Volkswagen has the potential to earn revenue from the $2 billion the automaker is required to spend on zero-emission vehicle projects in the diesel emissions settlement, a federal agency official said.
U.S. Environmental Protection Agency enforcement chief Cynthia Giles said “nothing” in the consent decree prohibits VW “from obtaining revenue” from projects that receive that funding from the automaker. That statement was made Tuesday in a response letter to questions submitted by lawmakers.
The $2 billion in spending is part of the $15 billion settlement in VW’s diesel emissions cheating scandal. The German automaker is required to spend $2 billion on ZEV projects over the next decade, with a requirement to spend $800 million in California and the remainder in the 49 other states.
“The ZEV investment requirement will be a business investment made by Volkswagen,” Giles said in the letter. “VW may see a benefit from mandatory ZEV investments, and that would not be inconsistent with the [consent decree.] Volkswagen could have decided to make these investments even without this enforcement case, but now it is required to do so.”
The EPA letter will be scrutinized by Republican leaders of the U.S. House Energy and Commerce Committee. These members of Congress scheduled a December 1 hearing in part to look at how the EPA will oversee VW’s spending plans.
The EPA letter leaves out suggestions on how VW can comply with the ZEV spending provision and generate revenue. As the automaker prepares to launch 30 all-electric vehicles by 2025, revenue opportunities could be built into the process.
Whatever method VW taps into, the automaker will have to stay brand neutral.
The agency and Justice Department will “ensure that VW complies with the requirements for stakeholder engagement, that the investments VW makes are truly brand neutral, and that VW complies with all the terms of the settlement,” Giles wrote in a blog post on Monday. “EPA does not make the investment decisions – Volkswagen makes the decisions, informed by the input it gets from stakeholders, the changing market conditions, and bound by the detailed constraints in the agreement – but we will make sure that Volkswagen plays by the rules laid out in the agreement the court approved.”
House members will also review the “potential” for VW to gain an “unfair competitive edge” in the electric vehicle market from the investments, according to a statement by the committee’s Republican leadership.
Lawmakers were likely to have studied a court filing in October by ChargePoint, which operates the largest U.S. network of charging stations for plug-in electrified vehicles. ChargePoint said the settlement could drive out all competition in the market for PEV infrastructure. Part of the $2 billion settlement in the diesel emissions scandal directs VW to develop, build, and maintain infrastructure for charging ZEVs.
The House committee wants to make sure that the $15 billion settlement is carried out the right way.
“For over a year now the committee has been examining the VW cheating scandal and remains committed to holding VW accountable for its actions, as they represent a fundamental violation of public trust,” U.S. Rep. Tim Murphy, R-Pa., chairman of the Energy and Commerce Committee’s oversight panel, said in a statement. “These provisions aim to remedy the market and environmental impacts of VW’s deceitful actions; however, questions remain in regards to the implementation of these provisions.”