The Flawed Volkswagen Dieselgate Settlement & How to Fix it

While I typically keep a narrow focus on the content of this blog, that being to obsessively cover the BMW i3 electric car, occasionally I'll post something if I feel it has particular importance to the electric vehicle industry as a whole. Such is the case with this entry. For those of you unfamiliar with the Volkswagen "Clean Diesel" scandal, it basically amounts to the fact that Volkswagen cheated the emission testing in place and flooded the market with highly-polluting vehicles that were improperly called "Clean Diesel".

As a result, the Volkswagen Group was fined a record amount of money and forced to buy back or fix nearly half a million cars in the US which were operating in conflict with US emission laws. As part of the penalty, Volkswagen was ordered to pay a 2 billion dollar penalty, which would be used to fund zero emission infrastructure, and improve access to ZEVs.

On face value, the proposed Dieselgate settlement initially seemed like it might provide the monumental boost to public electric vehicle charging infrastructure that many have been waiting for. The Volkswagen Group has agreed to pay $14.7 billion for intentionally deceiving the public, and selling “Clean Diesel” vehicles that emit up to 40 times the legal limit of certain pollutants. There are three parts to the settlement:

• Buybacks and financial settlements to owners of 466,000 affected vehicles: $10.0 billion

• Compensation for the illegal cars' environmental impact: $2.7 billion

• Fund new infrastructure and access for zero-emission vehicles: $2.0 billion

However, as the October 18th court date approaches at which time U.S. District Judge Charles Breyer is set to decide whether to grant final approval to the settlement, the details of the infrastructure part of the settlement are, to say the least, concerning.

As it stands now, the Volkswagen Group will have little oversight as to how they spend the 2 billion dollars earmarked for infrastructure and improving access to ZEVs. (CARB will be reviewing and approving the California projects and the EPA will be doing the same for the rest of the country) I question why Volkswagen will have ANY discretion as to how the penalty funds are spent, let alone near complete control over it. Volkswagen isn’t in the electric vehicle infrastructure business. In fact, they are barely in the electric vehicle business as it is today. The only OEM that I’d actually trust to do infrastructure implementation properly would be Tesla, because their business model depends on it, and they’ve been doing it very successfully for half a decade already.

What if Volkswagen decides to start their own EV infrastructure company and use the funds to pay their own subsidiary to manufacture and install the equipment? (*EDIT: I've since read the full proposed transcript and I don't believe they could actually do this, so that's one good thing) We could end up with substandard equipment, and a network that has poor customer service, inadequate repairs and outrageous pricing models. Even if they were to do it right, and the company was successful, why should Volkswagen benefit from the penalty? What if they offered free charging for the first couple years so they could put all the competition out of business and then raised the prices to unreasonable levels? Indeed, you could do a lot of damage with 2 billion dollars and this settlement doesn’t provide any safeguards against that in its current form.

A ChargePoint DC Fast charger rapidly filling up my BMW i3s battery

Last week ChargePoint asked the courts to intervene, and Judge Breyer accepted the plea. It’s ChargePoint’s position that the way the settlement is currently constructed, Volkswagen is “solely responsible for every aspect of selecting the National (ZEV) investments…including timing and locations”. Among concerns that Volkswagen isn’t experienced enough in the electric vehicle infrastructure business to have sole discretion over sure a large fund, Chargepoint is also concerned that Volkswagen will have too much say over the future of electric vehicle charging. Since the amount of funds available in the fund is so great, Volkswagen could dictate the fate of many of the existing companies and decelerate advancements, often fostered by fair competition: “If the settling defendants become the sole source for electric vehicle infrastructure, it will stifle innovation in industries designed to support electric vehicle recharging.”

I have to agree with Chargepoint on this issue. I don’t believe it’s in the best interest of the electric vehicle industry to allow Volkswagen to have sole discretion over how to spend these funds.

Personally I’m not rooting for ChargePoint over Car Charging Group, or for EVGo over Greenlots, etc. I believe the market will sort that out, and eventually the stronger networks which provide the best equipment and customer service will emerge as the dominant forces. However, the enormity of this settlement could have the opposite effect, and allow VW to crush the competition before the natural evolution and survival of the fittest has time to take effect. If the stronger companies of today aren’t even allowed to bid on projects funded by this penalty, they could end up dying before they have the chance to flourish and provide the marketplace with superior products and services.

I’d like to see 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. Let the council decide how the money is spent and always offer open, competitive bidding taking in consideration more factors than simply the lowest bid. The council will be much more effective than Volkswagen could ever be, and we'll probably get more robust equipment and better customer service as a result.

Volkswagen should not have near complete control over the money they were fined. They’ve proven beyond any reasonable doubt that they cannot be trusted when it comes to clean air initiatives. There’s too much at stake here. We have an opportunity to really advance the proliferation of electric vehicle charging infrastructure in the US, and provide the industry with a much-needed boost. This settlement should be modified to allow competitive bidding for all projects, to follow a master plan for national electric vehicle DC fast charging, and to add proper oversight and transparency.

VW: Das-eption and the path to Redemption

Volkswagen CEO Martin Winterkorn resigned on Wednesday.

While this blog's primary focus is the BMW i3, I occasionally sprinkle in some featured EV products and discuss topics not necessarily i3-centric, but are instead just general electric vehicle information. In light of the recent revelations that Volkswagen has been deliberately cheating on emissions testing for many years now, I wrote the following article for Green Car Reports.

So far, no other automaker has been caught as VW has - with proof that they purposely installed a "defeat device" on the vehicles so the cars would curb their emissions only during actual emission testing. However it's fair game to speculate if other OEMs may also be exposed as cheaters now that the EPA knows what they have to look for, and how to expose it. It will certainly be interesting to watch this all unfold.

In any event, Volkswagen is going to face huge fines for intentionally violating Federal emission standards and I wanted to offer my thoughts on how I believe some of that money should be used. If we don't use at least a portion of that money to help reverse the damage done by these heavily polluting "clean diesels", I believe we will have missed a great opportunity to improve the quality of air we all breathe.

 How VW Can Atone For Diesel Deception: Electric-Car Advocate's Thoughts

The full impact of Volkswagen's diesel-emission cheating scandal has yet to be realized, but what it has apparently already admitted to doing could result in the largest civil fine ever levied by the Federal government on an automaker. And that's just the beginning.

Besides paying civil penalties, and coping with a spate of criminal actions, and class-action lawsuits, and investigations by multiple levels of government, VW also needs to deal with the 482,000 cars it sold--plus more in limbo at dealers--that clearly do not comply with emission laws.

In real-world use, these vehicles emit 10 to 35 times the allowable legal limit of certain pollutants, so they're not just slightly out of compliance. They will need to be modified to comply, or VW will have to buy them back. And if owners don't like the modified cars, they'll likely have to buy those cars back too.
After all that, VW has to figure out how to regain the trust of the public.

There are lots of aspects to this debacle, and all will undoubtedly be discussed ad nauseam over the coming weeks. But the aspect I find most interesting is how Volkswagen can best right the wrongs it has done. How does paying fines, settling lawsuits, and bringing highly-polluting vehicles into compliance really undo the damage done? It doesn't. All it does is punish Volkswagen. And I believe the public deserves more.

Make no mistake: If VW is guilty as charged, it absolutely deserves to be punished--and severely.

It turns out they aren't as clean as we were told - not nearly, actually.

But I hope the Justice Department also considers what can be done to offset the damage to air quality created by the offending so-called "clean diesels." And I hope VW, separately, does the same. We've seen penalty estimates as high as $18 billion dollars (the maximum allowed of $37,500 per vehicle for intentionally violating the Clean Air Act. I doubt the actual penalty will be anywhere close to that, but it will likely be in the billions. I think it's not unreasonable to expect the fine to be somewhere around $2.5 billion, or about $5,000 per non-compliant vehicle sold.

Why not use a portion of that civil fine to invest in a nationwide DC Fast Charge network for electric vehicles?

If just half of a $2.5 billion fine were dedicated to this purpose, we could blanket the majority of Interstate highways and major high-traffic corridors with DC fast chargers that would make switching from gasoline and diesel cars to zero-emission electric vehicles a much easier decision for many buyers. Here's why I believe that is what should be done. Helping to advance the proliferation of cleaner electric vehicles would, over time, more than reverse the emissions damage that has been done, and further improve the quality of air we breathe, instead of just punishing the offender. And shouldn't that really be the goal here?

A second thought: As well as using the fine to build out a national DC fast-charging network, how about Volkswagen getting out in front of this crisis itself and telling us how it will do its part to help clean the air it polluted?

BMW, Volkswagen and ChargePoint teamed up to create "Express Charging Corridors" on the East and West coasts. While it's a good start, much more fast charge infrastructure is needed to allow the average electric car of today to be a viable choice for long distance driving.

Rather than just declaring that it will be a leader in electric mobility, as the company has done before, show us the proof that it's serious about how it plans to expand its zero-emission vehicle offerings? VW Group could combine that with a generous investment in public charging infrastructure, on a much greater scale than last December's partnership with BMW and ChargePoint to install approximately 100 DC fast chargers.

That program in just now starting to get under way, but it's really only the beginning of what's needed. VW should commit to expanding it to 400 or 500 stations, including high-volume corridors not only on the East and West coasts but across the country--essentially following the Tesla Supercharger road map.

Tesla North American Supercharger map.

Yet another idea to consider: Give the owners of the affected vehicles the option to replace their car with a new electric Volkswagen e-Golf. Some current Volkswagen TDI diesel owners have said they now feel guilty for having driven their diesel for the past few years, with a main reason for their purchase having been both fuel economy and because it was a "clean" diesel.

Offering those owners the option to return the polluting car for a much cleaner Volkswagen could demonstrate that VW understands and is concerned with its customers' desire to drive clean cars. Many owners won't take advantage of such an offer--diesel partisans can be just as committed to their technology as electric-car advocates--but the offer would send a powerful signal about the company's intent. I believe these are the sort of things Volkswagen must consider if it wants to convince the public it is serious about making proper restitution for this egregious deception.

How about offering eGolfs to the customers that don't want their dirty diesel anymore?

There are plenty of ways to make some good come out of this shameful episode. No matter how you slice it, it will be very painful for Volkswagen AG. How well or poorly the company manages this crisis will  have a lingering effect for years to come, even decades.

It appears VW intentionally deceived both the American consumer and the U.S. government, and put public health at risk, by knowingly planning and executing a fraud. To me, and I think to many others, that's much worse than a carmaker trying to delay or prevent a vehicle recall.

But Americans are forgiving people, and sin followed by redemption is a part of our national myth. As long as we believe the offender is genuinely remorseful for what it did, and is taking steps to prove it hase learned from the offense, recovery is possible--perhaps even lauded and held up as a shining example of redemption.

Now that we've found out the real truth in German engineering, the ball has moved into VW's court to decide on what it can do to begin to offset the damage it has done to itself, its customers, and the environment.
Let's hope Volkswagen is smart enough to make the right decisions.

*Edit: BMW released a statement regarding the recent discussion of diesel engines and emission compliance. You can read it HERE.

First DCQC Unit in the East Coast Express Charging Corridor Installed

An i3 sits next to a 24kW DC Fast Charge unit during the announcement of the BMW, VW & ChargePoint joint venture earlier this year. 

It's been seven months since BMW, along with Volkswagen and ChargePoint announced a joint venture which would install roughly 100 DC fast charge units on the East and West coasts. While there's been a lot of work identifying potential locations and negotiating with site managers, there hasn't really been any tangible progress that electric vehicle owners could see.  

The plan is to create "Express Charging Corridors" on both coasts, with DC Fast Charge stations placed no more than 50 miles apart. The East Coast Corridor will connect Washington DC to Boston, Massachusetts and the West Coast Corridor would extend from San Diego, California to Portland, Oregon.  There would be two kinds of DC Fast Charge stations utilized. The stations placed directly on the highway locations of the corridors would be 50kW units, most of which will be dual head CCS & CHAdeMO stations. Then, on secondary locations slightly off the direct corridors, 24kW CCS-only units will be placed. While these 24kW units aren't necessarily quite fast enough to be convenient for long distance travel of hundreds of miles, they are very useful for intercity travel and charge at three to four times the speed of standard level 2 public charging.

ChargePoint's East and West Coast Express Charging Corridor Infographic

I applied, and was recently approved under the program guidelines to have one of the 24kW units installed on my commercial property in Montclair New Jersey.  I'm currently awaiting the permits to be approved and hope to have the station installed and working before my National Drive Electric Week event on September 12th. Always the competitor, I was also hoping to be the first East Coast public location in the program to get a station installed, but I'm actually happy to report that won't be the case. That's because a friend of mine and fellow BMW i3 owner, Bruce Redman Becker has beaten me to it. Bruce, and architect and developer, is responsible for 777 Main Street in Hartford Connecticut, a newly developed 285 unit apartment building with a 250 car parking garage. In describing the location to me, Bruce had this to say:

"The site is just two blocks from exits off I-91 and off I-84.  We have one SAE combo DC fast charger and 10 level 2 chargers (3 duals in the surface lot and 2 duals up the ramp within the covered garage).  Power  for all 11 Chargepoint chargers comes from a 400kw fuel cell adjacent to the chargers that also provides renewable clean energy to heat and power the apartment tower….We have three coffee shops on our block, including a Blue State Coffee on the first floor of 777 Main opening in September.  And there are over a dozen great restaurants nearby as well as a great camera shop, CVS, banks and the Hartford Atheneum museum to enjoy while charging."

An i3 using the DC Fast Charger at 777 Main Street, Hartford Connecticut 

So while none of the main corridor, 50kW units have been installed yet, it seems the secondary, 24kW stations are beginning to materialize here on the East Coast, which is welcome news. I know some i3 owners have been frustrated by the seemingly lack of action with regards to the DC Fast Charge roll out, but I also know first hand that BMW and ChargePoint have been working very hard to locate potential locations, negotiate site agreements and collect bids for the installation. They've been at it for half a year now and I believe we're going to begin to see some real progress made in the next couple months. Getting the first one up and running can sometime seem like the biggest hurdle in programs like this. Well, now that that's done I'm optimistic that in the next six months we'll see dramatic progress made on both coasts. 

Three 24kW DCFC units have been up and running at BMW Headquarters in Woodcliff Lake, NJ since January. They are open to the public and free to use.

BMW Partners With Volkswagen & ChargePoint. Announces Beginning of Large Scale CCS Fast Charge Rollout in US

Today at the DC Auto Show, BMW announced they have partnered with Volkswagen and ChargePoint to begin what will be the largest roll out of CCS Fast Charge stations in the US. This first phase will consist of the installation of roughly 100 CCS Fast Charge stations, split between the East and West Coasts. 

On the East coast, there will be locations approximately every 50 miles between Washington DC and Boston, and on the West coast the new "CCS Highway" will span from San Diego, CA all the way to Portland OR. All of these locations will feature 50kW dual-head Fast Charge stations, including CHAdeMO charging capabilities as well as CCS. In addition, these locations will have multiple Level 2 ChargePoint EVSE's, allowing the user to "top off" once the vehicle reaches 80% state of charge from the DC fast charger. 

In addition to the "CCS Highway" locations, BMW is also going to install a network of their 24kW DC Fast Chargers at secondary locations which are somewhat off of the main arteries. 

I spoke with BMW infrastructure manager Rob Healey today and he wanted to stress how this announcement signifies only the beginning of the commitment that BMW and their partners have to proliferate the deployment of DC Fast charge infrastructure. He pointed to the fact that the decision to include CHAdeMO on all their 50kW locations on the East & West coast deployment indicates their commitment to the success of overall e-mobility, not just their plug-in offerings. Healey used the phrase that "a rising tide lifts all boats" and in this case I believe he's absolutely correct. 

BMW and their partners are still identifying locations and are working with public and private entities to secure locations that are a maximum of 50 miles apart. There isn't a set time frame on completion of this first phase but the installations have begun on the West Coast and will soon begin on the East. BMW has already installed three 24kW DC stations and four dual-head Level 2 charging stations at their North American Headquarters in Woodcliff Lake, NJ. I was even invited there to test them out with my i3 this week, which I did. All of these stations will be open to the public 24/7 and they already appear on the ChargePoint map. 

I believe this is a great first step for BMW and their partners with regards to DC fast charge, but it's only the first step. There will also be attention paid to the other areas of the country that aren't included in this announcement. It's a big country, and areas like Atlanta which have become EV hot spots aren't going to be ignored, but these two corridors were considered the most important ones to begin with. I also believe we're going to see even more collaboration between the OEMs. It's no secret BMW and Tesla have had discussions in the past, and in my opinion, installing CHAdeMO on all of their locations on the CCS Highway is extending a huge olive branch to Nissan. How great would it be if Nissan then turned around and said they will do the same thing now? This little detail could end up being the biggest thing to come out of the whole announcement...

Full Press release:

Washington, D.C., January 22, 2015– At the 2015 Washington Auto Show, two of the top automakers, BMW of North America and Volkswagen of America, together with ChargePoint, the largest electric vehicle charging network, announced an initiative to create express charging corridors along heavily-traveled routes on the East and West Coasts. Designed to increase the number of fast charging locations, the initiative will help meet the large and growing demand for convenient, publicly available electric vehicle fast chargers, including direct current (DC) Fast charging locations, and support the adoption of electric vehicles in the United States. In the initial phase, the aim is to install nearly 100 DC Fast charging ports across both coasts, with plans to expand the program to increase access to fast charging across the country. These newly installed DC Fast chargers will be added to the growing ChargePoint network of more than 20,000 charging spots in North America.

With more than 280,000 electric vehicles sold in the United States, EV owners need more charging flexibility while on the go. The express charging corridors will provide electric vehicle drivers access to DC Fast chargers along the most heavily populated and highly-trafficked regions on Interstate 95 on the east coast, from Boston to Washington, D.C., and on the west coast covering and connecting the metropolitan areas of Portland, San Francisco, Los Angeles, and San Diego. The installations will occur both within and between relevant metro areas, strategically-spaced at a maximum of 50 miles apart, making it even easier to take long road trips in an EV.

“A robust network of conveniently located DC Fast charging stations will go a long way toward increasing electric vehicle adoption and making electric vehicle ownership even more enjoyable,” said Robert Healey, Head of EV Infrastructure at BMW of North America. “The express charging corridors are another important step in the development of the U.S. e-mobility infrastructure that makes longer distance travel a real option for consumers, particularly along the most heavily trafficked portions of both coasts—making the BMW i3 and other electric vehicles even more appealing.”

“Volkswagen believes in a holistic approach to e-mobility in order to create a seamless experience for the consumer,” said Jörg Sommer, vice president, product marketing and strategy, Volkswagen of America. “The investment in the express charging corridor will provide e-Golf and other electric vehicle owners with the added support to travel their day-to-day and popular long distance routes.”

Each fast charging location along the express charging corridors is expected to include up to two 50 kW DC Fast chargers, or 24 kW DC Combo Fast chargers with the SAE Combo connector, used in both BMW and Volkswagen electric vehicles as well as many other electric vehicles that incorporate a DC Fast Charging capability. When charging at a 50 kW station, both the BMW i3 and the Volkswagen e-Golf can charge up to 80 percent in 20 minutes. Both vehicles can charge up to 80 percent in 30 minutes at a 24 kW station. Locations will also include Level 2 chargers, currently the most commonly available public charging stations, which are compatible with all electric vehicles. Level 2 stations can dispense up to 25 miles of range per hour of charging, providing a full charge for the BMW i3 and the VW e-Golf within 3.5 to 4 hours.

The DC Fast charging stations will be part of the ChargePoint network and can be easily accessed with a ChargePoint or ChargeNow card or with the ChargePoint mobile app.

“Our goal at ChargePoint is to get everyone behind the wheel of an EV and provide EV charging everywhere they go,” said Pasquale Romano, ChargePoint CEO. “With strategically-placed stations where drivers need them, these express charging corridors will give EV drivers the freedom to go farther and have an EV as their only car without limitation.”

Installations have already begun on the west coast, with the first location in San Diego County. There is a target of nearly 100 DC Fast charging ports in the first phase, available by the end of 2015. DC Fast chargers along the express charging corridors are expected to be installed in convenient locations such restaurants, shopping centers, rest stops, and more. ChargePoint will leverage its existing customer base and knowledge on usage to pick strategic locations either where drivers currently charge, or to fill in spaces where there is currently a lack of infrastructure.

With the investment, BMW, Volkswagen and ChargePoint are providing drivers with the ability and confidence to enjoy longer distance driving and recharge their electric vehicles quickly, ultimately leading to greater electric vehicle adoption. 

BMW Group In America

BMW of North America, LLC has been present in the United States since 1975.  Rolls-Royce Motor Cars NA, LLC began distributing vehicles in 2003.  The BMW Group in the United States has grown to include marketing, sales, and financial service organizations for the BMW brand of motor vehicles, including motorcycles, the MINI brand, and the Rolls-Royce brand of Motor Cars; DesignworksUSA, a strategic design consultancy in California; a technology office in Silicon Valley and various other operations throughout the country.  BMW Manufacturing Co., LLC in South Carolina is part of BMW Group’s global manufacturing network and is the exclusive manufacturing plant for all X5 and X3 Sports Activity Vehicles and X6 and X4 Sports Activity Coupes.  The BMW Group sales organization is represented in the U.S. through networks of 339 BMW passenger car and BMW Sports Activity Vehicle centers, 147 BMW motorcycle retailers, 122 MINI passenger car dealers, and 35 Rolls-Royce Motor Car dealers.  BMW (US) Holding Corp., the BMW Group’s sales headquarters for North America, is located in Woodcliff Lake, New Jersey.

About Volkswagen of America, Inc.

Founded in 1955, Volkswagen of America, Inc., an operating unit of Volkswagen Group of America, Inc. (VWoA) is headquartered in Herndon, Virginia. It is a subsidiary of Volkswagen AG, headquartered in Wolfsburg, Germany. VWoA’s operations in the United States include research and development, parts and vehicle processing, parts distribution centers, sales, marketing and service offices, financial service centers, and its state-of-the-art manufacturing facility in Chattanooga, Tennessee. The Volkswagen Group is one of the world's largest producers of passenger cars and Europe's largest automaker. VWoA sells the Beetle, Beetle Convertible, CC, Eos, e-Golf, Golf, Golf GTI, Jetta, Jetta SportWagen, Passat, Tiguan, and Touareg vehicles through approximately 651 independent U.S. dealers.

About ChargePoint

ChargePoint operates the world’s largest electric vehicle (EV) charging network, with more than 20,000 spots to plug in and charge. We are transforming the transportation industry by providing the charging stations, mobile apps, analytics and the charging network that allow property owners and drivers to benefit from EV charging. We are also transforming the energy industry by providing intelligent solutions to help people and businesses shift away from fossil fuels and use electricity more efficiently. Our mission is to get all drivers behind the wheel of an EV and provide them a place to charge whether at home, at work, around town or out-of-town. 

Over 165,000,000 gas-free miles have been driven on our network, and our drivers have collectively avoided more than 6.9 million gallons of gasoline and 51 million pounds of CO₂ emissions. Real-time network information is available through the ChargePoint app and in many top-selling EVs.