ZAP Acquires Smart Car Intellectual Property from Smart Automobile LLC

SANTA ROSA, CA - July 20, 2006: Automotive pioneer ZAP (NYSE Arca:ZP) announced today that it has reached an agreement to acquire all ownership interest from Smart Automobile LLC for the intellectual property that helped engineer the Smart Car Americanized for ZAP to meet U.S. Department of Transportation (DOT) compliance.

Previously ZAP had a license agreement with Smart Automobile and the new agreement reached takes the place of previous agreements granting ZAP full ownership in the DOT rights. ZAP acquires all intellectual property owned by Smart Automobile which makes the Smart Car DOT compliant, including all testing related to various crash and engineering, analyses, tests performed by Smart Automobile and those contracted out to third parties, as well as all physical assets, including molds, tooling and parts.

Smart-Automobiles LLC is an independent, privately-held company that oversees the direct importation and modification of automobiles to meet U.S. standards.

The Smart Car has received regulatory approvals through its registered importers to allow for distribution in the USA by ZAP. ZAP is now distributing the Smart Car, a fuel-efficient all-gas turbo car, in the USA through a new automotive dealer network specializing in advanced technology vehicles.

ZAP recently launched sales for a new electric car called the XEBRA and previously announced a partnership with Brazilian manufacturer OBVIO! for the manufacture and distribution of cars utilizing ethanol and other technologies for the U.S. market.

A publicly owned company based in Northern California, ZAP's mission is to establish an automotive company that manufactures and distributes advanced technology vehicles that offer economic, environmental and sustainable benefits over currently available modes of transportation