INVESTMENT IN JOINT VENTURES

12 Months Ended

Dec. 31, 2012

INVESTMENT IN JOINT VENTURES [Abstract]

INVESTMENTS IN JOINT VENTURES

NOTE 7 - INVESTMENT IN JOINT VENTURES

On December 11, 2009, the Company entered into a Joint Venture Agreement to establish a new US-China company incorporated as ZAP Hangzhou to design and manufacture electric vehicle and infrastructure technology with Holley Group, the parent company of a global supplier of electric power meters and Better World. Priscilla Lu, Ph.D., who is the current Chairman of the Board of ZAP, is also a director and General Partner of Cathaya Capital, which is a shareholder of Better World. In January of 2011, Holley Group's interest in ZAP Hangzhou was purchased by Jonway Group. ZAP and Better World each own 37.5% of the equity shares of ZAP Hangzhou, and Jonway Group owns 25% of the equity shares of ZAP Hangzhou. The joint venture partners have also funded the initial capital requirements under the agreement for a total of $3 million, of which ZAP's portion is $1.1 million.

In November 2011, Jonway and ZAP Hangzhou jointly set up Shanghai Zapple Electric Vehicle Technologies Co., Ltd. (Shanghai Zapple) with registered capital of RMB 20 million. Jonway and ZAP Hangzhou each own 50% of the equity share of Shanghai Zapple. Jonway injected RMB 5 million into this joint venture and ZAP Hangzhou injected RMB 3 million. Shanghai Zapple's approved scope of business includes: technical advice, technical development, technical services, technology transfer regarding electric vehicle technology, auto technology, energy technology, material science and technology, sale of commercial vehicle and vehicle for nine seats or more, auto parts, auto supplies, lubricant, mechanical equipment and accessories, business management consulting, industrial investment, exhibition services, business marketing planning, car rental (shall not be engaged in financial leasing), import and export of goods and technologies.

The carrying amount of the joint ventures is as follows:

	ZAP Hangzhou			Shanghai Zapple			Total
Balance as of December 31, 2010	$	808		$	-		$	808
Initial investment		-			790			790
Less: investment loss		(272	)		(56	)		(328	)
CTA		18			2			20
Balance as of December 31, 2011		554			736			1,290
Less: investment loss		(123	)		(280	)		(403	)
CTA		6			5			11
Balance as of December 31, 2012	$	437		$	461		$	898

The Company recorded a loss of $123,000 and $272,000 in ZAP Hangzhou, and a loss of $280,000 and $56,000 in Shanghai Zapple for the years ended December 31, 2012 and 2011 respectively. These losses relate to the investment in a non-consolidated joint ventures accounted for under the equity method of accounting because the company does not have control.

Summarized financial information of Hangzhou ZAP and Shanghai Zapple are as follows: (in thousands)

	December 31,
	2012		2011
Shanghai Zapple
Total assets	$	1,472	$	1,325
Total liabilities		867		172
Revenue		-		-
Hangzhou ZAP
Total assets		1,682		1,819
Total liabilities		118		259
Revenue	$	922	$	-