Volkswagen, one of the world’s largest producers of gas- and diesel-powered cars, is about to start spending $44 million to persuade Sacramentans to embrace electric vehicles.
Volkswagen’s plans for spending hundreds of millions of dollars promoting electric vehicles in California, part of its punishment for a massive air pollution scandal, won approval Thursday from the California Air Resources Board. The program includes designating Sacramento as its first “Green City,” where Volkswagen will spend $44 million developing an electric car-sharing service, building car-charging stations and providing other benefits over the next 30 months.
“We will not waste this opportunity,” Sacramento Mayor Darrell Steinberg told the Air Resources Board. He said the city wants to use the Green City programs as a launchpad to make “Sacramento a hub for alternative fuel technology.”
In a case involving state and federal officials, Volkswagen has agreed to spend more than $15 billion buying back vehicles and paying fines after admitting it rigged more than a half-million diesel cars with rogue software that cheated on air-pollution limits. The penalties include an agreement by Volkswagen to spend $800 million in California over the next 10 years promoting zero-emission vehicles, or ZEVs. The Air Resources Board’s decision Thursday covered the first $200 million in expenditures.
The carmaker’s ZEV program has generated controversy.
Lawmakers and other critics said Volkswagen wasn’t doing enough to build charging stations and promote the technology in “disadvantaged communities,” the poorest regions of the state where air pollution is generally the worst. The Legislature approved language, attached to a budget trailer bill, requiring the air board to make sure Volkswagen makes a good-faith effort toward directing at least 35 percent of its ZEV investments in disadvantaged communities. The air board sent Volkswagen’s initial plan back to the shop for retooling.
Among other things, the carmaker’s revised plan calls for installing charging stations in Fresno, which was left out of the original proposal.
“We look forward to future investment up and down and across the valley,” said Genevieve Gale, of the Central Valley Air Quality Coalition in Fresno.
Mark McNabb, president of Volkswagen’s Electrify America subsidiary, told the board “you have my commitment and my intent” to hit the 35 percent threshold. Even so, board members were wary of Volkswagen’s business plan even as they approved it.
“The fundamental question is whether the state of California can trust you,” said board member Dean Florez, a former state senator.
McNabb said it was a fair question in light of Volkswagen’s earlier transgressions.
Volkswagen’s software switched off the vehicles’ emissions controls systems when the cars were on the open road, but activated the controls when the cars were undergoing pollution testing. The “defeat device” software was uncovered in 2015 by Air Resources Board engineers at the agency’s test lab in El Monte.
Volkswagen’s tainted diesel cars have been polluting at up to 40 times the legal limit, worsening smog levels in these communities, according to state officials.