INVESTMENT IN JOINT VENTURES

9 Months Ended

Sep. 30, 2014

INVESTMENT IN JOINT VENTURES [Abstract]

INVESTMENTS IN JOINT VENTURES

NOTE 5– 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 the focus to support “EV car sharing” or EV leasing. Zapple has a 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.

The carrying amount of the Company's investment in the joint ventures is as follows:

	ZAP Hangzhou			Shanghai Zapple			Total
Balance as of December 31, 2012	$	437		$	461		$	898
Less: investment loss		(438	)		(461	)		(899	)
CTA		1			--			1
Balance as of December 31, 2013		--			--			--
Less: Investment loss		--			--			--
CTA		--			--			--
Balance as of September 30, 2014	$	--		$	--		$	--

The carrying amount of the Joint Venture investment had been written down to $0 as of December 31, 2013. The Company recorded a loss of $0 and $182,000 in ZAP Hangzhou for the nine months ended September 30, 2014 and 2013, respectively. The Company recorded a loss of $0 and $79,000 in ZAP Hangzhou for the three months ended September 30, 2014 and 2013, respectively. Due to the suspension of Shanghai Zapple operations, the company recorded a loss of $0 and $461,000 in Shanghai Zapple for the three and nine months ended September 30, 2014 and 2013 respectively. These losses relate to investment in non-consolidated joint ventures accounted for under the equity method of accounting because the Company does not have control.