
the lock/unlock button on the key fob, pushes the exterior door handle 
to activate the handle sensors or inserts a hand into the handle to 
trigger the latch release. During the second stage, vehicle operation 
will be enabled when the driver sits in the driver's seat and has 
depressed the brake pedal. The driver can then move the gear selection 
stalk to drive or reverse. When one of these actions is performed, the 
security controller will poll to verify if the appropriate PET is 
inside the vehicle. Upon location of the PET, the security controller 
will run an authentication cycle with the key confirming the correct 
PET is being used inside the vehicle. Tesla stated that once 
authentication is successful, the security controller initiates a coded 
message through the gateway. If the code exchange matches the code 
stored in the drive inverters, the exchange will authorize the drive 
inverter to deactivate immobilization and allow the vehicle to be 
driven under its own power. Tesla stated that the immobilizer is active 
when the vehicle is turned off and the doors are locked. Any attempt to 
operate the vehicle without performing and completing each task will 
render the vehicle inoperable. Additionally, Tesla has incorporated an 
additional security measure to protect its Model 3 vehicle line. Tesla 
stated that when there are no user inputs to the vehicle within a 
programmed period of time, immobilization of the antitheft device will 
be reactivated, even if the car is unlocked or has the antitheft device 
has already been deactivated.
    Tesla's submission is considered a complete petition as required by 
49 CFR 543.7 in that it meets the general requirements contained in 
Sec.  543.5 and the specific content requirements of Sec.  543.6.
    In addressing the specific content requirements of Sec.  543.6, 
Tesla provided information on the reliability and durability of its 
proposed device. Tesla stated that all components of its antitheft 
device are contained inside the vehicle's passenger compartment in 
locations not readily accessible, or are contained within other vehicle 
components. Tesla stated that this will protect the antitheft device 
from exposure to the elements as well as significantly limit 
accessibility to those components by unauthorized personnel. 
Additionally, Tesla stated that it expects the components of the 
antitheft device to be reliable because the antitheft device relies on 
electronic functions and not mechanical functions. Tesla also provided 
the agency with a reliability engineering test report. Tesla believes 
the report provides sufficient reliability and durability information 
as required by 49 CFR 543.6(a)(1)(v). Tesla stated that the reliability 
and durability testing completed on its Tesla Model 3 Security 
Controller PCBA has shown to meet the requirements based on Tesla 
Reliability Testing and Validation Specification and the Model 3 
product launch reliability targets.
    Tesla stated that the Model 3 antitheft device will be similar to 
the version designed to deter theft of its Model S and X vehicles. It 
noted that similar to the Model S and X vehicle lines, its antitheft 
device requires coded communication between the security controller and 
drive inverters. Tesla further stated that even gaining access to the 
12V power supply to the Security Controller or Gateway will not allow a 
thief to bypass the system because only inputs from a correct code can 
deactivate the system and allow the vehicle to function. Tesla also 
stated that it expects the Model 3 vehicle line to achieve very, low 
theft rates with the installation of its antitheft immobilizer device. 
Tesla further stated it believes that having a powerful antitheft 
device, with electronic locks and an alarm system installed on its 
Model 3 vehicle line strongly indicates that its Model 3 vehicle line 
will have significantly lower theft rates than comparable vehicles that 
have only been parts marked in accordance with 49 CFR part 541.
    Comparatively, Tesla stated that the antitheft device proposed for 
its Model 3 vehicle line is similar to other antitheft devices which 
NHTSA has already determined to be as effective in reducing and 
deterring motor vehicle theft as the parts marking requirements (i.e., 
the Tesla Model S and X vehicle lines). Specifically, the agency's data 
show that using an average of 3 MY's (final 2012-2013 and preliminary 
2014) theft rate data, the average theft rate for the Tesla Model S 
vehicle line is (0.1123), which is well below the median theft rate of 
3.5826. There is no theft rate data available for the Model X vehicle 
line because it is a newly introduced vehicle.
    Based on the evidence submitted by Tesla, the agency believes that 
the antitheft device for the Model 3 vehicle line is likely to be as 
effective in reducing and deterring motor vehicle theft as compliance 
with the parts-marking requirements of the Theft Prevention Standard 
(49 CFR 541).
    Pursuant to 49 U.S.C. 33106 and 49 CFR 543.7(b), the agency grants 
a petition for exemption from the parts-marking requirements of part 
541, either in whole or in part, if it determines that, based upon 
substantial evidence, the standard equipment antitheft device is likely 
to be as effective in reducing and deterring motor vehicle theft as 
compliance with the parts-marking requirements of part 541. The agency 
finds that Tesla has provided adequate reasons for its belief that the 
antitheft device for the Model 3 vehicle line is likely to be as 
effective in reducing and deterring motor vehicle theft as compliance 
with the parts-marking requirements of the Theft Prevention Standard. 
This conclusion is based on the information Tesla provided about its 
device.

[[Page 22058]]

    The agency concludes that the device will provide the five types of 
performance listed in Sec.  543.6(a)(3): Promoting activation; attract 
attention to the efforts of an unauthorized person to enter or move a 
vehicle by means other than a key; preventing defeat or circumvention 
of the device by unauthorized persons; preventing operation of the 
vehicle by unauthorized entrants; and ensuring the reliability and 
durability of the device.
    For the foregoing reasons, the agency hereby grants in full Tesla's 
petition for exemption for the Model 3 vehicle line from the parts-
marking requirements of 49 CFR part 541, beginning with the 2017 model 
year vehicles. The agency notes that 49 CFR part 541, Appendix A-1, 
identifies those lines that are exempted from the Theft Prevention 
Standard for a given MY. 49 CFR 543.7(f) contains publication 
requirements incident to the disposition of all part 543 petitions. 
Advanced listing, including the release of future product nameplates, 
the beginning model year for which the petition is granted and a 
general description of the antitheft device is necessary in order to 
notify law enforcement agencies of new vehicle lines exempted from the 
parts marking requirements of the Theft Prevention Standard.
    If Tesla decides not to use the exemption for this line, it should 
formally notify the agency. If such a decision is made, the line must 
be fully marked according to the requirements under 49 CFR 541.5 and 
541.6 (marking of major component parts and replacement parts).
    NHTSA notes that if Tesla wishes in the future to modify the device 
on which this exemption is based, the company may have to submit a 
petition to modify the exemption. Section 543.7(d) states that a part 
543 exemption applies only to vehicles that belong to a line exempted 
under this part and equipped with the antitheft device on which the 
line's exemption is based. Further, Sec.  543.9(c)(2) provides for the 
submission of petitions ``to modify an exemption to permit the use of 
an antitheft device similar to, but differing from the one specified in 
that exemption.''
    The agency wishes to minimize the administrative burden that Sec.  
543.9(c)(2) could place on exempted vehicle manufacturers and itself. 
The agency did not intend in drafting part 543 to require the 
submission of a modification petition for every change to the 
components or design of an antitheft device. The significance of many 
such changes could be de minimis. Therefore, NHTSA suggests that if the 
manufacturer contemplates making any changes, the effects of which 
might be characterized as de minimis, it should consult the agency 
before preparing and submitting a petition to modify.

    Authority: 49 CFR 1.95.

Raymond R. Posten,
Associate Administrator for Rulemaking.
[FR Doc. 2017-09516 Filed 5-10-17; 8:45 am]
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