Dykema Gossett PLLC
What has three wheels, a seat, a motor, and can go 22mph? It’s no joke. The explosive growth in the market for small electric vehicles means the classification of new vehicle types is critical to defining legal and business risks. And given the inconsistency across various federal, state, and municipal vehicle regulations, the answer may depend on which government entity you ask.
Once considered toys, vehicles like electric scooters have grown into a billion dollar international industry. The popularity of “micromobility” has led to an explosion of vehicle form factors being designed and manufactured for adult consumers. The possible configurations seem endless. Two, three, or four wheels? Battery powered, solar, gas, or hybrid? Pedals? Seat? Handlebars? Steering wheel? Covered? Cargo extension? Child seat?
If you can imagine it, someone is probably building it (or at least pitching the design to investors). And the additional layers of software, firmware, screens, and IoT devices that are being added to these vehicles is making the technology more complex. This has forced the federal, state, and local governments to take notice, especially as shared micromobility operators have become a mainstay in U.S. cities.
Until recently, micro-vehicle classification was pretty straightforward. In most cases, a vehicle was clearly either a “motor vehicle” regulated by the National Highway Transportation Safety Administration (NHTSA) or a “consumer product” regulated by the Consumer Product Safety Commission (CPSC). Cars, motorcycles, and motor-driven cycles (aka mopeds) are in the motor vehicles category, and bicycles and other recreational vehicle for kids have been considered consumer products.
But the emergence of micromobility has rendered vehicle classification more challenging. In the past few years, a proliferation of electric mobility devises have entered the market that do not fit neatly into traditional vehicle definitions in federal and state statutes. In response to these trends, states and municipalities have passed new laws governing micromobility; and definitions from other quasi-regulatory authorities and engineering standards organizations like SAE only further add to the legal confusion.
Fortunately for vehicle manufacturers, the federal landscape has not changed significantly, even as the NHTSA and CPSC have taken further interest in micromobility.
Both the NHTSA and CPSC are charged with the safety and manufacturing regulations for mobility devices as well as defining and enforcing testing specifications, labelling, and sales. When it comes to transportation, NHTSA is the regulatory heavyweight and has jurisdiction over traditional cars and trucks in addition to mopeds and Low Speed Vehicles (colloquially known as golf carts). NHTSA mandates that all motor vehicles comply with Federal Motor Vehicle Safety Standards (FMVSS) standards that meet specific testing requirements. And while manufacturers may self-certify, penalties for non-compliance are significant. NHTSA allows vehicle manufacturers to request exemptions from FMVSS, but this process can be expensive and lengthy, so it has historically been used most frequently for small vehicle companies.
CPSC has jurisdiction over micromobility products that NHTSA does not consider to be motor vehicles, including bicycles, electric scooters, hoverboards, and ATVs. For decades, the CPSC has had dedicated hardware specifications for standard bicycle parts, including handlebars, pedals, seats, and chains. Further, electric bicycles are defined at the federal level as two or three-wheeled vehicles with operable pedals, an electric motor of 750 watts or less, and a maximum speed of under 20mph; they are not motor vehicles by statute. Notably, there are no prescriptive standards for any other micromobility vehicle. CPSC relies on its investigation and recall authority to ensure safety for these categories.
Still, there are micromobility vehicle configurations that exist in between CPSC and NHTSA territory. For example, NHTSA has historically held that high-speed “motorized” bicycles are motor vehicles and therefore subject to NHTSA regulations as mopeds. Although micromobility is a new term, companied have tried to develop these tweener vehicles for decades. In response to letters from interested parties, NHTSA had issued guidance on some of these vehicles in the form of published Legal Interpretations.
For example, in 2008, the company Crow Cycles asked NHTSA about the status of a proposed vehicle that had standard bicycle components and a 36cc throttle engine with a max speed of 28mph. Despite the fact that some pedal-assist bicycles can achieve speeds well in excess of this speed, NHTSA determined the vehicle was a motor vehicle.
Unfortunately for today’s micromobility designers, the NHTSA interpretations on these tweener vehicles are not entirely clarifying. Many are dated, have been overruled, and are inconsistent.
Nevertheless, reviewing the NHTSA interpretations provides some general guidelines to follow. NHTSA has stated that a vehicle's speed capability is an important, although not conclusive, factor in determining whether a two- or three-wheeled vehicle is a motor vehicle, setting a near de facto 20mph (32km/h) limit (at least for “high-speed” motorized bikes). If a vehicle's maximum speed is capped by a speed-limiting governor, the agency would consider the vehicle's underlying speed unless the governor is installed by the manufacturer and not easily removable or defeatable. This issue will be of particular interest in the coming years as speed limiters today are typically software enabled, which NHTSA may or may not conclude are easily removable depending on the circumstances.
Regardless, a vehicle with a max speed exceeding 20mph will be excluded from the definition of “motor vehicle” by NHTSA if it is manufactured primarily for off-road use. NHTSA will look to whether the vehicle has equipment like headlights, a horn, turn signals, and a mirror, as along with other factors including the promotion, marketing, and sale of the product. But ultimately, NHTSA will focus largely on how consumers actually use the vehicle in the real world. If a vehicle is used on public roads on a more than incidental basis, the product will likely be considered a motor vehicle.
Micromobility vehicle classification is further complicated by the myriad state and local laws. As a general rule, states have the authority to govern the licensing and use of all vehicles. States may even mandate additional hardware requirements (e.g., lights) provided they do not conflict with federal agency standards. Moreover, the classification and identification of e-bikes, scooters, and mopeds varies widely by state, thus creating “conflicts” with the federal electric bicycle definition. And NHTSA has been clear that state laws are not instructive when making federal vehicle classifications.
For example, a state may define an “electric bicycle” as any vehicle with two wheels and a maximum speed of 25mph, thus making any motorized vehicle under that criteria street legal. However, a vehicle manufacturer who intends to sell vehicles to consumers in the U.S. must still abide by federal regulations. In this case, that could mean following CPSC or NHTSA standards regardless of the state law.
While state and federal governments have tried to adapt laws and policies in response to the micromobility revolution, some grey areas still exist. Prior NTHSA guidance suggests that throttle-only bicycles that can exceed 20mph are likely to be considered mopeds. On the other hand, electric scooters lacking seats that are operated in a stand-up mode have not been considered motor vehicles. Unfortunately, the NHTSA interpretations that form the basis for these interpretations are more than ten years old and do not reflect the current vehicle technology.
Clearly there is a need for updated regulations and guidance that take into consideration today’s consumer expectations, micromobility culture, and anticipated use cases. In the meantime, micromobility product manufacturers must carefully consult federal safety standards to determine whether their vehicles are consumer products under CPSC, motor vehicles under NHTSA, or both.
For more information about the legal landscape around micromobility, check out Jesse’s Micromobility: Emerging Legal Issues program, available from PLI Programs On Demand.
Jesse S. Halfon is an attorney in Dykema Gossett’s Automotive and Products Liability practice group. Mr. Halfon is experienced in managing electronic discovery for class action and products liability cases. He has also managed caseloads at prior firms and corporations including involvement in all areas of case development and strategy, conducting jury and bench trials, and drafting of pleadings and arguing evidentiary and dispositive motions.
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