Upton questions electric-car cash in VW emissions deal

Keith Laing
Detroit News Washington Bureau

Washington — Michigan’s top-ranking congressional Republican is questioning the inclusion of funding for zero-emission vehicles such as electric cars in Volkswagen’s $14.7 billion settlement over allegations the German automaker rigged hundreds of thousands of cars to cheat U.S. pollution standards.

U.S. House Energy and Commerce Committee Chairman Fred Upton, R-St. Joseph, said in a letter to the Environmental Protection Agency that was co-authored by Rep. Tim Murphy, R-Pa., that the inclusion of funding for zero-emission vehicles in the deal could give Volkswagen a leg up in the electric-car market.

Upton and Murphy wrote that the mandate forcing Volkswagen to pump $2 billion into zero-emission car research implicates “the competitiveness of the electric vehicle industry, EPA management and authorities and the public interest. ...

“VW may be able to obtain substantial competitive benefits, if not a monopoly on electric vehicle infrastructure, under the required investments,” the lawmakers wrote.

“It appears that, just as the company plans to enter the EV market, it will be consenting to a court-required $2 billion investment — potentially into its own infrastructure and to support its own newly entered market,” the lawmakers continued. “This is a curious outcome for the settlement of a cheating scandal.”

Volkswagen’s settlement, which was approved by a federal judge last week, calls for the company to provide $1.2 billion to federal zero emission vehicle research and $800 million to help fund similar efforts in California, which helped catch the German automaker in the act of cheating federal car pollution rules.

The funding is part of an agreement that calls for Volkswagen to pay more than $10 billion to either buy back or repair about 475,000 2-liter diesel vehicles that were sold between 2009 and 2015, and were built with devices to trick emissions testers.

Volkswagen has admitted to programming its diesels to trick emissions testers into believing the engines released far less pollution than they actually do, in violation of the federal Clean Air Act. Regulators have said that in normal driving the cars emitted up to 40 times more smog-causing nitrogen oxide than the legal limit.

Under the agreement, Volkswagen also will compensate owners who purchased 2-liter diesels before September 2015 with payments of $5,100 to $10,000, depending on the age of the car. Volkswagen will also have to pay $2.7 billion into a federal environmental mitigation trust fund.

Critics have accused regulators of forcing Volkswagen to pump funding into the U.S. electric car market at a time when sales figures show that drivers are turning to larger vehicles like SUVs.

Even electric-vehicle supporters have questioned the inclusion of the zero-emission car funding in the settlement. A group of 28 organizations with ties to the electric vehicle industry wrote to the Department of Justice in August that “the agreement shouldn’t pick winners and losers, especially given that this emerging market transition will in no small part define 21st-century transportation.”

The EPA said when the Volkswagen settlement was announced in June that zero-emission vehicle funding that is included in the deal “intended to address the adverse environmental impacts.”

Upton and Murphy gave the EPA a Nov. 15 deadline to answer 21 questions about the impact of the inclusion of zero-emission vehicle funding in Volkswagen’s settlement. Among the questions are “what measures will states or federal authorities take to ensure” that Volkswagen’s zero-emission vehicle funding “does not undermine competition in the marketplace or create opportunity for VW to gain a competitive advantage over other firms” that are interested in getting into the electric car industry.


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Twitter: @Keith_Laing