SOURCE: ZAP

August 24, 2006 07:00 ET

New ZAP Electric Vehicle a Different Kind of Horsepower for US Car Buyers

ZAP Introduces Multi-Purpose Electric Vehicle to Utility, Corporate and Municipal Fleet Managers in California

SANTA ROSA, CA -- (MARKET WIRE) -- August 24, 2006 -- Automotive pioneer ZAP (NYSE Arca: ZP) is rolling out a new, all-electric vehicle today designed to address the need for gas-free alternatives with multi-purpose city driving, from industrial fleets to commuting.

Called the XEBRA PK, this latest ZAP seats two with a multi-purpose platform behind the passenger compartment that serves as a hauler, dump truck or flatbed. For images, visit http://www.zapworld.com. Officials with the Company say they had test-marketed a single passenger version, but feedback told them a two-passenger version would be more versatile. "This vehicle is the result of more than 30 years of research in the EV field," said Gary Starr, a founder of ZAP. "Based on what we are hearing from consumers and ZAP dealers, we believe the potential for the XEBRA PK would be bigger than for the sedan version. It serves a multitude of functions and we feel it is truly unique in the marketplace, a market previously untapped in the auto industry."

ZAP Chairman Starr cited a study that showed more than a third of new car buyers in California would buy an electric vehicle if that vehicle were priced close to a gasoline vehicle and offered similar functionality. XEBRAs are priced at under $10,000. The 2000 Green Car Institute study titled "The Current and Future Market for Electric Vehicles" used the same research methodologies employed by the auto industry to identify markets for gas vehicles.

"Green Car Institute's study put to rest the contention that there is no market for electric vehicles," said Green Car Institute President Ron Cogan. "The challenge is that the new car market is price and feature sensitive, and that created a disconnect with most EV models marketed in the recent past. They were very expensive to manufacture -- mostly because of their battery packs and small build numbers -- and almost all were available for lease only. Survey respondents wanted affordable EVs they could buy... they just didn't exist. Six years after the study, gas prices are even more of an issue for consumers and this potential EV market remains."

That market is presenting itself with the introduction of the XEBRA and the XEBRA PK. ZAP dealer Larry Dye of Electric Wheels in Salem, Oregon said, "I've already sold over 25 of the XEBRAs, but I've sold four XEBRA PKs sight-unseen. It has many more uses: it's a great commute vehicle; it's also a hauler; a dump truck; it folds down to be a flatbed; it can be a ranch or farm vehicle; or an economical fleet vehicle. I've got several businesses that can't wait to go for their first test drive. We'll have a whole herd of XEBRAs and PKs running around Salem before you know it."

Starr noted that ZAP has talked to many cities that are interested in replacing their gas powered parking enforcement vehicles. Several businesses have inquired about inter-campus transportation and even bridge districts have requested vehicles like it.

ZAP unveiled the vehicle today as part of its scheduled marketing, which over the next several weeks includes displays, demonstrations and test-drives to select target audiences in California. To participate, visit http://www.zapworld.com.

About ZAP

ZAP stands for Zero Air Pollution. Its mission is to be the leading distribution portal of socially responsible and environmentally sustainable, advanced technology vehicles. ZAP is a pioneer at the forefront of electric and other fuel efficient transportation and believes that helping our stakeholders act responsibly, both with regards to our environment and the oil crisis, can go hand-in-hand with generating appropriate returns on our investments. For more information, visit http://www.zapworld.com.

Forward Looking Statements

Statements in this press release that relate to future plans or projected results of ZAP are 'forward-looking statements' within the meaning of Section 27A of the Securities Act of 1933, as amended by the Private Securities Litigation Reform Act of 1995 (the "PSLRA"), and Section 21E of the Securities Exchange Act of 1934, as amended by the PSLRA, and all such statements fall under the 'safe harbor' provisions of the PSLRA. ZAP's actual results may vary materially from those described in any 'forward-looking statement' due to, among other possible reasons, the continued acceptance of ZAP's products, increased levels of competition, new products and technological changes, ZAP's dependence on third-party suppliers, intellectual property rights, and the realization of any of the other risks described in ZAP's Annual Report on Form 10-KSB, or in any of ZAP's other filings with the Securities and Exchange Commission. Readers of this press release are cautioned not to put undue reliance on forward-looking statements.

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