DC fast-charge-capable electric cars are already sold in the U.S., many more models are pending, and while advocates have uttered frustration that only Tesla has a nationwide network enabling long-distance driving, this state of affairs may soon be greatly relieved.
The funds would come via a court settlement over Volkswagen Group’s diesel emissions cheating, and the final approval, just days away, could bring big changes in as few as three years.
At a hearing Tuesday in a San Francisco U.S. District Court, Judge Charles Breyer said he is “strongly inclined to approve” by October 25 a settlement against VW by the U.S. Environmental Protection Agency, California Air Resources Board, and private attorneys who filed a class-action suit.
Separate but closely-related cases filed by the Federal Trade Commission and VW dealers against their own brand are also on track to be settled quickly. The settlement with EPA and CARB could cost the company as much as $14.7 billion over a 10 year period.
ZEV Initiative
One aspect of the new settlement is a Zero Emission Vehicle Initiative that requires Volkswagen to spend $2 billion over 10 years to plan, install, and maintain new ZEV charging-related technology. During each of four installments, VW must spend $500 million. By contrast, Tesla’s entire U.S. Supercharger network largely built since 2013 has likely cost less than $500 million to build.
Because of CARB’s role in the legal case against VW and its unique role in U.S. vehicle emission regulations, California is to receive and oversee 40 percent of these funds while the EPA is to oversee the remaining 60 percent on behalf of the other states. In addition, the EPA’s part of the initiative requires between $25 and $50 million to be spent in each $300 million installment for public education and advocacy regarding zero emission vehicles for a total of at least $100 million over the 10 year period.
The national initiative will be overseen by the EPA but VW has wide discretion in selecting, planning, and building the charging facilities. Prior to each 2.5 year installment VW must submit a plan to the EPA that describes approximately what will be built along with estimated costs. The agency will then review the initial plan and meet with the company to provide feedback and suggestions. It will also review the proposed investments to ensure that they comply with the types of spending allowed by the ZEV Initiative settlement.
The California initiative may face somewhat closer scrutiny by CARB and can cover a somewhat wider selection of funding targets. For both investment plans VW must file annual reports on their progress. Public versions with proprietary information redacted will be made available online.
Fuel Cells Also Supported
The initiative framework assumes most funds will go toward ZEV charging infrastructure and this is defined to be either fuel cell vehicle fueling or electric vehicle charging. VW has been tracking fuel cell development but has been slower to bring a production vehicle to market than Toyota, Honda, and Hyundai.
The company plans to bring its first hydrogen fuel cell car to market as an Audi and has hinted it could use the same platform and even the same body as its 200-plus mile range 2018 e-tron Quattro EV although it has not given a launch date. It has, however, announced plans for a big corporate shift away from diesel and toward EVs.
VW recently announced its new Strategy 2025 plan under which it will have 30 battery electric vehicles in the market by 2020. The company estimates that as much as 25 percent of its production by 2025 may be plugin vehicles which could represent two or three million units.
For EV charging, the company can choose a mix of DC stations or slower AC stations placed at workplaces, multi-unit residential buildings, or public locations such as along highway corridors. It does not appear that charging equipment can be given away to individual car buyers. The equipment cannot be installed at or near VW dealers. All work must be brand-neutral.
Audi’s Plan
In a recent ClimateWire article, Wayne Killen from VW’s Audi brand was quoted as revealing plans to install 175 DC fast chargers using Tesla’s Supercharger network as a model. “This is not a chicken-or-egg proposition,” said Killen, an electric vehicle architect at Audi. “The charging network has to come first, or there has to be awareness that it is being built, for someone to buy a long-range electric vehicle.”
According to the article, “Killen has been tasked with forming a partnership of automakers to install 175 new chargers nationwide before Audi’s e-tron Quattro makes its debut in 2018. Killen says he wants to emulate Tesla’s model of installing chargers”.
Killen told ClimateWire he wants to install these chargers “not just where electric vehicles are and drive,” but across the country. Under the terms of the new settlement, VW cannot use the funds as part of a partnership but must perform and manage the work entirely by itself perhaps to simplify accountability.
In Mitigation We Trust
In addition to the huge ZEV Initiative, a separate part of the settlement calls for a $2.7 billion Environmental Mitigation Trust (EMT) which VW must fund in three consecutive yearly payments of $900 million. Unlike the ZEV Initiative, which is managed and largely controlled by VW, the EMT will be managed by a trustee chosen by the EPA.
The trust fund will provide grants to state and local governments as well as recognized Native American tribal governments to replace older diesel engines with cleaner engines or electric motors. The stated goal is to reduce nitrogen oxide (NOx) emissions to compensate for the NOx emissions from VW’s nearly 500,000 diesel 2.0L engines that violated EPA emission limits.
There are nine pre-approved categories for EMT spending that include replacing older diesel engines in school and transit buses, large trucks, tugboats, and railroad engines used in ports for loading or unloading shipping containers from railcars.
Grants from the fund often cover just part of the upgrade cost. Switching from older diesel to electric motors results in the highest percentage funding match and it can reach 100 percent in some cases.
The emphasis is on reducing NOx emissions in urban areas where they contribute to smog formation and act as a lung irritant to local workers, residents, and children being driven to school. Additionally, up to 15 percent of the EMT funds can be used for EV charging intended for passenger cars and light trucks.
Between the ZEV Initiative and the EMT, as much as $2.3 billion will be available for ZEV charging. Funds can be spent for planning, installation, charging equipment, and maintenance however no funds can be spent to provide free electricity or hydrogen itself.
DC Charging Standards
The equipment must support only “non-proprietary” plug designs and must not be located at or near VW-related dealers. This presumably means the CHAdeMO and SAE CCS DC charging plugs used by most EV makers are allowed but Tesla’s unique plug design is not.
Although both major non-Tesla plug designs are allowed, not every station location needs to have equal numbers of plugs and VW is free to decide on the allocation as market trends evolve. The settlement also allows for new charging technology that may be adopted in the future.
The CHAdeMO and SAE CCS standards groups are on the verge of approving faster charging rates of up to 350 amps which could allow for nearly 150 kilowatt DC charging which would be competitive with Tesla’s existing Supercharger system. A future update expected before 2020 would further expand charging rates to a theoretical maximum of 350 kilowatts by allowing for twice the voltage (up to 1,000 volts). All versions of these updated standards are expected to be compatible and will continue to use the same existing physical plug design.
Typical Installation Costs
A basic Tesla Supercharger location with four charging stalls has been variously estimated to cost between $250,000 and $500,000 dollars. Tesla itself has not provided cost details. The existing major national DC charging provider, EVgo, recently estimated that installing a site with four high-speed (100 kilowatt or 200A) DC chargers consistent with the VW settlement would cost approximately $400,000.
Using EVgo’s assumptions, Audi’s initial plan to build 175 DC charging locations would have cost about $70 million out of the first ZEV Initiative installment of $500 million. Clearly, there could be funds available for an even more ambitious buildout. The first funding installment with plans approved by EPA and CARB should begin in spring 2017 and end in late 2019.
ChargePoint, a major seller of Internet-connected EV charging equipment, objected to the proposed settlement saying in a court filing that the structure of the agreement gives VW too big of a role in the charging marketplace. The U.S. government responded that it did not think there would be a major disruption and that other markets opportunities outside of the ZEV Initiative remain open to ChargePoint and other EV equipment providers who supported their position.
The largest portion of the VW settlement, potentially $10 billion dollars, goes towards the repair or buyback of the nearly 500,000 cars with non-compliant emissions. Cars bought back by VW must be repaired before being resold or exported outside the U.S. The EPA expects the repair to reduce NOx emissions by 80 to 90 percent although they will likely remain above the levels that were originally intended to be met. Owners who sell their cars back to VW will be paid according to a standard formula based on the age of the vehicle.
Details of the settlement can be found at http://ift.tt/29kr4Ew. A separate legal case involving more than 80,000 3.0L cars with diesel engines is still being negotiated.
This article first appeared on hybridcars.com
The post VW Settlement May Supercharge non-Tesla DC Rollout in US appeared first on VWVortex.
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