ZAP Stock Recovered onAnticipations of Rapid EV Deployment in China and Korea Markets

Jul,06,2010

ZAP (OTC BB : ZAAP) stock price recovered from May 26 low of $0.30 to July 2
high of $0.40 on positive news regarding the progress the Company made to increase
the visibility and acceptance of its Electric Vehicles (EVs) offering and solid
governmental support that is likely to be introduced next fall. The Company’s daily trading activity has also improved significantly averaging more than $135,000 for the last trading week.

ZAP is one of the world’s oldest and most experienced electric vehicle providers,
having delivered over 117,000 of a broad range of vehicles to more than 75 countries since 1994. ZAP supplies electric trucks and vans to military, government and corporate fleets and is an innovator of electric motorcycles, scooters and ATVs. With the recent increases in the price of oil and growing concerns about the environment as well as the negative effects of global warming, there is clearly a huge emerging for the Company.

The Company’s approach is to make electric cars more cost effective and more
comfortable. A large portion of ZAP’s car sales are fleet vehicles. The Company
supplies EVs for a number of government entities, companies, and universities
including Google, University of San Francisco, National Park Service, Coca Cola, and the military.

During 2010, the Company announced that it has developed an efficient methodology
for the conversion of conventional gasoline engine vehicles into electric vehicles.
Presently it is targeting China and Korea to convert conventional gasoline powered
internal combustion SUVs to plug-in-electric vehicles to serve taxi markets in these countries. The Company has completed the first prototypes and currently is in the testing phase. As a result of this achievement, ZAP have been selected as one of five companies to convert a prototype United States Postal Service ( USPS) van from conventional gasoline powered internal combustion to plug-in-electric for delivery in July 2010 for field testing by the USPS. USPS operates a fgleet of about 142,000 of these trucks, which creates an enormous opportunity for the Company.

At the Beijing Motor Show in April, ZAP displayed its all-electric ZAP Taxi targeting the fleet market as well as its innovative all-electric Alias prototype sports car. The Company introduced their design and engineering expertise to the Chinese media and outlined plans to enter the Asia-Pacific market. The Company has already started the pilot production of the ZAP Taxi at ZAP Hangzhou, the joint venture in Hangzhou China with Holley Group. The vehicles are designed for Asian market, such as taxi fleets, as well as intra-campus transportation for large corporate, government, military and university campuses. ZAP has also formed a partnership with Samyang Optics to distribute its full line of EVs in Korea. Over time, ZAP and Samyang Optics expect to develop an assembly process for EVs in Korea to eventually source and manufacture the parts and EV components in Korea.

The Company’s all-electric Alias prototype sports car has qualified for the Progressive Insurance Automotive X PRIZE (PIAXP) competition for 100 MPG (miles per gallon energy equivalent) and above cars. The ZAP Alias will compete in the alternative category of the PIAXP, which was formed to encourage creativity in vehicle designs.

The first tests proved that ZAP Alias is a safe, efficient and fast vehicle, with
accelerations of 5 seconds from 40 to 65 mph. Winners will share the $10 million
prize purse, funded by Progressive Insurance.

In addition, the Company’s offering could get a solid legislative boost next fall, when the U.S. Senate is likely to change the existing $7,500 federal tax credit for EVs purchases to a credit of up to $10,000. Moreover, similar plans were announced by China, where buyers of electric vehicles will receive subsidies of up to $8,800 under a two-year program to support the rollout of the EV industry in the country. The Korean government has also announced plans to offer subsidies, tax benefits and funding allocations for EVs of over $500 million managed by Ministry of Knowledge Economy.