As part of the $14.7 billion settlement with U.S. owners and regulators over its emissions-cheating scandal, Volkswagen has to log some public service—10 years of it, to the tune of at least $2 billion of investments supporting electric vehicles.
While the settlement lays out how and when the automaker will make good with the U.S. EPA, the California Air Resources Board (CARB) is a separate entity, and it’s getting 40 percent of that make-good cash, or $800 million. So the Golden State has launched into a process of laying some additional ground rules—or at the very least, some strong guidelines—over how VW is to spend that money.
To that end, CARB has put together a list of priorities, which it calls California’s Initial Guiding Principles for VW ZEV [Zero-Emission Vehicle] Investments. Those were revealed last week. Later this week, on December 8, there will be a board hearing. Until December 16, the whole issue is open for public comment.
California-Specific Priorities
The California agency specifies that 25 percent of the funds should go toward programs serving disadvantaged communities. Other California-centric examples include programs that scrap older vehicles and replace them with ZEVs, provide zero-emission transit services, or involve ride-hailing services that serve disadvantaged communities. The agency also asks that VW’s investments “demonstrate corporate social responsibility and a cradle-to-grave sustainable business case.”
Priorities for infrastructure in California include workplace charging points, charging stations for multi-unit dwellings, and solutions that fill gaps in charging infrastructure at public places such as airports and hospitals. CARB also points to projects that might expand ZEV technology to medium- and heavy-duty commercial vehicles. Experiential marketing—ride-and-drive events and displays—is included in the project, the agency notes, as are autonomous-car demonstrations, provided that the autonomous car is a ZEV.
VW Will Fund Nationwide Electric-Vehicle Education
There’s already a lot of structure and accountability built into the settlement as it applies both to California and the federal government. The money can’t cover projects that are directly to the benefit only of VW—such as placing chargers at its dealerships. And VW can’t spend less than $25 million or more than $50 million of it on “brand-neutral media activities” for ZEVs—such as websites, print ads, maybe even radio PSAs. And any programs that increase public exposure to ZEVs or put them into an underserved area through rental fleets or car sharing need to be approved in writing by the EPA.
The hefty Consent Decree—the document that details all the settlement provisions—also requires an ankle bracelet of sorts: VW must make annual National ZEV Investment Reports that update the federal government on activities and projects, spending, and utilization rates for the new infrastructure.
So far, this is only part of the settlement, applying to Volkswagen’s four-cylinder diesels. In late November, U.S. District Court Judge Charles Breyer delayed a hearing over the other engine, Audi’s V-6 TDI, which was used in about 80,000 VW, Porsche, and Audi vehicles in the United States—because the delay “may produce a resolution of the outstanding issues.”
Volkswagen must provide its Draft ZEV Investment Plan to California by February 22, 2017. Whatever form it eventually takes, it’s a sure bet that VW’s dirty diesels will end up financing major public initiatives promoting EVs.
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