The $14.7 billion settlement Volkswagen must pay to atone for last year’s emission cheating scandal includes a $2 billion investment in technology devoted to producing electric vehicles.
VW’s fuel emission cheating scandal will cost a total of $14.7 billion, $10 billion of which will go to the owners of the tainted vehicles, while another $2.7 billion to the Environmental Protection Agency for environmental mitigation. The company will plow another $2 billion investment into electric vehicle technology, which will be distributed within the next decade.
The payments will be dolled out to various plaintiffs, such as the state of New York, which will use $115 million for environmental projects to improve air quality, and another $30 million to the state’s general fund.
“Make no mistake: we will continue to investigate and pursue Volkswagen for its violation of our environmental laws, and we will seek the imposition of additional penalties in amounts sufficient to ensure that Volkswagen and any other car manufacturer complies with the standards required of them,” said New York Attorney General Eric Schneiderman.
Schneiderman has made hay recently for investigations against oil producer Exxon Mobil over allegations the company withheld information from the public about global warming.
Auto industry analysts noted Tuesday that VW appears ready to sink a great deal of money from the settlement into electric vehicles.
“This massive financial hit won’t magically make VW’s troubles disappear overnight, and it still has a long road ahead to repair its reputation among car shoppers,” Jessica Caldwell, director of industry analysis for auto pricing firm Edmunds, told reporters.
She added: “The company got a head start earlier this month by announcing a long-term commitment to electrification, but it will be a long time before shoppers will trust VW as an environmentally friendly brand.”
The $2 billion settlement adds another layer of credibility to the contention that VW will act as a type of clearinghouse for the electric automotive industry.
VW CEO Matthias Mueller, for instance, said at the company’s annual conference in April that fixing the tainted diesel power vehicles will remain the company’s top objective. After that, he told the conference, the company will start building 20 new electric vehicle models by 2020 — the move will “make electric cars one of Volkswagen’s new hallmarks,” according to Mueller.
A report from German newspaper in February indicated the EPA requested the company begin producing electric vehicles in Tennessee as just one way it could make up for the scandal. The agency also asked the company to construct thousands of charging stations throughout the U.S.
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