[Federal Register Volume 89, Number 30 (Tuesday, February 13, 2024)]
[Notices]
[Pages 10149-10152]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-02865]


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DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration


Petition 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 
ID.7 vehicle line beginning in model year (MY) 2025. The 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 theft prevention standard. 
Volkswagen

[[Page 10150]]

also requested confidential treatment for specific information in its 
petition. Therefore, no confidential information provided for purposes 
of this notice has been disclosed.

DATES: The exemption granted by this notice is effective beginning with 
the 2025 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 49 CFR 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 with an antitheft device as standard 
equipment 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.\1\
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    \1\ 49 CFR 543.7 specifies that the manufacturer must include a 
statement that their entire vehicle line is equipped with an 
immobilizer that meets one of the following standards:
    (1) The performance criteria (subsections 8 through 21) of 
C.R.C, c. 1038.114, Theft Protection and Rollaway Prevention (in 
effect March 30, 2011), as excerpted in appendix A of [part 543];
    (2) National Standard of Canada CAN/ULC-S338-98, Automobile 
Theft Deterrent Equipment and Systems: Electronic Immobilization 
(May 1998);
    (3) United Nations Economic Commission for Europe (UN/ECE) 
Regulation No. 97 (ECE R97), Uniform Provisions Concerning Approval 
of Vehicle Alarm System (VAS) and Motor Vehicles with Regard to 
Their Alarm System (AS) in effect August 8, 2007; or
    (4) UN/ECE Regulation No. 116 (ECE R116), Uniform Technical 
Prescriptions Concerning the Protection of Motor Vehicles Against 
Unauthorized Use in effect on February 10, 2009.
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    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 the Agency 
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.\2\ 
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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    \2\ 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 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 ID.7 vehicle line 
beginning in MY 2025.

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 2025. 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 include 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.\3\
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    \3\ 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 their 
belief that the antitheft device will be effective in

[[Page 10151]]

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,\4\ and the reasons for their 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. In support of this belief, 
the petitioners should include 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.\5\
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    \4\ 49 CFR 543.6(a)(4).
    \5\ 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.\6\
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    \6\ 49 CFR 512.20(a).
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II. Volkswagen's Petition for Exemption

    In a petition dated May 15, 2025, Volkswagen requested an exemption 
from the parts-marking requirements of the theft prevention standard 
for its ID.7 vehicle line beginning with MY 2025.
    In its petition, Volkswagen provided a detailed description and 
diagram of the identity, design, and location of the components of the 
antitheft device for its ID.7 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 2025 ID.7 vehicle line. Volkswagen also stated that its ID.7 is an 
electric vehicle that will be equipped with a RWD or an AWD 
transmission. Key components of the antitheft device will include an 
adapted ignition key (ID-transmitter or ``key fob''), In Car 
Application Server 1 (ICAS1) with integrated gateway (cluster to CAN 
bus, only routing function) and a Power Control Unit (LSG1) in case of 
4 motion (all wheel drive) (LSG1 and LSG2). Ford stated that an audible 
and visual alarm will be offered as optional equipment.
    Pursuant to Section 543.6(a)(3), Volkswagen explained 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 mutual identification. If all 
the data matches, the vehicle can be started.
    As required in section 543.6(a)(3)(v), Volkswagen provided 
information on the reliability and durability of its proposed device. 
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.
    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. The Agency 
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 four of the five types of performance features listed in 
section 543.6(a)(3): promoting activation; 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

[[Page 10152]]

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 ID.7 vehicle line from the 
parts-marking requirements of 49 CFR part 541, beginning with its MY 
2025 vehicles.
    Issued under authority delegated in 49 CFR 1.95 and 501.8.

Raymond R. Posten,
Associate Administrator for Rulemaking.
[FR Doc. 2024-02865 Filed 2-12-24; 8:45 am]
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