Uruguay Sets Aside Land for ZAP Electric Vehicle Plant

ZAP plans to break ground by next month to assembly of light electric vehicles, including the Xebra, the ZAPPY3 scooter, and ZAP electric bicycles for distribution throughout South America.

Published: 25-Sep-2008

MONTEVIDEO, URUGUAY -- (Marketwire) -- 09/23/08 -- The government of Uruguay, in a move toexpand investment in new industries and technologies, has set aside land for an electric vehicle assembly plant expected to begin construction nextmonth by US electric car pioneer ZAP.

The State of Montevideo has granted an acre of land to ZAP within an industrial and technology park established for projects of nationalinterest through CAPIT (Comision Administradora del Parque Industrial yTecnologico del Cerro). According to Fernando Cancela, ZAP's Director ofInternational Affairs, ZAP plans to break ground by next month on acomprehensive facility for the assembly of light electric vehicles,including the Xebra brand, three-wheeled electric sedans and trucks, theZAPPY3 scooter, and ZAP electric bicycles for distribution throughout SouthAmerica.

"Recently, we met with the Mayor of Montevideo, Ricardo Ehrlich, whoinvited us to propose all that would be needed to ensure the success ofthis project," said Cancela, who is a citizen of Uruguay. "He said hewants this project to succeed to help the national economy and improve airquality."

Daniel Martinez, the Uruguayan Minister of Energy, announced the projectwith ZAP to the Uruguayan congress last week. He proposed furtherinvestments in electric vehicles as a way to create new industries that can restore the balance of trade with other countries in the region. WithBrazil, for example, Uruguay has a 10-1 trade deficit.

MERCOSUR is a trade agreement established in South America to promote freetrade and fluid movement of goods, people and currency. The regionrepresents a population of over 250 million in Argentina, Brazil, Paraguay,Uruguay, Bolivia, Chile, Colombia, Ecuador and Peru. MERCOSUR-certifiedproducts exported within the region enjoy little or no taxes.

Under the Uruguay agreement, ZAP plans to ship the parts to its newfacility for final assembly. According to Cancela, if more than 50 percentof the value of the product is added under the CAPIT program, products willbe certified as "Made in Uruguay" and have fewer taxes, if any, whenexported within MERCOSUR.

ZAP has been operating a marketing unit in Montevideo since 2002 to developassembly, marketing and distribution programs in Latin America. Last year,ZAP partnered with the Uruguayan Postal Service and Coca-Cola on a fleetdistribution model in Montevideo. In Chile, the national power company hasstarted a program to promote electric transportation by offering itsratepayers financing on ZAP electric bikes, scooters and motorcycles.

About ZAP

ZAP has been a leader in electric transportation since 1994, deliveringover 100,000 vehicles to consumers in more than 75 countries. Currently,ZAP manufactures a line of electric vehicles, including electric city-carsand trucks, motorcycles, scooters, bicycles, and ATVs. ZAP sells one of theonly electric city-cars and trucks in production today and is developing ahigh-performance electric vehicle called the ZAP Alias. The Companyrecently announced a strategic partnership with Dubai-based Al Yousuf Groupto expand its international vehicle distribution. For product, dealer andinvestor information, visit http://www.zapworld.com.

This press release contains forward-looking statements. Investors arecautioned that such forward-looking statements involve risks anduncertainties, including, without limitation, continued acceptance of theCompany's products, increased levels of competition for the Company, newproducts and technological changes, the Company's dependence uponthird-party suppliers, intellectual property rights, and other risksdetailed from time to time in the Company's periodic reports filed with theSecurities and Exchange Commission.

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