Americanization of First Smart Cars Underway by ZAP

SANTA ROSA, Calif., Jan. 24, 2005 -- Automobile manufacturer ZAP (BULLETIN BOARD: ZAPZ) announced today that the first Smart Cars, one of the most fuel-efficient cars in the world, are in the process of being modified to federal automotive standards at a facility in California.

The Smart Car Americanized by ZAP, as it is called, recently received federal approval of the modifications that need to be made to the European micro-car. Federal approvals allow the conversion of the car to begin at a manufacturing facility in California as well as for sales to begin in 45 states. The Smart Car still needs to undergo testing for California's emissions standards, which also cover New York, Massachusetts, Vermont, and Maine. The car is receiving modifications to meet U.S. Department of Transportation and Environmental Protection Agency standards, including improvements to the structural design, lighting, as well as diagnostic and fueling systems.

The opportunity to sell the Smart Car is a leap forward for the small, public company based in Northern California, which is gearing up for the possibility to sell thousands of cars per year. CEO Steve Schneider is expecting the first of the cars to be completed soon and says ZAP is working on finalizing its marketing, distribution and service program for the car, including working with its dealers to buy 100-unit blocks of the car to speed up supply.

"The way things are shaping up with the Smart car, it looks like small is the next big thing!" said Schneider. "Demand for the Smart Car in the U.S. is reaching a fever pitch and we are working as quickly as we can to make these cars available in large numbers. ZAP has invested a great deal of effort to bring this car to the U.S. and we are as excited as everyone about the imminent arrival, but we must thank all our customers and dealers for their patience as we work to legalize the cars and establish a distribution program that provides adequate supply, parts and service."

Schneider says the fuel-efficiency and the style of the Smart Car have become legendary here in the U.S. as travelers abroad have brought back stories about falling in love with the car in Europe. Nearly 9000 people have registered their purchase interest in the cars and more than 1000 auto dealers have inquired about ZAP's business plan to establish a dealer network for fuel-efficient and advanced automotive technologies. ZAP is evaluating a situation where it may not have enough cars to satisfy initial demand.

The fuel-efficient Smart Car accelerates ZAP's Business Plan to manufacture and distribute automobiles utilizing advanced fuel technologies. ZAP recently announced a joint venture in China that is near completion on its first manufacturing facility that will work in the development of ZAP CARS(R) powered by a variety of advanced fuels, including cars that run on gasoline, electricity, hydrogen and other technologies, which it can introduce to sell alongside the Smart car as well as other cars that it expects to introduce over time. ZAP is also a manufacturer and distributor of personal transportation vehicles, including scooters, bicycles and other motorized vehicles. ZAP is also involved in the research and development of advanced battery technologies for electric vehicles and has established an energy division to market and distribute portable batteries that utilize this technology.

About ZAP

ZAP has been a world leader in cleaner transportation technologies since 1994, delivering its award-winning ZAP vehicles and energy products to customers in more than 60 countries. A public company, ZAP is traded on the Over-the-Counter stock exchange under the symbol ZAPZ. The company offers a variety of advanced technologies and vehicles, including cars, bicycles, scooters, motorbikes, underwater scooters and more. For more information, visit http://www.zapworld.com/ or call 707-525-8658. 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-Auto LLC.