ORGANIZATION AND BASIS OF PRESENTATION	9 Months Ended
Sep. 30, 2014
ORGANIZATION AND BASIS OF PRESENTATION [Abstract]
ORGANIZATION AND BASIS OF PRESENTATION	NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION: ZAP (together with its subsidiaries, the “Company” or “ZAP”) was incorporated in California in September, 1994. ZAP markets electric, alternative energy, and fuel efficient automobiles and commercial vehicles, motorcycles and scooters, and other forms of personal transportation. The Company's business strategy is 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 and that can be produced commercially on an economically competitive basis. In pursuit of a manufacturing plant and a partner with an existing product line, a distribution and customer support network in China, and experience in vehicle manufacturing, ZAP acquired a majority of the outstanding equity in Zhejiang Jonway Automobile Co., Ltd. (“Jonway Auto” or “Jonway”). The Company believes its 51% acquisition of Jonway will enable it to access the rapidly-growing Chinese market for electric vehicles (“EV”) and to expand its EV business and distribution network around the world. The Company also believes Jonway's ISO 9001 certified manufacturing facility provides the competitive production capacity and resources to support production of ZAP's new line of electric SUV, minivan, and Neighborhood EV (“NEV”). 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”). The principal activities of Jonway until recently were the production and sales of gasoline models of the SUVs and minivans in China using the consigned UFO license from an affiliate of Jonway Group. Over the past three years, Jonway continued the production and sales of its gasoline model SUV and minivan, while developing and ramping production of its EV product line. Jonway received type approval of its EV SUV and EV certification of its manufacturing facility from the Chinese government more than a year ago. It also developed two different full electric EV models for its minivan, one with lithium batteries, which has longer range and more power, and the other with lead acid batteries, intended for lower speed and shorter range. Jonway began production on a new NEV in April, 2014 focusing on the growing aging and young adult population in China that generally do not hold a driver's license Jonway Auto, as an authorized auto manufacturer in China, has access to the required licenses for China type approval for both the SUV and minivan models, providing these models with the advantage that lithium battery versions would be eligible for subsidies from the Chinese central and local governments ranging from RMB 35,000 (~US$5,000) to RMB 100,000 (~US$16,000) depending upon the range of the vehicle achieved between recharges. EVs reaching 250km in range per charge could receive up to ~$10,000 subsidies from the central government and another ~$10,000 from the local government. Currently 88 local government cities are participating in this subsidy as required by the central government. The Chinese government recently announced these subsidies have been extended to the year 2020, with the total amount of subsidies gradually tapering off each year. Additionally, the Chinese government recently mandated that government vehicles must be Chinese-made and that a minimum of 30% of the vehicles purchased are required to be full electric. ZAP believes these incentives, combined with the elimination of sales tax, consumer tax, and license plate registration fees on full electric vehicles (which can total more than US$20,000 for gas vehicles in some cities like Shanghai), are creating a strong economic incentive for the purchase of electric vehicles and a substantial market opportunity for Jonway's new EV SUV and EV minivan product line. Jonway Auto's EV SUV and EV minivan have been reconfigured with smaller engines to support lower power consumption. The EV SUV has a 20kwatt (40kwatt peak)engine. The EV minivan which is a much lighter vehicle has a 13.5kwatt engine. These newly reconfigured EVs adapted to maximize range at optimal speeds will be available for mass production in 1Q2015. ZAP and Jonway Auto are focused on the EV fleet markets in China. With the recent reinforced subsidies and requirements for government entities to purchase full electric vehicles, the Company believes Jonway's new EV SUV is particularly suited for use by government officials and personnel. Jonway's SUV currently has an advantage in China because most auto companies to date have focused primarily on producing small electric sedans, some with only two seats, that are not very practicable for use by government officials on a daily basis. Whereas, Jonway's SUV is a larger 5-person vehicle with comfortable seating and legroom. Jonway's EV minivan is well-positioned for government city utility and maintenance transportation and service. The minivan was designed with removable rear seats so that it may also serve as a delivery van for use in the projected rapid growth market of EVs used for the transport of goods and packages in China. Jonway Auto began transforming its manufacturing plant to support mass production of several full electric vehicle models in 2014. With the urgent priority to provide multiple manufacturing EV production lines to support multiple models of EVs, Jonway reduced its resource investment in the traditional gasoline vehicle products and cut back on funding the sales and marketing of its gasoline SUV and gasoline minivans. Jonway is now in the process of migrating its organization to support the ramp up of electric vehicle production and preparing for sales and marketing to fleet markets, including to leasing companies and government organizations in the major cities. 2014 has been a major transitioning year for Jonway Auto, where there has been an intentional slowdown in gasoline vehicle production and sales, while Jonway is redirecting its manufacturing and sales and marketing groups to support the mass rollout of its EVs, starting with its new Neighborhood EV model, Urbee, for city commuters. Many of the traditional gasoline vehicle dealerships that are not focused on supporting EV products will be dropped. This transition from gasoline to electric vehicles has affected the revenue and profitability of the Company. As the sales of gasoline vehicles decreases, overhead costs are being absorbed by a smaller volume of sales, reducing gross margins. We anticipate improvement in the gross margins as the sales volume of new EV products increases. Another factor affecting the overall reduction in sales by many of the dealers is the shrinking bank credit lines available to smaller dealerships and business. As a result of the Chinese government's requirement for banks to retain a larger cash reserve, credit facilities for smaller dealerships have been reduced, thus contracting the overall availability of credit for purchasing. However, Chinese banks are being encouraged by the Chinese government to support credit facilities to promote EV sales, including EV leasing and EV fleet markets. The combined companies' new EV product lines include the A380 SUV EV and the minivan EV, the recently announced Urbee, and Sparkee. Both the EV SUV and EV minivan products leverage the production moldings, the manufacturing engineering infrastructure and facilities currently in place for the gasoline models of these vehicles. The new Urbee started its first production delivery in the 2nd quarter of 2014. The first production deliveries of the EV SUV and Minivans are projected to occur in the 1st and 2nd quarters of 2015, respectively. The Company's 3Q2014 revenues were lower when compared year over year as Jonway cut back on its gasoline vehicle sales and marketing activities in order to redirect the organization and resources to focus on developing the EV dealership networks and selling the Urbee, Jonway has received orders over twenty thousand projected sales orders, with monthly quantities ordered for the different dealerships. Some of the orders for these Urbees will depend on availability of working capital, and Jonway Auto is delivering the Urbees based on the amount of advanced payments from the dealerships and partners. Urbee is a low speed vehicle which is currently not a nationally recognized category in China except for a few provinces. The rate of orders placed from the pipeline will in part depend on the rate at which Jonway Auto is able to manufacture and deliver the vehicles. Given that the EV market is just now being developed in China, Jonway Auto is partnering with a few strong dealers in order to work closely on the product service support and customer service. The goal of the Company is to become cash flow positive in the second half of 2015 by producing and selling vehicles at a target rate of a couple thousand Urbees per month on average and at least a few hundred SUVs or minivans per month, combining the delivery of both EVs and gasoline versions of the models. The Company's strategy for achieving this goal is to leverage the volume sales orders and the continuing demand from the market for Urbees to drive down the cost of production in the factory for EVs and to substantially absorb the overhead of the factory. The Company believes mass production ramp up of the Urbees will help streamline the EV manufacturing process, provide a good training ground for the production engineers, and pave the way for volume production of the more sophisticated EV products of minivan and EV SUVs. Jonway Auto will cut back on the number of gasoline SUV models in order to reduce the overhead costs of carrying too many different gasoline versions. Jonway will focus on its high volume lower cost gasoline model priced at around US$10,000, replacing its 1.6 liters gasoline model with a more cost effective and efficient 1.5 liter engine model. This will be Jonway's mainstream gasoline model. In the meantime, Jonway auto established its three wholly-owned subsidiaries, namely, Taizhou Selling Co., Ltd. focusing on vehicles marketing and distribution, Taizhou Fuxing Vehicle Sale Co., Ltd. focusing on minivan marketing and distribution in China and Taizhou Vehicle Leasing Co., Ltd focusing on the vehicle leasing business in Taizhou. BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements include the accounts of ZAP, and its subsidiaries: Jonway Automobile, Voltage Vehicles, ZAP Stores and ZAP Hong Kong for the three and nine months ended September 30, 2014 and 2013 and are prepared in accordance with United States (“U.S.”) generally accepted accounting principles (“GAAP”). Management considers “subsidiaries” to be companies that are over 50% owned or controlled by ZAP,. Intercompany transactions and balances are eliminated in consolidation; profits from intercompany sales, are also eliminated; non –controlling interests are included in equity. 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 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, 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 nine months ended September 30, 2014 and 2013 may not be indicative of the results that may be expected for the year ending December 31, 2014 or for any other future period. These unaudited 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, 2013 filed with the Securities and Exchange Commission (the “SEC”) on April 15, 2014 (our “10-K”). LIQUIDITY In assessing our liquidity, we monitor and analyze our cash on-hand 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 and bank facilities from China-based banks for Jonway Auto. As of September 30, 2014, we had $16.1 million in short term bank loans outstanding on the approved credit line of $41.3 million with credit exposure totaling $19.6 million with four China-based banks. The loans are secured by land and buildings owned by Jonway and guaranteed by related party Jonway Group and shareholder Wang Huaiyi. The interest rates on the loans range from 5.04% to 8.93% per annum and the loans expire at various times through September 2015. Jonway intends to raise funds to support working capital needs for EV production. If additional funding is available above the amount required for working capital, Jonway may use the additional funds for the testing and homologation of new models and potentially for new EV product molds. Depending upon the amount of available capital, funds may also be used to support the Company's expansion plans, with emphasis on electric vehicle sales and marketing, and new product roll outs. Also our principal shareholder, Jonway Group, has agreed to provide the necessary support to meet our financial obligations through November 14, 2015 in the event that we require additional liquidity. In addition, CEVC (China Electric Vehicle Corporation) would likely renew the convertible note which has been extended to August 2015 . In the event that CEVC decides to call on the repayment, the repayment would likely be paid in full or in part in Jonway Auto shares or ZAP shares unless there is a breach by the Company on the covenant of the convertible note. We intend to fund our long term liquidity needs related to operations through additional 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. On September 16, 2014 the Company entered into a Placement Agency Agreement for the purpose of identifying qualified prospective purchasers of the Company's debt and/or equity securities through the private placement of such securities.

NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION:

ZAP (together with its subsidiaries, the “Company” or “ZAP”) was incorporated in California in September, 1994. ZAP markets electric, alternative energy, and fuel efficient automobiles and commercial vehicles, motorcycles and scooters, and other forms of personal transportation. The Company's business strategy is 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 and that can be produced commercially on an economically competitive basis.

In pursuit of a manufacturing plant and a partner with an existing product line, a distribution and customer support network in China, and experience in vehicle manufacturing, ZAP acquired a majority of the outstanding equity in Zhejiang Jonway Automobile Co., Ltd. (“Jonway Auto” or “Jonway”). The Company believes its 51% acquisition of Jonway will enable it to access the rapidly-growing Chinese market for electric vehicles (“EV”) and to expand its EV business and distribution network around the world. The Company also believes Jonway's ISO 9001 certified manufacturing facility provides the competitive production capacity and resources to support production of ZAP's new line of electric SUV, minivan, and Neighborhood EV (“NEV”).

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”).

The principal activities of Jonway until recently were the production and sales of gasoline models of the SUVs and minivans in China using the consigned UFO license from an affiliate of Jonway Group. Over the past three years, Jonway continued the production and sales of its gasoline model SUV and minivan, while developing and ramping production of its EV product line. Jonway received type approval of its EV SUV and EV certification of its manufacturing facility from the Chinese government more than a year ago. It also developed two different full electric EV models for its minivan, one with lithium batteries, which has longer range and more power, and the other with lead acid batteries, intended for lower speed and shorter range. Jonway began production on a new NEV in April, 2014 focusing on the growing aging and young adult population in China that generally do not hold a driver's license

Jonway Auto, as an authorized auto manufacturer in China, has access to the required licenses for China type approval for both the SUV and minivan models, providing these models with the advantage that lithium battery versions would be eligible for subsidies from the Chinese central and local governments ranging from RMB 35,000 (~US$5,000) to RMB 100,000 (~US$16,000) depending upon the range of the vehicle achieved between recharges. EVs reaching 250km in range per charge could receive up to ~$10,000 subsidies from the central government and another ~$10,000 from the local government. Currently 88 local government cities are participating in this subsidy as required by the central government. The Chinese government recently announced these subsidies have been extended to the year 2020, with the total amount of subsidies gradually tapering off each year. Additionally, the Chinese government recently mandated that government vehicles must be Chinese-made and that a minimum of 30% of the vehicles purchased are required to be full electric. ZAP believes these incentives, combined with the elimination of sales tax, consumer tax, and license plate registration fees on full electric vehicles (which can total more than US$20,000 for gas vehicles in some cities like Shanghai), are creating a strong economic incentive for the purchase of electric vehicles and a substantial market opportunity for Jonway's new EV SUV and EV minivan product line. Jonway Auto's EV SUV and EV minivan have been reconfigured with smaller engines to support lower power consumption. The EV SUV has a 20kwatt (40kwatt peak)engine. The EV minivan which is a much lighter vehicle has a 13.5kwatt engine. These newly reconfigured EVs adapted to maximize range at optimal speeds will be available for mass production in 1Q2015.

ZAP and Jonway Auto are focused on the EV fleet markets in China. With the recent reinforced subsidies and requirements for government entities to purchase full electric vehicles, the Company believes Jonway's new EV SUV is particularly suited for use by government officials and personnel. Jonway's SUV currently has an advantage in China because most auto companies to date have focused primarily on producing small electric sedans, some with only two seats, that are not very practicable for use by government officials on a daily basis. Whereas, Jonway's SUV is a larger 5-person vehicle with comfortable seating and legroom. Jonway's EV minivan is well-positioned for government city utility and maintenance transportation and service. The minivan was designed with removable rear seats so that it may also serve as a delivery van for use in the projected rapid growth market of EVs used for the transport of goods and packages in China.

Jonway Auto began transforming its manufacturing plant to support mass production of several full electric vehicle models in 2014. With the urgent priority to provide multiple manufacturing EV production lines to support multiple models of EVs, Jonway reduced its resource investment in the traditional gasoline vehicle products and cut back on funding the sales and marketing of its gasoline SUV and gasoline minivans. Jonway is now in the process of migrating its organization to support the ramp up of electric vehicle production and preparing for sales and marketing to fleet markets, including to leasing companies and government organizations in the major cities. 2014 has been a major transitioning year for Jonway Auto, where there has been an intentional slowdown in gasoline vehicle production and sales, while Jonway is redirecting its manufacturing and sales and marketing groups to support the mass rollout of its EVs, starting with its new Neighborhood EV model, Urbee, for city commuters. Many of the traditional gasoline vehicle dealerships that are not focused on supporting EV products will be dropped. This transition from gasoline to electric vehicles has affected the revenue and profitability of the Company. As the sales of gasoline vehicles decreases, overhead costs are being absorbed by a smaller volume of sales, reducing gross margins. We anticipate improvement in the gross margins as the sales volume of new EV products increases.

Another factor affecting the overall reduction in sales by many of the dealers is the shrinking bank credit lines available to smaller dealerships and business. As a result of the Chinese government's requirement for banks to retain a larger cash reserve, credit facilities for smaller dealerships have been reduced, thus contracting the overall availability of credit for purchasing. However, Chinese banks are being encouraged by the Chinese government to support credit facilities to promote EV sales, including EV leasing and EV fleet markets.

The combined companies' new EV product lines include the A380 SUV EV and the minivan EV, the recently announced Urbee, and Sparkee. Both the EV SUV and EV minivan products leverage the production moldings, the manufacturing engineering infrastructure and facilities currently in place for the gasoline models of these vehicles. The new Urbee started its first production delivery in the 2nd quarter of 2014. The first production deliveries of the EV SUV and Minivans are projected to occur in the 1st and 2nd quarters of 2015, respectively.

The Company's 3Q2014 revenues were lower when compared year over year as Jonway cut back on its gasoline vehicle sales and marketing activities in order to redirect the organization and resources to focus on developing the EV dealership networks and selling the Urbee, Jonway has received orders over twenty thousand projected sales orders, with monthly quantities ordered for the different dealerships. Some of the orders for these Urbees will depend on availability of working capital, and Jonway Auto is delivering the Urbees based on the amount of advanced payments from the dealerships and partners. Urbee is a low speed vehicle which is currently not a nationally recognized category in China except for a few provinces. The rate of orders placed from the pipeline will in part depend on the rate at which Jonway Auto is able to manufacture and deliver the vehicles. Given that the EV market is just now being developed in China, Jonway Auto is partnering with a few strong dealers in order to work closely on the product service support and customer service.

The goal of the Company is to become cash flow positive in the second half of 2015 by producing and selling vehicles at a target rate of a couple thousand Urbees per month on average and at least a few hundred SUVs or minivans per month, combining the delivery of both EVs and gasoline versions of the models. The Company's strategy for achieving this goal is to leverage the volume sales orders and the continuing demand from the market for Urbees to drive down the cost of production in the factory for EVs and to substantially absorb the overhead of the factory. The Company believes mass production ramp up of the Urbees will help streamline the EV manufacturing process, provide a good training ground for the production engineers, and pave the way for volume production of the more sophisticated EV products of minivan and EV SUVs.

Jonway Auto will cut back on the number of gasoline SUV models in order to reduce the overhead costs of carrying too many different gasoline versions. Jonway will focus on its high volume lower cost gasoline model priced at around US$10,000, replacing its 1.6 liters gasoline model with a more cost effective and efficient 1.5 liter engine model. This will be Jonway's mainstream gasoline model.

In the meantime, Jonway auto established its three wholly-owned subsidiaries, namely, Taizhou Selling Co., Ltd. focusing on vehicles marketing and distribution, Taizhou Fuxing Vehicle Sale Co., Ltd. focusing on minivan marketing and distribution in China and Taizhou Vehicle Leasing Co., Ltd focusing on the vehicle leasing business in Taizhou.

BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements include the accounts of ZAP, and its subsidiaries: Jonway Automobile, Voltage Vehicles, ZAP Stores and ZAP Hong Kong for the three and nine months ended September 30, 2014 and 2013 and are prepared in accordance with United States (“U.S.”) generally accepted accounting principles (“GAAP”). Management considers “subsidiaries” to be companies that are over 50% owned or controlled by ZAP,. Intercompany transactions and balances are eliminated in consolidation; profits from intercompany sales, are also eliminated; non –controlling interests are included in equity.

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 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, 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 nine months ended September 30, 2014 and 2013 may not be indicative of the results that may be expected for the year ending December 31, 2014 or for any other future period. These unaudited 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, 2013 filed with the Securities and Exchange Commission (the “SEC”) on April 15, 2014 (our “10-K”).

LIQUIDITY

In assessing our liquidity, we monitor and analyze our cash on-hand 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 and bank facilities from China-based banks for Jonway Auto.

As of September 30, 2014, we had $16.1 million in short term bank loans outstanding on the approved credit line of $41.3 million with credit exposure totaling $19.6 million with four China-based banks. The loans are secured by land and buildings owned by Jonway and guaranteed by related party Jonway Group and shareholder Wang Huaiyi. The interest rates on the loans range from 5.04% to 8.93% per annum and the loans expire at various times through September 2015.

Jonway intends to raise funds to support working capital needs for EV production. If additional funding is available above the amount required for working capital, Jonway may use the additional funds for the testing and homologation of new models and potentially for new EV product molds. Depending upon the amount of available capital, funds may also be used to support the Company's expansion plans, with emphasis on electric vehicle sales and marketing, and new product roll outs. Also our principal shareholder, Jonway Group, has agreed to provide the necessary support to meet our financial obligations through November 14, 2015 in the event that we require additional liquidity. In addition, CEVC (China Electric Vehicle Corporation) would likely renew the convertible note which has been extended to August 2015 . In the event that CEVC decides to call on the repayment, the repayment would likely be paid in full or in part in Jonway Auto shares or ZAP shares unless there is a breach by the Company on the covenant of the convertible note.

We intend to fund our long term liquidity needs related to operations through additional 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.

On September 16, 2014 the Company entered into a Placement Agency Agreement for the purpose of identifying qualified prospective purchasers of the Company's debt and/or equity securities through the private placement of such securities.