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ZAP Sues DaimlerChrylser Over Smart Car

ZAP's complaint, filed on October 28, 2005 in the Los Angeles Superior Court, details a series of anti-competitive tactics, aimed at defaming ZAP and disrupting its third-party business relationships.

Published: 02-Nov-2005

SANTA ROSA, Calif.--Nov. 1, 2005--Transportation pioneer ZAP (PCX:ZP) announced today that the Company will be proceeding with legal action against DaimlerChrysler (NYSE:DCX) and affiliated companies and individuals, serving a complaint that seeks in excess of $500 million in redress for a more than year-long campaign of misconduct perpetrated against ZAP by Daimler and Ulrich Walker, the then-CEO of its subsidiary Smart gmbh.

ZAP's complaint, filed on October 28, 2005 in the Los Angeles Superior Court, details a series of anti-competitive tactics, aimed at defaming ZAP and disrupting its third-party business relationships.

As alleged in the complaint, rather than share or promote ZAP's success in converting and marketing Daimler's high fuel-efficiency "Smart Car" in the U.S., Daimler sought to destroy ZAP; to capture its market share; and to discredit ZAP in the eyes of investors, regulators, journalists, suppliers, buyers, other third-parties, and the American public generally. As further alleged in the complaint, Daimler's misconduct was undertaken with the intention of stealing and profiting from ZAP's marketing plans, technologies, business relationships and know how.

ZAP's counsel, Eric M. George of Browne Woods & George LLP, based in Beverly Hills, California, stated:

"Not only has Daimler trampled on the rights of its progressive competitor, it has done so without conscience. Daimler's misconduct has made the American public the loser. With oil prices at an all-time high, and growing consciousness in the country about alternative-fuel transportation, America is ready to seize on the historic opportunities that ZAP is making available to the public."

ZAP anticipates proceeding to trial in this matter before the close of the year 2006.

About ZAP

ZAP, Zero Air Pollution(R), has been a leader in advanced transportation technologies since 1994, delivering over 90,000 vehicles to consumers in more than 75 countries. ZAP has a 10-year license with eight and a half years remaining on the technology developed by Smart-Automobile LLC to Americanize the popular European-made SMART Car for the U.S. marketplace. ZAP "Americanizes" the SMART Car to meet U.S. federal and state safety and emissions standards through registered importers. ZAP currently complies with regulatory requirements in all states except California and four other states. ZAP is not affiliated with, or authorized by, smart gmbh, the manufacturer of SMART automobiles, or the smartUSA division of Mercedes-Benz LLC, the exclusive authorized U.S. importer and distributor of those vehicles. ZAP purchases its vehicles from non-affiliated direct importer Smart-Automobile LLC. For more information, visit http://www.zapworld.com.

Cautionary Statement

This press release contains forward-looking statements. Investors are cautioned that such forward-looking statements involve risks and uncertainties, including, without limitation, continued acceptance of the Company's products, increased levels of competition for the Company, new products and technological changes, the Company's dependence on third-party suppliers, intellectual property rights, and other risks detailed from time to time in the Company's periodic reports filed with the Securities and Exchange Commission.

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