Battle over VW's $2 billion fund for electric-car charging: sorting out the questions

BMW i3 and Volkswagen e-Golf electric cars using Combined Charging System (CCS) DC fast charging

Enlarge Photo

Yesterday, federal judge Charles Breyer signed the final agreement committing Volkswagen to buy back or modify the 465,000 TDI 2.0-liter diesel vehicles that are the main focus of the VW diesel scandal.

As part of that settlement, Volkswagen has also committed to providing $2 billion in funds to install charging or fueling infrastructure for zero-emission vehicles.

The clock now starts ticking on a 120-day deadline for the company to submit its initial plan for spending that money over the next 10 years, starting with activities proposed for the first quarter.

DON’T MISS: Final VW diesel settlement signed; buyback offers to start soon

There’s already been a fair amount of debate over what those funds should be used for and how they should be administered, both from charging network company ChargePoint and electric-car advocates.

ChargePoint, in fact, filed an amicus brief to prevent approval of the overall Volkswagen settlement without changes to the language of the sections that govern that $2 billion fund.

(A separate second fund, of $2.7 billion, will pay for projects to offset the excess emissions from the various VW diesel vehicles involved in the scandal. If an individual state chooses to do so, up to 15 percent of those funds as well can be designated for zero-emission vehicle infrastructure.)

Electric-car charging stations at Target in Fremont, CA [photo by Wilson F. via ChargePoint Network]

Enlarge Photo

ChargePoint’s brief was accepted by the court. The company’s CEO, Pasquale Romano, issued a statement following Judge Breyer’s signature that said: 

ChargePoint welcomes the $2 billion of spending in EV infrastructure, access and education that will come as a result of Appendix C of the settlement with Volkswagen.

We are also encouraged that dozens of interested parties—including automakers, environmentalists, consumer groups, policymakers and companies in the electric vehicle industry—voiced their concerns during the settlement process and raised important issues, including the level of regulatory and industry oversight for how the funds will be administered to ensure maximum positive impact for all EV drivers. 

ChargePoint is disappointed that the court did not address these concerns in its latest ruling. We look forward to working collaboratively with those committed to the future of EV transportation to see that the settlement is implemented in a way that supports innovation, customer choice and a competitive marketplace.

ALSO READ: Volkswagen Diesel Scandal – all our stories

The full language approved yesterday to cover the establishment of the $2 billion fund can be found in Appendix C of the settlement documents.

Among the concerns raised by ChargePoint, advocates, and others have been the following.

Some are easily answered, others less so.

Infographic for 100 CCS fast-charging stations to open during 2015, funded by BMW, VW, ChargePoint

Enlarge Photo

(1) Why should Volkswagen be in charge of developing the plan?

This is a very good point for debate, though the most likely answer is Machiavellian: because it gives the company an incentive to do it right.

Central administration clearly helps to move the entire national network to a common experience, so that it doesn’t fall prey to a “hodgepodge of different vendors and different user interfaces,” as one advocate put it.

Just ask any electric-car driver who carries three to six different access cards for the various different and incompatible charging networks in any given region.

And the question can be flipped around: what other entity or group should draft and execute the plan?

CHECK OUT: Partial Consent Decree, Appendix C (“The ZEV Investment Commitment,” page 147)

A for-profit company developing a plan has the advantages of focus and speed, which seems rather less likely under a system like that proposed by advocate Tom Moloughney in a long and impassioned blog post last week.

He suggests the funds should be administered by “an independent council appointed to oversee the infrastructure fund implementation, so as to not skew the marketplace. There should be appointees from various industry stakeholders, EV advocacy groups, like Plug in America, The Sierra Club, Clean Cities Coalitions, etc.”

The agreement contains language that requires VW to submit regular reports on its activities, and submit to oversight for the entire term of the settlement.

Meanwhile, very quietly, VW Group of America’s headquarters in Herndon, Virginia, has already been interviewing and hiring staff for the project for a few months now.

One respected executive who spent much of the past decade heading a carmaker’s infrastructure efforts has already been hired. Many others, from carmakers, equipment providers, network operators, and environmental groups, are presently interviewing.

Nissan Leaf electric car with eVgo quick charging station. [courtesy eVgo]

Enlarge Photo

Given that VW had only a few U.S. employees with deep EV infrastructure experience, it is to be hoped that the staff it hires will bring its collective knowledge and battle scars to provide the diversity of views required.

(2) Why should Volkswagen end up owning some or all of the infrastructure?

It’s easy to understand the anger of environmental and electric-car advocates at the idea that VW Group should be penalized, to the tune of $2 billion, for violating U.S. emission laws—only to be able to spend the fine on building an asset it will own.

As with the previous question, however, it’s not immediately clear what successful models there have been for the alternative, which would presumably be distributed ownership, operation, and maintenance of the resulting assets.

And in this case, there’s at least one precedent—albeit one that was equally controversial at the time it was approved.