Organization And Operations	6 Months Ended
Jun. 30, 2011
Organization And Operations
Organization And Operations	NOTE 1-ORGANIZATION AND OPERATIONS: ZAP was incorporated in California in September 1994 (together with its subsidiaries, "the Company," or "ZAP"). ZAP markets advanced transportation, including alternative energy and fuel efficient automobiles, motorcycles, bicycles, scooters, personal watercraft, hovercraft, neighborhood electric vehicles and commercial vehicles. The Company's business strategy has been to develop, acquire and commercialize electric vehicles and electric vehicle power systems, which the Company believes have fundamental practical and environmental advantages over available internal combustion modes of transportation that can be produced commercially on an economically competitive basis. The Company intends to further expand its technological expertise through selective acquisitions of companies with innovative products in the advanced transportation industry and strategic alliances with certain manufacturers, distributors and sales organizations. On January 21, 2011, the Company completed the acquisition of 51% of the equity shares of Zhejiang Jonway Automobile Co., Ltd. ("Jonway") for a total purchase price of $35,870,000 consisting of approximately $29 million in cash and 8 million shares of ZAP common stock. The Company believes that the acquisition will allow it to expand its distribution network and give it access to the rapidly growing Chinese market for electric vehicles. Jonway is a limited liability company incorporated in Sanmen County, Zhejiang Province of the People's Republic of China ("the PRC") on April 28, 2004 by Jonway Group Co., Ltd. ("Jonway Group"). Jonway Group is under the control of three individuals, Wang Huaiyi, Alex Wang (the son of Wang Huaiyi) and Wang Xiao Ying (the daughter of Wang Huaiyi and all three individuals collectively referred to as the "Wang Family") Jonway's approved scope of business operations includes the production and sale of vehicle spare parts, and the sale of UFO branded vehicles. The principal activities of Jonway are the production and sale of automobile spare parts, and the consignment production and distribution of SUVs. Basis of Presentation The accompanying condensed consolidated financial statements include the financial statements of ZAP, its wholly owned subsidiaries Voltage Vehicles and ZAP Stores and its 51% owned subsidiary Jonway. All significant inter-company transactions and balances have been eliminated. We account for our 37.5% interest in the ZAP Hangzhou Joint Venture using the equity method of accounting. During the three and six months ended June 30, 2011, ZAP Hangzhou incurred an operating loss of $193,730 and $429,230 of which $72,650 and $160,961 is our share at March 31, 2011 and June 30, 2011 respectively. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. All adjustments (all of which are of a normal recurring nature) considered necessary for a fair presentation have been included. Operating results for the three and six months ended March 31, 2011 and June 30, 2011 are not indicative of the results that may be expected for the year ending December 31, 2011 or for any other future period. These condensed consolidated financial statements and the notes thereto should be read in conjunction with the audited financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2010 filed with the Securities and Exchange Commission (the "SEC") on April 15, 2011 (our "2010-K"). ZAP's common stock is quoted on the OTC Bulletin Board under the symbol "ZAAP. OB." Liquidity and Capital Resources In assessing our liquidity, we monitor and analyze our cash on-hand, liquidation value of our investment in related party securities, and our operating and capital expenditure commitments. Our principal liquidity needs are to meet our working capital requirements, operating expenses and capital expenditure obligations. Our principal sources of liquidity consist of our existing cash on hand, our investment in related party securities with Samyang Optics, Ltd. and transactions with Luo Hua Liang, the brother-in-law of Alex Wang, the Co-CEO and director of ZAP. As previously disclosed in our 10-Q filed for the period ended March 31, 2011, we entered into private placement subscription agreements with Mr. Luo for the purchase of ZAP's common stock for the aggregate purchase price of $7 million, of which we received $2 million as of the quarter ended March 31, 2001. The private place subscription agreements were superseded and terminated by a stock purchase agreement with Mr. Luo in August 2011 for the purchase of ZAP's common stock for an aggregate purchase price of $2 million in multiple closings. To date, we have received approximately $771,000 pursuant to the stock purchase agreement. In January 2011, ZAP issued $19 million of convertible debt to make a partial payment in connection with the Jonway Acquisition. ZAP believes that CEVC will convert the note into shares of ZAP common stock, but if CEVC does not elect to so convert the note, the note will require cash repayment in February 2012. Assuming that the note is converted into shares of ZAP common stock and does not require cash repayment in February 2012, at June 30, 2011, we believe that we will have sufficient liquidity required to conduct operations through June 30, 2012. At present, the Company will require additional capital to expand our current operations. In particular, we require additional capital to expand our presence into Asia, to continue development of our methodology for converting gasoline vehicles to electric and to continue building our dealer network and expanding our market initiatives. We also require financing to purchase consumer inventory for the continued roll-out of new products to add qualified sales and professional staff to execute our efforts in the research and development of advanced technology vehicles, such as the new ZAP alias and other fuel efficient vehicles. We intend to fund our long term liquidity needs related to operations through the incurrence of indebtedness, equity financing or a combination of both. Although we believe that these sources will provide sufficient liquidity for us to meet our future liquidity and capital obligations, our ability to fund these needs will depend on our future performance, which will be subject in part to general economic, financial, regulatory and other factors beyond our control, including trends in our industry and technological developments. However, we may not be able to obtain this additional financing on terms acceptable to us or at all.

NOTE 1-ORGANIZATION AND OPERATIONS:

ZAP was incorporated in California in September 1994 (together with its subsidiaries, "the Company," or "ZAP"). ZAP markets advanced transportation, including alternative energy and fuel efficient automobiles, motorcycles, bicycles, scooters, personal watercraft, hovercraft, neighborhood electric vehicles and commercial vehicles. The Company's business strategy has been to develop, acquire and commercialize electric vehicles and electric vehicle power systems, which the Company believes have fundamental practical and environmental advantages over available internal combustion modes of transportation that can be produced commercially on an economically competitive basis. The Company intends to further expand its technological expertise through selective acquisitions of companies with innovative products in the advanced transportation industry and strategic alliances with certain manufacturers, distributors and sales organizations.

On January 21, 2011, the Company completed the acquisition of 51% of the equity shares of Zhejiang Jonway Automobile Co., Ltd. ("Jonway") for a total purchase price of $35,870,000 consisting of approximately $29 million in cash and 8 million shares of ZAP common stock. The Company believes that the acquisition will allow it to expand its distribution network and give it access to the rapidly growing Chinese market for electric vehicles.

Jonway is a limited liability company incorporated in Sanmen County, Zhejiang Province of the People's Republic of China ("the PRC") on April 28, 2004 by Jonway Group Co., Ltd. ("Jonway Group"). Jonway Group is under the control of three individuals, Wang Huaiyi, Alex Wang (the son of Wang Huaiyi) and Wang Xiao Ying (the daughter of Wang Huaiyi and all three individuals collectively referred to as the "Wang Family")

Jonway's approved scope of business operations includes the production and sale of vehicle spare parts, and the sale of UFO branded vehicles. The principal activities of Jonway are the production and sale of automobile spare parts, and the consignment production and distribution of SUVs.

Basis of Presentation

The accompanying condensed consolidated financial statements include the financial statements of ZAP, its wholly owned subsidiaries Voltage Vehicles and ZAP Stores and its 51% owned subsidiary Jonway. All significant inter-company transactions and balances have been eliminated. We account for our 37.5% interest in the ZAP Hangzhou Joint Venture using the equity method of accounting. During the three and six months ended June 30, 2011, ZAP Hangzhou incurred an operating loss of $193,730 and $429,230 of which $72,650 and $160,961 is our share at March 31, 2011 and June 30, 2011 respectively.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. All adjustments (all of which are of a normal recurring nature) considered necessary for a fair presentation have been included. Operating results for the three and six months ended March 31, 2011 and June 30, 2011 are not indicative of the results that may be expected for the year ending December 31, 2011 or for any other future period. These condensed consolidated financial statements and the notes thereto should be read in conjunction with the audited financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2010 filed with the Securities and Exchange Commission (the "SEC") on April 15, 2011 (our "2010-K").

ZAP's common stock is quoted on the OTC Bulletin Board under the symbol "ZAAP. OB."

Liquidity and Capital Resources

In assessing our liquidity, we monitor and analyze our cash on-hand, liquidation value of our investment in related party securities, and our operating and capital expenditure commitments. Our principal liquidity needs are to meet our working capital requirements, operating expenses and capital expenditure obligations.

Our principal sources of liquidity consist of our existing cash on hand, our investment in related party securities with Samyang Optics, Ltd. and transactions with Luo Hua Liang, the brother-in-law of Alex Wang, the Co-CEO and director of ZAP. As previously disclosed in our 10-Q filed for the period ended March 31, 2011, we entered into private placement subscription agreements with Mr. Luo for the purchase of ZAP's common stock for the aggregate purchase price of $7 million, of which we received $2 million as of the quarter ended March 31, 2001. The private place subscription agreements were superseded and terminated by a stock purchase agreement with Mr. Luo in August 2011 for the purchase of ZAP's common stock for an aggregate purchase price of $2 million in multiple closings. To date, we have received approximately $771,000 pursuant to the stock purchase agreement.

In January 2011, ZAP issued $19 million of convertible debt to make a partial payment in connection with the Jonway Acquisition. ZAP believes that CEVC will convert the note into shares of ZAP common stock, but if CEVC does not elect to so convert the note, the note will require cash repayment in February 2012. Assuming that the note is converted into shares of ZAP common stock and does not require cash repayment in February 2012, at June 30, 2011, we believe that we will have sufficient liquidity required to conduct operations through June 30, 2012.

At present, the Company will require additional capital to expand our current operations. In particular, we require additional capital to expand our presence into Asia, to continue development of our methodology for converting gasoline vehicles to electric and to continue building our dealer network and expanding our market initiatives. We also require financing to purchase consumer inventory for the continued roll-out of new products to add qualified sales and professional staff to execute our efforts in the research and development of advanced technology vehicles, such as the new ZAP alias and other fuel efficient vehicles.

We intend to fund our long term liquidity needs related to operations through the incurrence of indebtedness, equity financing or a combination of both. Although we believe that these sources will provide sufficient liquidity for us to meet our future liquidity and capital obligations, our ability to fund these needs will depend on our future performance, which will be subject in part to general economic, financial, regulatory and other factors beyond our control, including trends in our industry and technological developments. However, we may not be able to obtain this additional financing on terms acceptable to us or at all.