Electric Motorcycles & Bikes

The first products to be commercialized are electric bikes and motorcycles ("e-bike"). Extensive market research, which is ongoing, was conducted in 2006 and the e-bike division commenced production and sales in early 2007. With current annual capacity to produce 200,000 e-bikes, and a second facility going into production in 2008, the Company plans to significantly grow sales to more than 260,000 units for fiscal 2008 versus a total of over 50,000 units expected in 2007.

Our e-bikes are segmented in two categories:

Red Sea

Manufacturing Facility: Wuxi, China
Production Capacity: 200,000 e-bikes per annum

This product line up consisting of approximately a dozen models is comparable to the top end of the current e-bike market in China. However, ZPP benefits from superior design characteristics, strong brand recognition and large national distribution network of the Zongshen Industrial Group. In 2007, the first year of production for this product line, the Company plans to sell an estimated 50,000 units with unit sales expecting to top 130,000 units in 2008.

Blue Sea

Manufacturing Facility: Chongqing, China
Production Capacity: 200,000 e-bikes per annum

The Blue Sea product line scheduled for launch during the first quarter of 2008, will have a set of unique advantages and characteristics thus representing ZPP's premium brand of e-bikes. This product line will operate with ZPP's patented battery technology using lighter and faster charging lithium battery in conjunction with the traditional lead acid battery operated in all current e-bikes including the Company's Red Sea e-bikes. ZPP's patented micro-chip processor boosting system enables the e-bike to transfer power between the two batteries seamlessly, while providing a significantly longer travel range, two-wheel drive system for increased torque and superior components.

Blue Sea e-bikes sales are expected to generate higher sales and profit margins due to their proprietary characteristics. ZPP expects Blue Sea sales to exceed 130,000 units in fiscal 2008 with strong growth carrying into 2009 and beyond.