How Will Dieselgate Money for Electric Cars Be Spent?

Volkswagen e-Golf charges at solar station on Point Lookout, Long Island
Various industry players have ideas about how Dieselgate money for electric cars like the e-Golf should be spent. | Source Eric Schaal/Autos Cheat Sheet

It’s election year, so you’re bound to hear ideas about “how to spend the money” from all sides. Reduce the size of the military, some say, and take care of America’s own instead; eliminate redundancies, others say; while still others suggest building a massive wall along the southern border.

There are almost as many suggestions about how to spend all that Dieselgate money regulators plan to collect from Volkswagen.

While being flogged to the tune of $15 billion, VW agreed to pay some $2.7 billion of that money to address air-quality problems exacerbated by its deceptive diesel-engine activities. According to reports, a separate $2 billion would go specifically to advancing the cause of zero-emissions vehicles in America.

Go Ultra Low Nissan LEAF on charge on a London street. Ultra-low emission vehicles such as this can cost as little as 2p per mile to run and some electric cars and vans have a range of up to 700 miles.
Public charging stations should get a boost on all sides, say members of the EV ecosystem in a letter to the DOJ. |  Miles Willis/Getty Images

Before the EPA and CARB earmark that cash in a plan authored by Volkswagen, various industry players are suggesting ways it should and should not be spent.

According to a report by Reuters, 28 companies invested in the electric car ecosystem sent a letter to the Department of Justice in hopes of ensuring the money be spent “to benefit drivers in California and across the nation” rather than “enable [Volkswagen] to enter or influence the markets for EV charging and fueling equipment and services.”

The signers included top EV station provider ChargePoint as well as the industry group Electric Vehicle Charging Association.

Go Ultra Low Nissan LEAF on charge on a London street. Ultra-low emission vehicles such as this can cost as little as 2p per mile to run and some electric cars and vans have a range of up to 700 miles.
Dieselgate money for electric cars could be spent on chargers for apartment buildings and workplace parking lots. | Miles Willis/Getty Images

In order to avoid such a fate, the group urged for the appointment of an independent administrator who could see beyond warring business models and do what was best for the plug-in car industry. While there are certain to be complaints no matter how the money is spent, the group considers this idea the best way to prevent Volkswagen from making a profit on what was supposed to be a penalty.

The concern is valid. Corporate penalties have had a way of losing their sting after making their way through the accounting departments of the worst offenders. In a study reported by Frontline, the U.S. Public Interest Group found the biggest wrongdoers in corporate America ended up paying just $32 billion of what was supposed to be $80 billion in fines.

The other $48 billion ended up a write-offs, costing the Treasury $18 billion in tax revenue. (From this brief summary one can see the roots of Bernie Sanders’ candidacy for President.) As it stands, the $2 billion set aside for electric vehicle infrastructure will be handled by Volkswagen itself under the oversight of the EPA and California regulators.

A Passat GTE is presented at the Volkswagen Group Night show on October 1, 2014 in Paris prior to the opening on October 2 of the Paris Auto show 2014 Press days. AFP PHOTO ERIC PIERMONT (Photo credit should read ERIC PIERMONT/AFP/Getty Images)
The plug-in Volkswagen Passat has not made it to the U.S. | ERIC PIERMONT/AFP/Getty Images)

While no U.S. regulators have been soft on the Volkswagen thus far in the proceedings, there may be ways for the automaker to steer the technology in a direction that would be more beneficial to its future interests, which may or may not be disclosed at the time.

Yet there are certain ways to ensure improved EV infrastructure, the group said in the letter to the DOJ seen by Reuters. Among them were installing chargers in workplaces and apartment buildings while offering incentives to employers and builders who’d have to do the work.

A more robust network of public chargers serves a dual purpose: allowing EV drivers to charge while increasing exposure for the technology. Advocates for a better electric car market in the Northeast have pointed to the importance of visual reinforcement.

The more people know about electric cars, the more they tend to like them. Volkswagen has not had a strong presence in the U.S. plug-in space to date, so the group behind the letter may have a valid concern. After such flagrant violations and public celebration by regulators behind the settlement, we hope their voices are heard when the money finally gets spent.

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