Thursday, December 22, 2016

Volkswagen Settlement Billions to Jolt EV Industry

A Volkswagen e-Golf charges in a parking lot. Some analysts worry that the terms of Volkswagen AG's settlement — which call for the carmaker to inject $2 billion into the electric vehicle market — will give VW a leg up on its competition. (Photo Credit: Volkswagen) Click to Enlarge.
The billions Volkswagen AG is required to provide to electrify transportation as part of its emissions scandal settlement will boost, and in some cases displace, a nascent industry.

Volkswagen will invest $2 billion over the next 10 years on zero-emissions vehicle charging infrastructure, public education, and ride-sharing to spur sales of clean cars and counter the environmental harm caused by its cheating of emission tests.  States can also spend part of a separate $2.9 billion mitigation trust fund set up by the settlement to curb air pollution from diesel vehicles on electric vehicles and charging infrastructure.  California has required Volkswagen to introduce and sell new EVs, including SUVs, and help pay for some incentives in the state.

The influx of cash will jolt a burgeoning movement that has so far struggled to push clean car sales to the levels expected or required.

California mandates that zero-emission vehicles (ZEVs) make up 15 percent of the cars on the road by 2025, but they make up 3 percent now.  Nine other states have signed on to California's policy, but ZEVs make up only 1 percent of sales nationally.

Analysts say that in the early years of the investment, Volkswagen could nearly double the money spent on construction of EV charging infrastructure, seen as a way to spark more sales. States, cities and private companies are scrambling to get a piece of the Volkswagen pie.

"It's just so much money," said Ashley Horvat, vice president of strategic initiatives at PlugShare, an EV charging firm.  "It will lay the groundwork for the future, and everybody is waiting to see how they fit into that future."

But critics say the money could also displace current efforts and hamper the ultimate effectiveness of the infrastructure.

"Where there's opportunity, there's peril," said Max Baumhefner, an attorney for clean vehicles and fuels at the Natural Resources Defense Council.

A little more than a week after Volkswagen requested ideas from states and others about what to do with its investment, there are already signs the incoming cash is altering plans.  States and cities are recommending near-shovel-ready projects they've worked on for years with contractors to Volkswagen.  Ratepayer advocates are urging the reconsideration of utility proposals to build out EV charging infrastructure.

"The headline $2 billion investment could potentially displace a much larger investment by the electric industry that could be a more sustained investment if there is not coordination and strategic partnership," added Baumhefner.

Alex Keros, the manager of vehicle and advanced technology policy at General Motors, called the cash a positive "vitamin B shot," but said it "doesn't get at the long-term question" of how to best develop the EV industry.

"We don't have to go sue somebody to get us a bunch of money to put in this stuff," said Keros of EV charging infrastructure.  "It's a great opportunity for the EV industry, and we need a long-term plan, a sustainable plan for infrastructure growth, that brings benefits to all."

Read more at Volkswagen Settlement Billions to Jolt EV Industry

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