The VW Settlement: Aligning Your Vehicle Deployment Goals with State Priorities

May 17, 2017

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Even with the legal processes surrounding the Volkswagen settlements wrapping up, state agencies and fleets alike are still left with many unanswered questions: When will the funds be available? What types of projects can I apply for? How much could I receive?

Fortunately, recent news on the nomination of Wilmington Trust as well as the actions of some first-mover states has started to remove these uncertainties and provide answers to these questions. Each state is now following its own path. We have identified a few of the first movers below, though recognizing that for those fleets with multi­state operations, a more comprehensive program is an absolute necessity in order to fully take advantage of the VW settlement funds.

Colorado’s proactive approach identifies a considerable interest in electric vehicle projects.

Colorado led the charge to organize its stakeholders by scheduling public meetings and soliciting feedback as early as November 2016. The state expects to receive $68 million and has informally designated the Colorado Dept. of Public Health and Environment to serve as the lead agency responsible for the distribution of VW funds.

While the state has traditionally focused on funding a wide variety of project and fuel types through its ALT Fuels Colorado grant program and various tax credit programs, early indications show that stakeholder interest in VW settlement funding largely focuses on zero-emissions vehicles (ZEVs). Indeed, 50% of responders requested that Colorado use VW settlement funds for ZEV projects. Similarly, nearly 60% of responders were in favor of the state using its maximum 15% allocation for ZEV infrastructure projects.

Virginia’s outreach strategy focuses on actual projects rather than stakeholder recommendations.

Virginia recently opened a request for information with a deadline of May 18. Rather than soliciting general recommendations from its stakeholders, Virginia has instead opted to solicit examples of vehicle deployment projects as it develops the plan for its expected $93.6 million. Specifically, the state is looking for project details, including vehicle types, fuel and technology types, emission reductions, capital costs, and implementation timelines. Virginia intends to review these proposed projects to help identify the biggest potential beneficial impact, which will help establish the state’s funding priorities.

Northeast states are taking a more measured approach to the development of their VW settlement funding plans.

In marked contrast to Colorado and Virginia, other states, including many in the Northeast, have taken a much slower path to developing their own funding plans. New York and Pennsylvania have been noticeably quiet and have not yet published or otherwise sought out stakeholder feedback. Interestingly, these states were at the leading edge in 2009 when the American Recovery and Reinvestment Act provided states with millions in funding for alternative fuel vehicle deployments.

Where do we go from here?

With each state now navigating its own path, it can become increasing difficult for fuel providers, fleet managers, OEMs, and technology providers to sketch out their strategies. And because these funds are expected to start rolling out within the year, these entities must act now to proactively engage with state agencies to set the groundwork for advancing your company’s goals and, ultimately, gaining access to the Volkswagen settlement funds.

It bears mentioning that VW settlement funds represent just one pathway to incentivize advanced technology and alternative fuel vehicle deployments. There are over 500 different incentive programs offered throughout the U.S. and Canada that exist outside of the VW settlement—state and federal agencies remain dedicated to alternative fuel and advanced technology projects. Therefore, engagement and collaboration with these state agencies will reap substantial benefits in the long run.