Profit From Punishment? Volkswagen's Preferred Emissions Penance Faces Criticism From State Officials and Automakers

Matt Posky
by Matt Posky
profit from punishment volkswagens preferred emissions penance faces criticism from

Government officials and automakers are accusing Volkswagen of twisting its emissions-cheating penance to its own advantage. As part of its sentence for equipping over half a million vehicles with defeat devices, the United States is forcing VW to spend billions of dollars on a decade-long program that promotes environmentally friendly transportation and green technologies. The company opted to invest a large part of those compulsory efforts into establishing an EV charging network within the U.S.

However, seven state attorneys generals have urged the Environmental Protection Agency to closely monitor Volkswagen’s course. They contend that such a network would give the company an unfair advantage in the forthcoming electric revolution, allowing VW to profit from its misconduct.

Government officials from both sides of the aisle seem genuinely paranoid that the company could turn the charging network into a potential cash cow but, according to The Wall Street Journal, none have proposed a suitable alternative. A spokeswoman for Rhode Island Attorney General Peter Kilmartin, a Democrat, suggested “concerns remain that [VW] will gain an advantage in the industry despite the company’s past malfeasance.”

Arizona’s Republican-led Office of the Attorney General issued a similar statement. “We continue to be concerned that Volkswagen will be allowed to benefit from a settlement intended to penalize for defrauding consumers,” said a spokeswoman before adding the need for the EPA to “diligently monitor” the situation.

VW’s charging network, while separate from other financial sanctions imposed on the company, is a large expenditure in itself. But it’s also in line with the automaker’s recent efforts to rebrand itself as a progressive and green automaker with a new focus on EVs. An initial $300 million investment outside California will go towards the construction of more than 450 charging stations in 39 states, situated near highways and business centers. Additional investments will be made to bolster the Golden State’s comparatively robust network.

The German automaker says it doesn’t view the stations’ construction as government-approved business opportunity. Instead, it believes its good-faith investment into U.S. infrastructure is highly preferable to continue being fined directly for its past transgressions. It also maintains that its network would only comprise a small portion of North America’s future charging needs — less than 10 percent, it estimates.

“There is a lot of investment that needs to happen. We’re just part of it,” explained Mark McNabb, chief executive of Electrify America, the Volkswagen subsidiary overseeing the project.

But there is a business model in place. VW intends to gain revenue from drivers charged at stations, or through a subscription. Automakers may also be able to purchase unlimited credits with Electrify America on a per vehicle basis. Prices have yet to be specified but a spokesperson from the company explained they will likely fluctuate in tandem with the market. Subscriptions are also likely to be issued on a time-sensitive basis.

Ford has made its position on the network clear, issuing concerns that Volkswagen might design stations without considering other manufacturers’ needs or will take advantage of its customers’ data. “Given the importance of this portion of the infrastructure to [electric vehicle] adoption, Ford has reservations about having a key electrification driver dependent on and ultimately controlled by one automotive competitor,” stated John Viera, Ford’s global director of sustainability and vehicle environmental matters, in a letter to California regulators.

The Environmental Protection Agency has had little to say on the subject but the California Air Resources Board wrote to Volkswagen in May. The letter requested the automaker address rivals’ concerns, plan to install charging stations in lower-income areas, and consider the prospect of servicing hydrogen fuel cell vehicles — which it wisely omitted from the development project.

While Volkswagen’s certainly could manipulate the investment to better serve itself or even corner certain portions of the EV market, Tesla Motors could just as easily be doing the same with its own charging network. The only difference here is the former is supposed to be getting punished while latter is not. Regulators gave Volkswagen the green light and it’s up to them to see that they don’t take advantage.

However, let’s not forget that everything seems to be pointing to VW using standard high-capacity outlets that most automakers are either already using or could easily adapt to. It’s also doubtful that the company would try to swindle the public with its previous offense still fresh in everyone’s mind.

[Image: Volkswagen Group]

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  • Jeff Weimer Jeff Weimer on Jun 06, 2017

    I have no problem with VW trying to make lemonade here.

    • See 1 previous
    • Sjalabais Sjalabais on Jun 07, 2017

      @jeanbaptiste +1, this is getting ridiculous. What is the fine's intention? Bring an automaker with a long history in the US, including a somewhat successful factory, to its knees? Infrastructure investment has been asked for by every politician everywhere, so this is pretty ironic. Force them to use widely available standards for charging, and be happy with it.

  • Speedlaw Speedlaw on Jun 06, 2017

    This is why we still pay a 3% interchange fee for moving money electronically, where places like Africa do it way cheaper on one can agree on a fair standard, everyone wants their standard to win, so they can get licensing fees forever. Apple Pay ? Paypal ? All fail as universal adoption as no one wants the other guy to get the money. All cars get gas from all stations. This is the standard they have to meet. I saw a cell phone charger the other day at a Honda dealer. It had probably a dozen plugs. The HDMI is a great example. Everyone uses it, but only because the Electronics makers made a deal with the content providers. It is cheap to license, but you must support the content protection. If you don't you are sued for violation of patent. HDMI isn't wonderful, it is just the standard they all agreed upon, but they headed off a universal open source DVI standard. The content providers got the hardware makers to do their copyright protection work, and via licensing - contract law to boot. Car makers are nowhere near as incestuous as the Consumer Electronics folks, and electric power isn't anywhere near "content" for the rights holders. Still, you need a universal nozzle. Period. The nonsense where I get the patent and for the rest of eternity get a residual because the plug is a triangle, or has three ovals, or whatever, won't work this time..... There needs to be a USB standard for charging cars. Sadly, I'm sure we will suffer a railroad type gauge war since a lot of very rich interests will do all they can to make sure their standard wins.

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    • Bikegoesbaa Bikegoesbaa on Jun 07, 2017

      @SkiD666 The entire industry standardized on *the same* leaded fuel connector; and then the entire industry standardized on *the same* unleaded fuel connector when external circumstances dictated a change. You can't put gas through a Diesel nozzle for valid technical reasons. The current proliferation of electric charging standards seems much more arbitrary; and appears to be driven by a short-sighted VHS/Beta style desire to control a captive proprietary standard rather than any technical limitation.

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  • ToolGuy Silhouetting yourself on a ridge like that is an excellent way to get yourself shot ( Skylining)."Don't you know there's a special military operation on?"
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