CARB Details Its Plan For VW’s $800 Million Settlement In California For EV Adoption

VW electric vehicles

DEC 6 2016 BY MARK KANE 41

CARB - Category 1: ZEV Infrastructure

CARB – Category 1: ZEV Infrastructure

 

CARB (California Air Resources Board) has released its proposals for how Volkswagen could spend its mandated $800 million (40% out of $2 billion nationwide) Dieselgate settlement over the next 10 years in California.

Volkswagen lineup: e-up!, e-Golf, Golf GTE and Passat GTE

Volkswagen lineup: e-up!, e-Golf, Golf GTE and Passat GTE

The $800 million is to be divided into four 30-month spending cycles (of $200 million each), and reviewed annually by a third party.  CARB stresses that it would like to see significant movement in the first 30 month period, and not to ‘back-end’ the deal.

The German manufacturer now needs to present its plan to California regulators by February 22, 2017.

The main goals stated by CARB are:

  • Support transportation electrification
  • Support the next generation of zero-emission vehicles
  • Grow the State’s burgeoning ZEV market
  • Support access to ZEVs, including for low- and moderate-income consumers in disadvantaged communities

Four eligable ZEV investments are:

  1. ZEV Infrastructure
  2. Brand-neutral education and public awareness campaigns
  3. ZEV access improvements for all California consumers
  4. A Green City initiative (for example car sharing)

Because ZEV includes hydrogen fuel cell cars, the infrastructure can also include hydrogen stations, but we believe that most of the funds on infrastructure will be spent on AC Level 2 and DC fast charging.

But most importantly, whatever the money is spent on, it can’t favor VW-specific products, but rather must be brand-neutral for the common good.

We certainly look forward to February and to see actual goals and benchmarks set for this very significant investment in EV adoption in California, and also for the rest of the US.

CARB - Category 2: Education and Outreach

CARB – Category 2: Education and Outreach

CARB - Category 3: ZEV Access

CARB – Category 3: ZEV Access

CARB - Category 4: Green City

CARB – Category 4: Green City

Categories: Volkswagen

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41 Comments on "CARB Details Its Plan For VW’s $800 Million Settlement In California For EV Adoption"

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The question is are they allowed to profit from what they provide? If so they will clearly pick whatever investment they are forced to make that won’t benefit any other automaker.

Category 1:
What benefit do they get if they spend it on infrastructure when all automakers would also benefit from this DC fast charger network? Operating and maintaining a charger network has shown to make very little profit at this point as a stand alone business model.

Category 2:
They would get zero return on this and won’t spend a penny on this unless they are forced to.

Category 3/4:
They will certainly dump it all into EV car-share or ride-hailing businesses that can drive out all these other Uber/Lyft-like startups. It would kill Maven and their partnership with GM. And there could be a decent profit in this business model if they can control the market by killing early the competition that doesn’t have $800 million in capital to invest.

I doubt CA will see thousands of new CCS chargers.

I think the benefit they are getting is that they get to keep selling cars in the states that support CARB. If they don’t do what they are supposed to, then they could get fined or told they can’t sell to CARB states.
That’s also the reason companies put out compliance cars, so they can keep selling in California.

I understand that point. I’m just speculating which category they will go with most if they are forced to do one of them. They will likely pick the one that benefits them the most.

And surely the people who drafted these categories could probably foresee this as well and may have loaded it to what they want implemented.

This isn’t an “investment” by VW. It’s punishment for Dieselgate. They aren’t meant to make a profit on this.

Then the question is who does? You can’t just build out a network of chargers and walk away. Or build a company that operates a car-hailing service and walk away.

Who maintains and manages the investment? Will some CA government agency be in charge of hiring employees for these operations that will operate and maintain the thousands of chargers on the network or run the day to day business of an urban car-sharing or car-hailing service?

This is the key takeaway, “But most importantly, whatever the money is spent on, it can’t favor VW-specific products, but rather must be brand-neutral for the common good.”

So to answer your question “What benefit do they get if they spend it on infrastructure when all automakers would also benefit from this DC fast charger network?”. They don’t have a choice but to make one that benefits all EVs.

Regarding 3&4, it also has to be brand neutral, so I don’t think they can corner a market.

It would be brand neutral as far as the vehicles go but they would own and operate and profit from it. It could be named anything but it would still be owned by VW.

Excellent questions…
As previous misguided effort at building networks showed, you have to provide incentive for proper upkeep and management, and the entity responsible needs to have no other purpose or priority than building/maintaining the network.

They should haVe to pay good charging companies like Charge Point to add more charging. They should not use their company or make 1 penny from chsrging.

I had to look it up. VW is allowed to profit from this settlement.

“EPA enforcement chief Cynthia Giles told lawmakers that, “While Volkswagen remains subject to all applicable laws, there is nothing in the [consent decree] that prevents Volkswagen from obtaining revenue from ZEV-related investments. Unlike the $2.7 billion that Volkswagen must place into a trust that will be administered by an independent trustee for the purpose of reducing Nix pollution, the ZEV investment requirement will be a business investment made by Volkswagen. Volkswagen may see a benefit from mandatory ZEV investments, and that would not be inconsistent with the [consent decree.] Volkswagen could have decided to make these investments even without this enforcement case, but now it is required to do so.”

+1

Thank you for clarifying that.

Thanks for posting that for us.

I think this is a terrible agreement. VW deciding to spend the money how they want “with recommendations” and allowed to profit from it is the worse case scenario for other OEMs and especially independent EVSE companies.

The money can be poorly used and not provide much benefit to consumers (who were damaged by VW).

Get ready for 800V CCS EVSEs surrounding Audi and Porsche’s best sales districts in California. With 80% of the money going to the R&D effort behind it.

I was at the CARB meeting in Sacramento. The question was raised is VW allowed to profit from these investments. The answer was unequivocally YES.

See Phillip D’s post above for detail

For some reason, this doesn’t sound too promising. I want to see more L2 and DCFC infrastructure!

$800 million to be spend in CA alone? It would cost less than half a billion to plaster over the complete US highway system with 50 mile interspaced “superchargers” (based on 157,000 miles of highway and $150K per multi-stal charging station, the number floated for Supercharger cost).

VW should give CA (plus the rest of the US, there is $2 billion to be spend here) what it’s doing in Europe: a network of 350KW capable chargers. Future proof and ready to support its upcoming Porsche Mission E.

Agreed. You want EV adoption? Remember the other 49 states. That’s how you’ll make a difference. Without fail, in Mississippi, the first question I get from people (after “You mean it doesn’t use any gas?), is “Where do you charge it?” We all know that home charging is enough for 98% of the time, but the safety net is needed to convince Joe Blow.

California has adequate infrastructure, Mississippi has 1 DCFC station in the state, and it’s 1 mile outside of Tennessee. If you include home chargers on Plugshare, you get less than 50 L2 stations in the entire state. That’s 1 per 1000 square miles, for L2 stations.

Don’t forget about the other 49 states if you are truly interested in spreading EV adoption. The interest is there, but the infrastructure is nonexistent. And there is a 0% chance the state government has money to invest in it… They can’t even fully fund education.

That’s not how the government works. As Milton Friedman put it, government takes the money, skim a little from the top, and then give the remainder back. In this case, I suspect they’ll skim HUGE off the top for all kinds of junk. As you correctly point out, you don’t need billions to plaster the entire country with DCFC, let alone just CA.

I just hope none of this money goes to fund high speed rail boondoggle.

Friedman probably didn’t believe that man-caused global warming should be stopped because he refused to accept that the victims of capitalist crimes didn’t deserve it. He refused to accept the Great Depression was caused by processes inherent in laissez faire and thus that the New Deal was necessary.
He was an advisor to the Pinochet dictatorship in Chile. He was to blame for the whole deregulation/privatization mentality that is dragging us back to 19th century robber-baron rule today.

Yes, government spending can create wealth better than many forms of speculative private investment. The Congressional Budget Office has detailed the returns on different forms of government spending, with spending on infrastructure and education at the top, and it is ignored by Congress. As for speculative private investment, you know that when the next speculative crash happens, all that evaporates. The way you prevent that speculation is with regulation and taxation – nothing else has worked.

Whatever you think of Friedman, the fact that government takes your money, takes some (or a LOT) for itself, then give back the remainder is true. That skimming has been going up since the day taxes started, and accelerating in recent history. One only has to look at ~$10 billion wasted so far on high speed rail. We could’ve had nation wide EV infrastructure and give away hundreds of thousands EV to poor people to fight pollution, but government decided they wanted to give money to their buddies instead. With so much failures, I don’t know why you insist on giving even more money to them. Have you been to DMV or worse, INS office? As for climate change, I agree with your guess of what Friedman might say. These piecemeal “policies” are not having much effect, and no way we’re going to contain climate change. Just look at all the SUV and truck drivers alone in traffic as you commute. When people can’t even be bothered to get off giant SUV for smaller car for few percent cut in their CO2 emissions, let alone go through the inconvenience of 75% cut in CO2 to effect real change, all these… Read more »

This would be as opposed to private industry, which takes the money, skims a LOT for the executives, then spends the money on payroll and R&D.

When’s the last time private company kidnapped you for years for not buying their product? If private anything takes, that’s theft and they’d be out of business. If same is done by government, it’s taxes, fees, “social security”, and it gets even bigger.

Companies grow, because people voluntarily give their money. Government grows when they take money from people using force. That’s the distinction between capitalism (voluntary) vs socialism (forced).

When’s the last time government poisoned millions because a proper waste cleanup would lower the profit margin by 3%?

When’s the last time government chose to allow an known-unsafe product on the market because the lawsuits would be cheaper than the recall?

When you say “government” takes by force, the important part you are missing is that WE ARE the government. It is the collective action of the electorate. If you want an anarcho-capitalist libertarian utopia, convince your fellow voters to elect officials supportive of that vision.

The Interstate system is not the only part of the road system that need chargers. There are 2.65 Million miles of paved roads in the US. 4.09M total roads. If we assume we only put chargers in the current gaps on paved roads, then 2 Billion MIGHT make a decent difference. If we just put a charger on average 50 miles apart on paved roads, you are pushing $8B. My guess is every 75 miles on interstates only where there are gaps and on secondary road major routes.
I have always thought every gas station should just upgrade a 240V line for a charger (at first) to provide an emergency charge until the network is built out.

Paradigm shift, though. You’d need a gas station a couple miles from home, as a weak proxy for having a gas pump in your garage. EVs need a different thinking, and footprint, where though it may be useful to have 240v at every gas station, the national proliferation is more akin to what Tesla is doing.

supercharge.info

Infrastructure is nice but California’s already got plenty of that. What’s really needed is infrastructure in the non-CARB states. When the entire US is covered the lack of infrastructure argument is gone and everyone benefits.

This portion of the VW agreement (and this story) has to do with California, not other states.

If some flyover state was truly interested in Zero Emission Vehicles, they would adopt the CARB-ZEV rules.

CARB states – Arizona, California, Connecticut, Maine, Maryland, Massachusetts, New Jersey, New Mexico, New York, Oregon, Pennsylvania, Rhode Island, Vermont, Washington, District of Columbia.

CARB-Zero Emission Vehicle states – California’s ZEV program has now been adopted by the states of Connecticut, Maryland, Massachusetts, New York, Oregon, Rhode Island, Vermont and Maine. These states, known as the “Section 177 states,” have chosen to adopt California’s air quality standards in lieu of federal requirements as authorized under Section 177 of the federal Clean Air Act (42 U.S.C. sec. 7507).
Additionally, California’s GHG standards are now spelled out federal law. Washington DC and New Jersey are participating with ZEV initiatives, but are not signatory CARB-ZEV states.

The CARB States constitute appx. 50% of US gasoline consumption.

28% of new car sales.

It would benefit Californians too if they could drive their EVs out of state

The only thing I want to see the money spent in is DCFCs preferably the 350kw ones they are jointly rolling out in the EU…

Anything short of the same 350 kW system of chargers they already announced for Europe is a waste of opportunity.

If you live in California, write to CARB and demand 350 kW chargers. They do listen to comments from Californians, especially those who actually own VW diesels.

Well, you don’t need to demand 350kW chargers that don’t physically exist, but you can demand a build-out or sub-out with the capability of the infrastructure (transformer, conduit, switching / distribution boxes, etc) that has the capability to handle one 350kW charger, in addition to one or more 50-150kW chargers.

Tony’s right on the money. However, what in this process ensures that VW builds dual (or tri-standard) DCFC? The CCS plug is technically brand-agnostic, but omitting CHAdeMO from a new batch of DCFC would certainly imbalance the market…

Both Chadham and CCS are both public and “brand agnostic. There is not a chance the VW will be allowed to leave out CHAdeMO.

Spell checked version:

Both CHAdeMO and CCS are public and “brand agnostic”. There is not a chance the VW will be allowed to leave out CHAdeMO.

CHAdeMO has over 13,000 charge stations in the world, with about 2000 in North America and over 3000 in Europe.

Both CHAdeMO and CCS have specifications for 50, 100, 150 and 350 kW chargers:

50kW = 500 volts max * 125 amps max (really 62.5kW capable)

100kW = 500 volts max * 200 amps

150kW = 500 volts max * 350 amps (2017 launch, really 175kW capable)

350kW = 1000 volts max *350 amps = (proposed summer 2016)

I agree exactly with what Tony said about a buildout with the capability of the future high power infrastructure. That’s really needed for any fast charge infrastructure built nowadays if it’s going to be relevant in the coming years.

350kw is, again, key to the development of fast-charging VW’s luxury line, at 800 volts. They could step-down the DC for others.

Audi upped its “announcements”, lately. True, or not, the infrastructure can complete a compelling package. If they can burn the candle from two ends, eGolfs and Mission E’s, they may discover new or returning high-line customers instead of just the repeaters at the lower margins they’re obsessing about.

I thought it was earlier agreed that the vast majority of the monies was to go to the ‘hydrogen highway’ as I didn’t see much specificity other than having to provide some L2’s and some fast chargers for EV’s.

Per their definition of ZEV, H2 vehicles are the most favored so I’d assume the amount of money we’re talking about for EV related things is minimal. No?

I’m confident that hydrogen lobbies will get a disproportional amount of the VW money, yes.