Background. On 25 October 2016, the United States District Court for the Northern District of California approved a proposed 2.0-liter Partial Consent Decree between ARB, Volkswagen (VW), and the United States Department of Justice. The Consent Decree partially resolves Clean Air Act and California State claims against VW for equipping its 2.0L diesel vehicles with defeat devices. This Consent Decree is intended to fully mitigate the calculated environmental harm done by VW’s 2.0L diesel cars.

There are four elements of the Consent Decree, each described in a separate appendix. One of these—Appendix C—requires VW to invest $800 million in California over a 10-year period to support the increased use and availability of ZEVs. VW will implement these investments in four $200 million 30-month cycles.

Appendix C outlines four areas of qualified investments: ZEV infrastructure (including the development and maintenance of ZEV charging stations), public awareness, increasing ZEV access, and a green city.

California has also filed a Second California Partial Consent Decree with the Court for approval which, if approved, would require Volkswagen to:

1. complete two Green City initiatives in California as part of the ZEV investments required by Appendix C to the First Partial Consent Decree, with the second Green City required to be in a city with a population of approximately 500,000 that predominately consists of Disadvantaged Communities as identified by the California Office of Environmental Health Hazard Assessment’s CalEnviroScreen mapping tool; and

2. to introduce three additional Battery Electric Vehicle models in California from 2019-2025 according to a schedule specified in the decree.

The Second California Partial Consent Decree would also require Volkswagen to pay ARB $25 million for ARB to spend on ZEV-related aspects of a vehicle replacement program in California in 2017 or later; and would require VW to pay about $41 million into the trust established under the 2.0 liter Partial Consent Decree to be spent by California on replacing older, dirtier heavy-duty vehicles and equipment with cleaner vehicles and equipment.

Volkswagen has also agreed to pay about $153 million in civil penalties to California and perform other injunctive relief.

VW California ZEV Investment Plan: Cycle 1. Volkswagen Group of America has created a wholly‐owned subsidiary—Electrify America—that will be an entity focused on ZEVs that can efficiently and effectively fulfill the ZEV investment commitments under the Appendix C. The first 30-month cycle runs from Q1 2017 through Q2 2019.

In the first ZEV investment cycle, Electrify America will focus on four activities aimed at increasing the use of ZEVs and showing more Californians that going electric is possible and beneficial today:

1. Installing charging infrastructure (approximately $120 million);

2. Building a Green City to showcase the benefits of ZEVs and promote increased ZEV usage (approximately $44 million);

3. Public Education initiatives (approximately $20 million); and

4. Access initiatives like ride‐and‐ drive events, and an additional approximately ~$16 million spent on the operational costs of running Electrify America (e.g., personnel, other business expenses).

Charging infrastructure. Electrify America plans to build charging infrastructure that will primarily consist of (1) Community charging and (2) A long distance highway network. In addition, other use cases/technologies are also under consideration including destination charging at California state parks to increase access to L2s, and, for higher power DC charging applications, targeted battery storage to manage peak demand, ease grid loads, etc.

Charging stations will be located first in the areas with the highest anticipated ZEV demand; this is based on the forecast penetration rates of ZEVs in each region and the estimated gap between the supply and demand of charging infrastructure in those regions. In aggregate, the Electrify America first cycle investment will aim to establish a network of approximately 2,000‐3,000 non‐proprietary chargers across 400+ individual stations.

Electrify America stations will be designed to provide access by supporting many existing and anticipated charging technology needs (L2 PHEVs, 50 kW+ DC fast charging), the adoption of non‐proprietary charging standards (such as Combined Charging System (CCS) and CHAdeMO), and support for open protocols including Open Charge Point Protocol (OCPP).

Electrify America has identified 5 metropolitan areas for the cycle 1 investment (Los Angeles, San Francisco, San Jose, San Diego, and Sacramento). Additional metro areas will be targeted in future investment cycles. Within selected metros, Electrify America plans to build 350+ stations across five major use cases (multi‐family homes, workplace, commercial/retail, community, and municipal lots/garages). A deployment mix of L2, 50 kW, and 150 kW chargers will be offered across these use cases to help best meet the anticipated needs of EV drivers.

Electrify America will build a long distance high speed highway network consisting of approximately 50+ charging stations along high‐traffic corridors between metropolitan areas. These stations will focus on 150 kW and 320 kW DC fast chargers; each station will have 5 plugs on average.

Most currently installed non‐proprietary DC fast chargers are in the 25‐50 kW range, so Electrify America’s stations will be at least 3‐6 times faster, which reduces charging times to approximately 15‐20 minutes in some cases for new generation, larger battery capacity ZEVs.

The highway network will, in addition to serving highway ZEV traffic, also help to serve disadvantaged communities.

Site development for the first Electrify America stations will begin in Q2 2017, with development initiated for all stations by Q2 2018. These first stations are expected to be completed and operational for local community charging in Q3 2017 and for highway charging in Q2 2018.

Green City. Electrify America has identified three potential Green City initiatives on which to focus: ZEV car‐sharing, ZEV delivery fleet, and ZEV taxi fleet provider. The first 30‐month investment cycle for Green City will concentrate approximately $44 M of funding on developing the foundational infrastructure and planning for the launch of Green City initiatives (currently anticipated to be in Sacramento) as well as the launch of services.

Foundational work for the first Green City initiatives is planned to begin in Q3 2017, including the installation of approximately 75 supporting chargers. Site development for the estimated 75 supporting chargers is planned to begin by Q1 2018, with development completed for all stations by end of Q4 2019. This infrastructure associated with Green City is expected to cost approximately $11 million.

Brand-neutral public education. Electrify America has performed a segmentation analysis of the general car‐buying population to evaluate the penetration of ZEVs in various car‐buying population segments and regions; the positioning of ZEVs relative to competition; the barriers to adoption of ZEVs by population segment; and the key messages to communicate to the general population in order to improve penetration of ZEVs.

Based on this analysis and an additional analysis of consumer media consumption habits, Electrify America has developed a plan to deliver persuasive messaging against both ZEV benefits and overcoming barriers to ZEV adoption.

ZEV access initiatives. Numerous governments and other stakeholders proposed ZEV access programs in their comments to Electrify America. Experiential initiatives like ride‐and‐drive events are being planned to help increase ZEV access and exposure for as many Californians as possible.