[Federal Register Volume 86, Number 70 (Wednesday, April 14, 2021)]
[Notices]
[Pages 19690-19692]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-07570]


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DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration


Petitions for Exemption From the Federal Motor Vehicle Theft 
Prevention Standard; Volkswagen Group of America, Inc.

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

ACTION: Grant of petition for exemption.

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SUMMARY: This document grants in full the Volkswagen Group of America, 
Inc.'s (Volkswagen) petition for exemption from the Federal Motor 
Vehicle Theft Prevention Standard (theft prevention standard) for its 
Taos vehicle line beginning in model year (MY) 2022.

DATES: The exemption granted by this notice is effective beginning with 
the 2022 model year.

FOR FURTHER INFORMATION CONTACT: Carlita Ballard, Office of 
International Policy, Fuel Economy, and Consumer Programs, NHTSA, West 
Building, W43-439, NRM-310, 1200 New Jersey Avenue SE, Washington, DC 
20590. Ms. Ballard's phone number is (202) 366-5222. Her fax number is 
(202) 493-2990.

SUPPLEMENTARY INFORMATION: Under 49 U.S.C. Chapter 331, the Secretary 
of Transportation (and the National Highway Traffic Safety 
Administration (NHTSA) by delegation) is required to promulgate a theft 
prevention standard to provide for the identification of certain motor 
vehicles and their major replacement parts to impede motor vehicle 
theft. NHTSA promulgated regulations at part 541 (theft prevention 
standard) to require parts-marking for specified passenger motor 
vehicles and light trucks. Pursuant to 49 U.S.C. 33106, manufacturers 
that are subject to the parts-marking requirements may petition the 
Secretary of Transportation for an exemption for a line of passenger 
motor vehicles equipped as standard equipment with an antitheft device 
that the Secretary decides is likely to be as effective in reducing and 
deterring motor vehicle theft as compliance with the parts-marking 
requirements. In accordance with this statute, NHTSA promulgated 49 CFR 
part 543, which establishes the process through which manufacturers may 
seek an exemption from the theft prevention standard.
    49 CFR 543.5 provides general submission requirements for petitions 
and states that each manufacturer may petition NHTSA for an exemption 
of one vehicle line per model year. Among other requirements, 
manufacturers must identify whether the exemption is sought under 
section 543.6 or section 543.7. Under section 543.6, a manufacturer may 
request an exemption by providing specific information about the 
antitheft device, its capabilities, and the reasons the petitioner 
believes the device to be as effective at reducing and deterring theft 
as compliance with the parts-marking requirements. Section 543.7 
permits a manufacturer to request an exemption under a more streamlined 
process if the vehicle line is equipped with an antitheft device (an 
``immobilizer'') as standard equipment that complies with one of the 
standards specified in that section.
    Section 543.8 establishes requirements for processing petitions for 
exemption from the theft prevention standard. As stated in section 
543.8(a), NHTSA processes any complete exemption petition. If NHTSA 
receives an incomplete petition, NHTSA will notify the petitioner of 
the deficiencies. Once NHTSA receives a complete petition it will 
process it and, in accordance with section 543.8(b), will grant the 
petition 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.
    Section 543.8(c) requires NHTSA to issue its decision either to 
grant or to deny an exemption petition not later than 120 days after 
the date on which a complete petition is filed. If NHTSA does not make 
a decision within the 120-day period, the petition shall be deemed to 
be approved and the manufacturer shall be exempt from the standard for 
the line covered by the petition for the subsequent model year.\1\ 
Exemptions granted under part 543 apply only to the vehicle line or 
lines that are subject to the grant and that are equipped with the 
antitheft device on which the line's exemption was based, and are 
effective for the model year beginning after the model year in which 
NHTSA issues the notice of exemption, unless the notice of exemption 
specifies a later year.
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    \1\ 49 U.S.C. 33106(d).
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    Sections 543.8(f) and (g) apply to the manner in which NHTSA's 
decisions on petitions are to be made known. Under section 543.8(f), if 
the petition is sought under section 543.6, NHTSA publishes a notice of 
its decision to grant or deny the exemption petition in the Federal 
Register and notifies the petitioner in writing. Under section 
543.8(g), if the petition is sought under section 543.7, NHTSA notifies 
the petitioner in writing

[[Page 19691]]

of the agency's decision to grant or deny the exemption petition.
    This grant of petition for exemption considers Volkswagen Group of 
America, Inc.'s (Volkswagen) petition for its Taos vehicle line 
beginning in MY 2022. Volkswagen's petition is granted under 49 U.S.C. 
33106 and 49 CFR 543.8(c), which state that if the Secretary of 
Transportation (NHTSA, by delegation) does not make a decision about a 
petition within 120 days of the petition submission, the petition shall 
be deemed to be approved and the manufacturer shall be exempt from the 
standard for the line covered by the petition for the subsequent model 
year. Separately, based on the information provided in Volkswagen's 
petition, NHTSA has determined that the antitheft device to be placed 
on its vehicle 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 theft prevention standard.

I. Specific Petition Content Requirements Under 49 CFR 543.6

    Pursuant to 49 CFR part 543, Exemption from Vehicle Theft 
Prevention, Volkswagen petitioned for an exemption for its specified 
vehicle line from the parts-marking requirements of the theft 
prevention standard, beginning in MY 2022. Volkswagen petitioned under 
49 CFR 543.6, Petition: Specific content requirements, which, as 
described above, requires manufacturers to provide specific information 
about the antitheft device installed as standard equipment on all 
vehicles in the line for which an exemption is sought, the antitheft 
device's capabilities, and the reasons the petitioner believes the 
device to be as effective at reducing and deterring theft as compliance 
with the parts-marking requirements.
    More specifically, section 543.6(a)(1) requires petitions to 
include a statement that an antitheft device will be installed as 
standard equipment on all vehicles in the line for which the exemption 
is sought. Under section 543.6(a)(2), each petition must list each 
component in the antitheft system, and a diagram showing the location 
of each of those components within the vehicle. As required by section 
543.6(a)(3), each petition must include an explanation of the means and 
process by which the device is activated and functions, including any 
aspect of the device designed to: (1) Facilitate or encourage its 
activation by motorists; (2) attract attention to the efforts of an 
unauthorized person to enter or move a vehicle by means other than a 
key; (3) prevent defeating or circumventing the device by an 
unauthorized person attempting to enter a vehicle by means other than a 
key; (4) prevent the operation of a vehicle which an unauthorized 
person has entered using means other than a key; and (5) ensure the 
reliability and durability of the device.\2\
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    \2\ 49 CFR 543.6(a)(3).
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    In addition to providing information about the antitheft device and 
its functionality, petitioners must also submit the reasons for the 
petitioner's belief that the antitheft device will be effective in 
reducing and deterring motor vehicle theft, including any theft data 
and other data that are available to the petitioner and form a basis 
for that belief,\3\ and the reasons for the petitioner's belief that 
the agency should determine that the antitheft device is likely to be 
as effective as compliance with the parts-marking requirements of part 
541 in reducing and deterring motor vehicle theft, including any 
statistical data that are available to the petitioner and form the 
basis for the petitioner's belief that a line of passenger motor 
vehicles equipped with the antitheft device is likely to have a theft 
rate equal to or less than that of passenger motor vehicles of the 
same, or a similar, line which have parts marked in compliance with 
part 541.\4\
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    \3\ 49 CFR 543.6(a)(4).
    \4\ 49 CFR 543.6(a)(5).
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    The following sections describe Volkswagen's petition information 
provided pursuant to 49 CFR part 543, Exemption from Vehicle Theft 
Prevention. To the extent that specific information in Volkswagen's 
petition is subject to a properly filed confidentiality request, that 
information was not disclosed as part of this notice. See 49 CFR 
512.20(a).
    In a petition dated May 29, 2020, Volkswagen requested an exemption 
from the parts-marking requirements of the theft prevention standard 
for its Taos vehicle line beginning with MY 2022. Pursuant to section 
543.6(a)(1), Volkswagen stated that the antitheft device described in 
its petition will be installed as standard equipment its Taos vehicles 
starting with MY 2022.\5\
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    \5\ Volkswagen also stated that it will offer an audible and 
visible alarm as optional equipment on its Taos vehicle line. Per 49 
U.S.C. 33106 (b), manufacturers may petition NHTSA for an exemption 
``for a line of passenger motor vehicles equipped as standard 
equipment with an antitheft device that [NHTSA] decides is likely to 
be as effective in reducing and deterring motor vehicle theft as 
compliance with'' the theft prevention standard (emphasis added). 
Per 49 U.S.C. 33106(a)(2), ``standard equipment'' means equipment 
already installed in a motor vehicle when it is delivered from the 
manufacturer and not an accessory or other item that the first 
purchaser customarily has the option to have installed. Therefore, 
for purposes of Volkswagen's petition, NHTSA is only considering the 
device equipped on the vehicle as standard equipment.
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    In accordance with section 543.6(a)(2), Volkswagen provided a 
detailed description and diagram of the identity, design, and location 
of the components of the antitheft device for its Taos vehicle line. 
Volkswagen stated that its fifth generation transponder-based 
electronic engine immobilizer antitheft device will be installed as 
standard equipment on the entire MY 2022 Taos vehicle line. Key 
components of the antitheft device will include an adapted ignition key 
(ID-transmitter or ``key fob''), instrument cluster, gateway (cluster 
to CAN bus, only routing function) and an engine control unit.
    Volkswagen provided information on the reliability and durability 
of its proposed device as required by section 543.6(a)(3)(v). To ensure 
reliability and durability of the device, Volkswagen stated that the 
antitheft device has been tested for compliance with its corporate 
requirements, including those for electrical and electronic assemblies 
in motor vehicles related to performance requirements including 
electrical system temperature stability, mechanical integrity, 
electrical performance, electromagnetic compatibility (EMC), 
environmental compatibility and service life.
    Volkswagen stated that its immobilizer device actively incorporates 
the power control unit into the evaluation and monitoring process. 
Volkswagen also stated that activation of its immobilizer device occurs 
automatically after the engine is switched off. Deactivation of the 
immobilizer device occurs when the ignition is turned on or the key fob 
is recognized by the immobilizer control unit. Specifically, when 
turning on the ignition on/off switch, the key transponder sends a 
fixed code to the immobilizer control unit. If this is identified as 
the correct code, a variable code is generated in the immobilizer 
control unit and sent to the transponder. Volkswagen stated that a 
secret arithmetic process is then started according to a set of 
specific equations and that a new variable code is generated every time 
the immobilizer goes through the secret computing process. The results 
of the computing process are evaluated in the control unit and if 
verified, the vehicle key is acknowledged as correct. The engine 
control unit then sends a variable code to the immobilizer control unit 
for

[[Page 19692]]

mutual identification. If all the data matches, the vehicle can be 
started.
    In support of its belief that its antitheft device will be as 
effective as or more effective than the parts-marking requirement in 
reducing and deterring vehicle theft, and in accordance with 49 CFR 
543.6(a)(5), Volkswagen provided data on the theft rate of similarly-
sized vehicle lines that had been granted an exemption from the parts-
marking requirement. Volkswagen also referenced the effectiveness of 
immobilizer devices installed on other vehicles for which NHTSA has 
granted exemptions. Specifically, Volkswagen referenced information 
from the Highway Loss Data Institute which showed that BMW vehicles 
experienced theft loss reductions resulting in a 73% decrease in 
relative claim frequency and a 78% lower average loss payment per claim 
for vehicles equipped with an immobilizer. Volkswagen also stated that 
the National Crime Information Center's (NCIC) theft data showed that 
there was a 70% reduction in theft experienced when comparing the MY 
1987 Ford Mustang vehicle thefts (with immobilizers) to MY 1995 Ford 
Mustang vehicle thefts (without immobilizers).

III. Decision To Grant the Petition

    Pursuant to 49 U.S.C. 33106 and 49 CFR 543.8(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. As 
discussed above, in this case, Volkswagen's petition is granted under 
49 U.S.C. 33106(d). Separately, NHTSA finds that Volkswagen has 
provided adequate reasons for its belief that the antitheft device for 
its 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 the Volkswagen provided about its antitheft device. NHTSA 
believes, based on the supporting evidence submitted by Volkswagen, 
that the antitheft device described for its 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.
    The agency concludes that Volkswagen's antitheft device will 
provide the five types of performance features listed in section 
543.6(a)(3): promoting activation; attracting attention to the efforts 
of unauthorized persons to enter or operate 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.
    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 model year. 49 CFR 543.8(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 Volkswagen decides not to use the exemption for its requested 
vehicle line, the manufacturer must formally notify the agency. If such 
a decision is made, the line must be fully marked as required by 49 CFR 
541.5 and 541.6 (marking of major component parts and replacement 
parts).
    NHTSA notes that if Volkswagen 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 543.8(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, section 543.10(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 the exemption.''
    The agency wishes to minimize the administrative burden that 
section 543.10(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 
Volkswagen 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.
    For the foregoing reasons, the agency hereby grants in full 
Volkswagen's petition for exemption for the Taos vehicle line from the 
parts-marking requirements of 49 CFR part 541, beginning with its MY 
2022 vehicles.
    Issued under authority delegated in 49 CFR 1.95 and 501.8.

Raymond R. Posten,
Associate Administrator for Rulemaking.
[FR Doc. 2021-07570 Filed 4-13-21; 8:45 am]
BILLING CODE 4910-59-P