About Contact

CARB-VW Settlement Could Revolutionize EV Use in California

Article by: Paul Gipe

State’s EV Charging Network to Get Big Boost

The recent settlement between the California Air Resources Board (CARB) and Volkswagen (VW) for its diesel engine fraud could transform electric vehicle (EV) charging in the state. As a certain presidential candidate would say, the impact “will be Huuuge.”

The CARB-VW settlement could well dwarf any previous state EV charging program. The significance of the settlement is only now sinking in among California’s EV community.

For a sense of how huge remember the hoopla around the state’s announcement earlier this year. The California Energy Commission (CEC) issued awards for a number of fast-charging stations to complete the long-delayed West Coast Electric Highway. The CARB-VW settlement’s impact on fast charging in the state is potentially an order of magnitude greater.

The settlement could result in more new DC Fast Chargers (DCFC) being installed than currently exist in the entire state. That’s right, in the unlikely event that VW could ramp up installations fast enough; they could double the DCFC stations in California in the first year alone.

The Deal

The Consent Decree requires Volkswagen to invest $800 million dollars in zero-emission vehicle infrastructure in California over a 10-year period. VW will be responsible for installing brand neutral “fueling infrastructure” for both EVs and hydrogen-powered cars. VW will also be required to invest in zero-emission vehicle sharing programs and consumer awareness campaigns.

In sum, VW will be investing the equivalent of $80 million per year for ten years. Only a portion of this will be set aside for building EV charging infrastructure, but it could be a significant part. The agreement also specifies that the VW-developed projects must support the “next generation of zero emission vehicles.” The next generation of EVs will have twice the range of existing mass-market vehicles, requiring that most of the new charging infrastructure be devoted to DCFC stations.

If VW invested 75% of the settlement in EV fast-charging stations, the auto company would spend the equivalent of $60 million per year. For comparison, the CEC’s most recent award for fast-charging stations was only $9 million over two years. The money set aside in the CARB-VW settlement that could be used for fast-charging infrastructure represents more than ten times that of the CEC award per year. And VW will be investing that much for the next ten years. That’s indeed huge.

Fast Charging Necessary

Most EVs charge at home or at work. However, intercity travel requires a network of reliable fast-charging stations to make trips possible. Tesla understands this and has invested heavily in building-out a nationwide network of branded “Superchargers.” These stations offer multiple bays with chargers operating at high voltage and high current. Such chargers are a necessity for rapidly charging Tesla’s high-capacity traction batteries.

There’s no equivalent network of DCFC stations for mass-market EVs such as the Nissan Leaf or BMW i3. There are a number of fast-charging stations concentrated in the state’s major urban areas, but travel between cities is extremely difficult. These stations, where they exist, are comprised of no more than two individual fast-chargers. Each of today’s 50 kW fast-chargers is capable of refueling a Nissan Leaf in less than 30 minutes.

The market for EVs currently is restricted to families with two or more vehicles because of the difficulty of using the EV for intercity travel. In contrast, a conventional vehicle can be used for all needs: intracity and intercity travel. To break consumer resistance to widespread adoption of EVs, higher capacity traction batteries, such as those in Teslas, and a reliable network of intercity fast chargers, such as Tesla’s Supercharger network, are necessary.

Mass-market manufacturers will begin introducing vehicles with high-capacity traction batteries in 2017. These batteries will have twice the capacity of those in use today, doubling EV driving range. They will also require twice the amount of time of today’s vehicles for a “fast charge” with current charge stations.

Fortunately, newer fast chargers will soon be introduced that double (100 kW) or triple (150 kW) the charger’s capacity. This will keep the time needed for a fast charge to less than 30 minutes.

The race is now on between the introduction of high-capacity traction batteries and the introduction of higher-capacity fast-chargers to serve them. The CARB-VW settlement could drive the rapid introduction of these new fast chargers and in doing so revolutionize EV use in the state. As the network of intercity stations grows, consumers will have less and less reason to stay on the sidelines.

Scale of Possible Build-Out

To make sense of the potential impact on California’s fast-charging infrastructure, it’s necessary to look at a previous settlement.

In the spring of 2012, the California Pubic Utility Commission reached a settlement with NRG, a utility company, for its actions during the state’s power crisis at the turn of the century.

As part of that settlement NRG would pay the CPUC $20 million and invest $100 million over four years in EV-charging infrastructure. Their agreement called for NRG to specifically invest $50 million in 200 DCFC stations. Each of these stations would include two fast-chargers.

The VW settlement is significantly greater. We don’t know how much of the $80 million per year will be devoted to DCFC stations, though we can make an estimate what the impact might be.

For example, if 75% of the settlement is invested in DCFC stations, VW could install from 250 to 400 stations per year. Each station could contain from two to five fast-chargers. This is more fast-chargers in the first year program than the entire NRG-CPUC settlement agreement. It is also more fast-chargers than installed in the state today.

There are 13,500 gas stations in California, each with multiple pumps. While the total number of fast-charging stations that could be installed under the CARB-VW settlement is only a fraction of the gas stations in the state, a direct comparison is inappropriate. Hardly anyone, except for a few farmers and ranchers, has a gas pump at their house. Intercity travel with an EV requires a much smaller number of fast-charging stations than the number of existing gas stations would indicate.

The CARB-VW settlement could provide a sufficient number of DCFC stations to replicate the ease and reliability of refueling now found with gasoline. The settlement could create the critical mass of fast-charging stations needed for intercity travel, spurring rapid EV adoption in the Golden State. Once critical mass is achieved, EV use could grow exponentially, signaling the beginning of the end for gasoline in passenger vehicles in California.