DOJ Settlement on VW Emissions Requires German Automaker to Promote Electric Vehicles

Penny Starr | December 6, 2016 | 11:33am EST
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(AP Photo)

( – Following the revelation early this year that Volkswagen had failed to accurately report its emissions test results for its diesel vehicles, the Department of Justice (DOJ) reached a $14.7 billion settlement with the German automaker that included $2.7 billion to promote education and infrastructure for electric vehicles across the United States.

“The settlement of the company’s Clean Air Act violations … requires Volkswagen to pay $2.7 billion to fund projects across the country that will reduce emissions of NOx where the 2.0 liter vehicles were, are or will be operated,” the June 28 DOJ press release said. “Volkswagen will place the funds into a mitigation trust over three years, which will be administered by an independent trustee. 

“Beneficiaries, which may include states, Puerto Rico, the District of Columbia, and Indian tribes, may obtain funds for designated NOx reduction projects upon application to the Trustee,” the press release said. “Funding for the designated projects is expected to fully mitigate the NOx these 2.0 liter vehicles have and will emit in excess of EPA and California standards.”

The Federal Trade Commission (FCC) described the EV portion of the settlement this way:

“The Clean Air Act settlement also requires VW to invest $2 billion toward improving infrastructure, access and education to support and advance zero emission vehicles,” the FCC press release said. “The investments will be made over 10 years, with $1.2 billion directed toward a national EPA-approved investment plan and $800 million directed toward a California-specific investment plan that will be approved by CARB [California Air Resources Board].  As part of developing the national plan, Volkswagen will solicit and consider input from interested states, cities, Indian tribes and federal agencies.”

But while some critics of the settlement might question the federal agency using the agreement to advance the Obama administration’s agenda on alternative energy, including electric vehicles, some in the EV industry are not happy about it.

“Chargepoint CEO Pasquale Romano says the deal effectively demands that VW dominate the market for charging infrastructure,” an Oct. 17 article published on the Wired website said, noting that the company has charging stations in more than 30,000 locations in the U.S.

“You just handed them $2 billion of Monopoly money,” Romano was quoted as saying in the Wired article.

“Chargepoint isn’t the only victim, Romano says. The settlement specifies that VW cannot do what Tesla Motors did and give its cars a proprietary charger connection with a dedicated network of charging stations for customers,” the Wired article stated. “Beyond that, VW can choose what sorts of chargers it builds (Level 2, fast charging, or other), and where to install them.”

More than 25 businesses involved in the alternative energy and EV industry, in fact, sent a letter to DOJ, expressing their concerns about the settlement.

“We believe it is critical that the settlement funds be administered independently and transparently, distributed in a way that encourages the continued development of a robust and competitive charging and other alternative fuel marketplace, allows drivers significant choice and provides for meaningful administrative oversight,” the letter said.

“As currently drafted, Appendix C leaves open serious questions about how the $2 billion will be administered and what its impact will be on innovations and the continued operation of a competitive marketplace for EV charging equipment and other alternative fuel technologies and services,” the letter said.

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