Interpretation ID: X Prize

Kenneth N. Weinstein, Esq.

Mayer Brown LLP
1909 K Street, NW
Washington, DC  20006

Dear Mr. Weinstein:

This responds to your request, on behalf of the Progressive Insurance Automotive X Prize (PIAXP) for a statement and/or interpretation from the National Highway Traffic Safety Administration (NHTSA) concerning the implications under the National Traffic and Motor Vehicle Safety Act (Vehicle Safety Act) of vehicles participating in the PIAXP competitions operating on the public roads. You asked this question in light of the fact that the vehicles would not necessarily comply with applicable Federal motor vehicle safety standards (FMVSSs).

The issues raised by your request are addressed below. In short, given the specific facts related to the PIAXP competitions that you provided, including the limited nature of the operation of these vehicles on the public roads and the fact that the roads will be closed under local or State government supervision, it is our opinion that the Vehicle Safety Act would not have the effect of preventing these vehicles from participating in the competitions. Our opinion is based on the facts you provided and the analysis set forth below.

The PIAXP is, as described in information available on the PIAXP website[1]:

An international competition designed to inspire a new generation of viable, super fuel-efficient vehicles. The independent and technology-neutral competition is open to teams from around the world that can design, build and bring to market 100 MPGe (miles per gallon energy equivalent) vehicles that people want to buy, and that meet market needs for price, size, capability, safety and performance.

The nature of the competition is described, in draft guidelines available on the PIAXP website, as follows:

The competition will comprise two vehicle classes: Mainstream and Alternative. Mainstream vehicles will be required to carry four or more passengers, have four or more wheels, and allow for a 200-mile range.

Alternative-class vehicles will be required to carry two or more passengers, have no constraints on the number of wheels, and allow for a 100-mile range. All vehicles will need to meet requirements for performance and features to make the cars attractive to consumers. The competition will culminate with two dramatic, long-distance stage races in 2009-2010 a Qualifying Race and the Grand Prize Final Race. Race courses will reflect typical consumer driving patterns during numerous stages, in varied terrain, communities, and weather conditions. To win, vehicles must complete both races with the lowest overall time averaged over all scoring stages while still meeting the requirements for 100 MPGe fuel economy and low emissions of carbon dioxide and other pollutants. The $10 million prize purse will be split 3:1 between the winners of the Mainstream and Alternative classes.

You provided the following description of the manner in which the PIAXP races would be conducted:

Competition vehicles will participate in stage races designed to test the vehicles under typical driving conditions.

To ensure adequate safety, pre-race inspections will verify that vehicles have PIAXP-required safety equipment and features. And pre-race performance tests will verify that the vehicles meet PIAXP braking and stability requirements. These safety requirements were established by a Working Group that includes current and former NHTSA experts.

Some race stages will be conducted on closed tracks, others on public roads. For the stages conducted on public roads, vehicles will start one-at-a-time and will be timed separately. No side-by-side driving will be permitted, with strict rules on giving way to a faster vehicle. Vehicles will have to obey all speed limits and other traffic regulations. The public roads will be closed to all non-race traffic during the race stages (these may be rolling closures that cover the full extent of the PIAXP vehicles on the course as is often done for running and cycling events). Road closures will be supervised by local city and state governments, and implemented by local police and other agencies.

Vehicles will also participate in non-race demonstration events to showcase them to the public, to government officials, and to the media. These events will largely take place at closed public-private venues e.g., large parking lots. If any of these non-race demonstrations do take place on public roads, they will do so under the same conditions described above (closed roads supervised by local city and state governments).

Most vehicles will be shipped from one event to the next, rather than driven. We may organize a PIAXP-sponsored [convoy] to drive in parade-format from one event to the next, but any such [convoy] will likewise occur over closed roads, as described above.

Any team that wishes to drive a noncompliant vehicle independently between events (or under any other circumstances on public roads) is responsible for obtaining any necessary exemptions and/or permits that might be needed to meet all legal requirements.

As indicated above, you asked us to address the implications under the Vehicle Safety Act of operation on the public roads of vehicles participating in the PIAXP competitions in light of the fact that the vehicles would not necessarily comply with applicable FMVSSs.

Under 49 U.S.C. 30112(a), with certain exceptions, a person may not manufacture for sale, sell, offer for sale, introduce or deliver for introduction in interstate commerce, or import into the United States any motor vehicle unless it complies with applicable FMVSSs and is so certified.

The primary issue raised by your request is whether operation on the public roads of vehicles participating in the PIAXP competitions would constitute introducing the vehicles in interstate commerce. Since we are only addressing the implications of the Vehicle Safety Act with respect to the operation of these vehicles in the PIAXP competitions, the prohibitions on manufacturing for sale, selling, offering for sale, and importing noncomplying vehicles are not relevant to the analysis.

Given the limited nature of the operation of these vehicles on the public roads as part of participating in the PIAXP competitions, including the fact that the roads will be closed under local or State government supervision for the races, possible demonstrations, and convoys between events, it is our opinion that such operation on the public roads would

not constitute an introduction into interstate commerce for purposes of the Vehicle Safety Act. We note that this opinion does not cover independent driving on the public roads by teams between events, or other activities not specifically addressed in this letter.

I hope this information is helpful.

Sincerely yours,

Anthony M. Cooke

Chief Counsel

ref:VSA

d.1/16/09