Volkswagen’s Electrify America supplement discusses ZEV charging investments in disadvantaged California communities

Volkswagen’s Electrify America supplement discusses ZEV charging investments in disadvantaged California communities

3 July 2017

Volkswagen subsidiary Electrify America last week submitted supplemental information to the California Air Resources Board (ARB) detailing its proposed charging investment in and benefit to underserved, low-income, and disadvantaged communities in the state as part of its court-mandated investment plan. (Earlier post.)

The supplement also adds the Fresno metro area as a focus for community charging investments; outlines an education and outreach proposal targeted at the unique barriers to ZEV use in low-income and disadvantaged communities; and presents a new strategy to explore the use of more affordable pre-owned ZEVs. ARB is initiating its
review of the Supplement; the Board will conduct a public hearing later this summer to
consider the approval or disapproval, in whole or in part, of the
full Investment Plan, which now includes the Supplement.

Background. Background. As required by Appendix C to the 2.0-Liter Partial Consent Decree entered by the US District Court for the Northern District of California on 25 October 2016, Volkswagen Group of America is investing $1.2 billion over the next 10 years in zero emission vehicle (ZEV) infrastructure, education, and access outside California to support the increased adoption of ZEV technology in the United States, representing the largest commitment of its kind to date. Volkswagen Group of America created Electrify America LLC, a wholly-owned subsidiary headquartered in Reston, Virginia, to fulfill its Appendix C commitments.

Earlier this year, Electrify America submitted the plan for the first tranche of spending, directed at 11 cities nationwide—New York, Washington, D.C., Chicago, Portland, Boston, Seattle, Philadelphia, Denver, Houston, Miami, and Raleigh—and several highway corridors.

Electrify America also released the California ZEV Investment Plan, outlining the plans for the first $200 million to be spent in California. In this plan, Volkswagen and ARB prioritized ZEV infrastructure build-out in areas with high anticipated ZEV demand and around disadvantaged communities throughout California, noting the potential for significant decreases in air pollution as a result of this ZEV build-out.

In May, ARB requested additional information from Electrify America, including:

  • A more complete description of the 10-year vision for its ZEV activities.

  • More detail on the investment in disadvantaged/underserved communities in California.

  • An estimated percentage of investments in disadvantaged/underserved communities for each spending category.

  • A bilingual and culturally sensitive awareness campaign (including marketing materials) that will run in disadvantaged/underserved communities or in media that target or serve disadvantaged/underserved communities.

  • A discussion of Electrify America’s commitment to gather statistics on resulting workforce training of and employment recruitment from disadvantaged/underserved communities served by implementation of the investment plan.

  • More information about Electrify America’s planning partnership with state agencies that will include environmental justice representatives, electric utilities, and local agencies for the purpose of coordinating the process of siting and installing EV charger stations.

  • Specifics on key decisions and planning processes.

  • Acknowledgment that Electrify America received and read the public, Board, and stakeholder comments; a high-level description of how Electrify America considered the comments in drafting the plan supplement; and a description of how Electrify America will continue to incorporate public feedback into its process moving forward.

  • Potential investment in hydrogen fueling stations over the 10-year investment period.

  • Heavy-duty hydrogen projects, such as freight fleet or shuttle programs, in this or future plans.

  • The potential for siting plazas that allow for both charging and hydrogen fueling stations, including planning elements such as permitting.

  • Creditable cost estimates broken out by the twelve required categories for the entire 30-month spending cycle, and for each spending category of projects.

  • A further description of Electrify America’s structure and proposed business model.

  • A commitment to provide CARB information and data regarding the cost, utilization, and performance of each of the approved projects within each eligible investment category.

  • A description of how Electrify America will monitor and maintain each proposed ZEV Investment.

The submitted supplement is in response to the requests.

The supplement. Volkswagen took pains in the supplement to clarify what it termed a “misunderstanding” regarding the requirements and intent of the ZEV Investment Commitment included in Appendix C of the Consent Decree, as well as Electrify America’s plans within this space.

The court-ordered, legally binding settlements reached between California, the Federal Government, and VW will result in VW providing the State of California with $688 million, which the state can spend as it desires, on the priorities of state government, without regard to investment prerogatives. This includes $25 million that Volkswagen specifically agreed to provide to CARB for its programs to advance ZEV deployment in low-income and disadvantaged communities, as well as $423 million for the NOx Mitigation Trust, including contributions specified in both the 2.0 Liter and 3.0 Liter settlements.

… The Consent Decree explicitly directs that this funding should be spent—by the State and the Trustee without any influence or control by Volkswagen—on action that “mitigates the impacts of NOx emissions on communities that have historically borne a disproportionate share of the adverse impacts of such emissions.”

In contrast, in Appendix C, Volkswagen committed to make an $800 million investment which would advance the use of ZEV technology in the state of California, but, in the words of CARB Chairman Mary Nichols:

Appendix C, the ZEV investment settlement, is not either a civil penalty or mitigation. It does commit Volkswagen to investing $800 million in California on ZEV infrastructure, brand-neutral public awareness marketing, increasing access to ZEVs, and green city projects. So if done well, this investment will benefit Volkswagen in their new ventures into the ZEV world without a doubt. But it will also benefit equally, if not more so just based on numbers, the other firms and stakeholders that are involved in ZEV as well [CARB Hearing].

—Supplement to the California ZEV Investment Plan
Cycle 1

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10-year vision. Electrify America is investing $800 million over the next 10 years in zero emission vehicle (ZEV) infrastructure, education, and access (including the Green City Initiative) to support the increased use of ZEV technology in California, representing the largest commitment of its kind to date.

Electrify America intends to build a long-term,
economically-sustainable charging network that provides
services beyond the 10-year consent decree
window.

  • The first cycle of investment will focus
    on establishing the largest nationwide network of
    non-proprietary charging infrastructure,
    deploying high power charging stations capable
    of refueling a ZEV at 10-20 miles of range per
    minute.

  • The stations will be compatible with EVs
    from all major brands, not just those produced
    by Volkswagen Group brands. Multiple technologies (L2,
    DCFC) and multiple non‐proprietary connectors and charging protocols (e.g., CHAdeMO, CCS) will be offered to maximize public access to Electrify America’s charging infrastructure.

  • These stations will be designed to be interoperable with other charging networks, pending agreements with other charging providers. They will be deployed in metro areas and along high traffic corridors where ZEV charging infrastructure is projected to be most in demand, utilizing an analysis-based approach.

Electrify America’s goal of an economically sustainable charging network will be easier to realize if the ZEV consumer market expands. According to the National Academy of Sciences and UCLA’s Luskin Center for Innovation, current ZEV consumers are predominantly well-educated males, the majority of whom purchase a ZEV as a secondary vehicle. Regardless of infrastructure, ZEV cost of ownership is and will continue to be a barrier to adoption for low-income consumers, as more than 95% of ZEV vehicle models projected to be on the market between now and 2021 are projected to sell for $30,000 or more.

These demographic realities are issues that Electrify America will work to address through its brand- neutral education and awareness efforts, and active engagement with auto dealers and local stakeholders, including the environmental justice community, provides an important opportunity to address this challenge.

—Supplement to the California ZEV Investment Plan
Cycle 1

One vision, two implementations. Although Electrify America has a single vision—presented in both the EPA approved plan and the pending California ZEV plan—the two plans differ in implementations.

  • The Cycle 1 CA ZEV Investment Plan proposes a substantial investment in providing ZEV access for those who do not own ZEVs, or cannot afford to own ZEVs. The $44 million Green City Initiative is California-specific, while the brand-neutral Education and Awareness programs in California will include access programs, such as ride and drives. These access efforts are not currently a focus of Electrify America investment outside California.

  • The Cycle 1 CA ZEV Investment Plan proposes to build nearly 90 percent of its charging stations at the community-level, including at multi-unit dwellings, workplaces, retail establishments and public parking lots in California. This represents a larger proportional investment at the community level than Electrify America plans to make in metro areas outside of California. Electrify America’s community charging proposal for California has a larger budget ($45 million) than community charging at the national level ($40 million), and it is to be spent in approximately half as many metro areas. When combined with Green City Initiative investments, $89 million will be spent at the community level in California during Cycle 1.

  • Electrify America initially identified five underserved California metro areas: (1) Los Angeles-Long Beach-Anaheim; (2) Sacramento-Roseville-Arden Arcade; (3) San Diego-Carlsbad-San Marcos; (4) San Francisco-Oakland-Hayward; and (5) San Jose-Sunnyvale-Santa Clara. The supplement adds a sixth: Fresno.

    Vwea2

    Within each metro area, the Cycle 1 CA ZEV Investment Plan proposes to focus investment across five use cases: workplaces; multi-unit dwellings; retail; charging depots; and municipal lots and garages.

    Electrify America has prioritized 1,500+ census tracts for community charging investments, and more than 35% of these census tracts are identified by CARB as disadvantaged or low-income communities. Lacking the budget to address all of these in Cycle 1, Electrify America has budgeted to construct community level charging stations at approximately 350 sites in the Cycle 1 California ZEV Investment Plan.

    Infrastructure planning. Electrify America identified the California metro areas expected to be most underserved and in need of charging infrastructure associated with forecasted EV sales growth and fleet size by 2020. The analysis derives the daily charging power needs (expressed in megawatt hours/day) for ZEV drivers outside their residence, assuming that 78% of ZEV charging needs will be met at home, as NREL research shows.

    Outside the home could include workplace, community charging in a variety of shopping, restaurant and other parking venues, as well as on highways. The charging power gap used assumptions including the battery size, charging power and range efficiency (assumed 3.5 miles per kWh) for the expected future fleet of new EVs, including current EV units in operation. The DOE’s alternative fuel database and Plugshare data provided the understanding of current Level 1, Level 2 and DCFC infrastructure available today to calculate the power gap needed to solve the 22% of EV driver charging needs that are expected to be met outside the home.

    The
    methodology found that nearly 1,700 megawatt hours per day would be needed to bridge the gap between charging infrastructure in the ground today and what would be needed by 2020 in the six targeted metro areas. This implies that considerable other private and public investment in charging infrastructure will be needed to reduce this charging power gap because Electrify America is targeting to reduce the gap by only 4-8% percent by 2020 with its own investments.

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