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Overdue federal regulations force low-volume replica car builders to delay production

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DeLorean factory in Humble, Texas. Image via Google Maps.

By now, two years after the passage of the Low Volume Motor Vehicle Manufacturers Act, architects of the legislation had hoped to see assembly lines rolling and brand-new old cars driving on the street. Instead, a holdup from the Environmental Protection Agency and the National Highway Traffic Safety Administration has kept more than a dozen dozen companies from starting production.

“Everything’s on hold,” said Steve Contarino, who has plans to revive the Checker under the law. “There’s really not a lot that anybody can do.”

While the Low Volume Motor Vehicle Manufacturers Act – technically incorporated into a highway funding bill that became law in December 2015 – permitted companies building less than 325 replica vehicles per year to go ahead and install complete drivetrains in their vehicles without going through crash testing, emissions certification, and other procedures required of any complete vehicle builder, the law did come with a couple caveats.

First, the law restricted low-volume vehicle manufacturers to EPA- or CARB-certified current model year engines starting in 2017. Second, it instructed both the EPA and the NHTSA to issue regulatory guidelines for the low-volume vehicle manufacturers within 12 months of the law’s passage.

According to Stuart Gosswein, the senior director of federal government affairs for the Specialty Equipment Market Association, while it’s possible for low-volume manufacturers to use any EPA-certified production engine package, it would be far easier to use an engine package exempted by CARB. However, only one engine package – GM’s LS3 – currently benefits from a CARB exemption order. In addition, as SEMA has since discovered, CARB’s exemption order program only applies to constructed vehicles, not to manufacturers, something CARB officials are reportedly in the process of addressing via new regulations.

Also, while the EPA has reportedly prepared draft guidelines, the NHTSA has not, Gosswein said.

“It’s the bureaucracy… this hasn’t been the highest priority for them,” Gosswein said. “Our perspective is that the law is prescriptive, and that all they need to do is set the process for registration (as a low-volume replica car manufacturer) and for compiling reports.”

Compounding the bureaucratic delays, according to Contarino and other low-volume vehicle manufacturers waiting for those guidelines, are the recent delays in filling critical positions, atop the NHTSA in particular.

“The NHTSA has a lot on their plate – they’re still dealing with the airbag issue and now autonomous cars – so we certainly don’t fault them,” said Jim Espey, vice president of the De Lorean Motor Company. “The people at the NHTSA are just as frustrated as us, and they realize we’re in this position, but their hands are tied as much as ours are.”

Gosswein said the NHTSA expects to issue its draft regulations by late spring. The regulatory process, which includes a public comment period, will then push the finalization of those regulations back to late 2018 at the earliest, meaning any low-volume manufacturers are looking at early 2019 as the soonest they can start manufacturing. However, Gosswein said SEMA representatives have asked the NHTSA to allow low-volume replica car builders to begin production earlier than 2019 on a provisional basis.

Contarino said that he, like many other carbuilders interested in taking advantage of the Low Volume Motor Vehicle Manufacturers Act, has finalized his design and lined up suppliers to make it happen, but doesn’t want to go forward with production until he sees the EPA and NHTSA guidelines to ensure his design meets those guidelines.

“You wanna make sure your design is right the first time,” he said. “They could issue a regulation that you just can’t meet or that  would make it cost more to meet the guidelines.”

In the meantime, he and Espey both said it’s difficult to keep suppliers committed to their projects.

“You start to lose your credibility when it’s a year later and they ask if it’s ever gonna happen,” Contarino said.

Espey noted that he’s already missed two windows for long-lead tooling on one item he’d need to commence production. “The supplier said ‘Are you real, or are you jerking us around?'” Espey said. “The De Lorean brand name does a lot to open doors with suppliers, but it won’t do much to keep those doors open.”

Gosswein said no companies have dropped their plans to produce replica vehicles under the new law, but many are “juggling” or putting their plans on hold, thus postponing any planned spending and hiring.

Rather than do nothing while waiting for the NHTSA guidelines, Espey said De Lorean is currently pursuing certification as a low-volume manufacturer in the European Union, “where they have longer experience and more understanding of the low-volume manufacturing industry.”

Contarino said he could conceivably offer his resurrected Checkers as kit cars – complete minus the drivetrain – but that’s not a business model he wants to pursue, so he’s decided to simply wait for word from the NHTSA.

“Hopefully our suppliers hang around,” he said. “It may be that some will fall off the wagon.”

Among the other manufacturers to publicly announce they will build replica vehicles under the Low Volume Motor Vehicle Manufacturers Act are Revology, Factory Five, Superformance, and Craig Corbell’s revival Cord.

The NHTSA did not respond to a request for comment before publication of this story.