This Week’s Top 10: VW settlements and indictments, EPA claims on FCA diesel emissions

by Jon LeSage, editor and publisher, Green Auto Market

Here’s my take on the 10 most significant and interesting occurrences during the past week…….

  1. VW settlements and indictments: Volkswagen continued to settle criminal and civil charges with U.S. federal agencies, while six VW executives were indicted by the Department of Justice tied to the German automaker’s diesel emissions scandal. One executive was arrested at a Miami airport while trying to leave for Germany, while five of the six were thought to be residing in that country. Additional VW executives are being investigated and may face charges, Attorney General Loretta Lynch said. In its settlements, VW agreed to pay a $2.8 billion criminal fine to the federal government, and will operate under the oversight of a court-appointed independent monitor for three years. The company will additionally pay $1.45 to settle civil claims filed by the Customs and Border Protection agency over violations of U.S. customs and environmental laws. The automaker will also pay the DOJ $50 million for additional claims falling under the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA). VW is also waiting to see the outcomes and costs coming from investigations by state attorneys general; and from lawsuits brought by shareholders who accuse Volkswagen of waiting too long to disclose the financial risk of its emissions cheating.
  2. EPA claims on FCA diesel emissions: The U.S. Environmental Protection Agency on Thursday accused Fiat Chrysler Automobiles of illegally using hidden software to allow excess diesel emissions to go undetected. About 104,000 affected vehicles include the light-duty model year 2014, 2015, and 2016 Jeep Grand Cherokees and Dodge Ram 1500 trucks with 3-liter diesel engines sold in US, the EPA said. FCA vehicles are being investigated for software that calibrates an engine’s performance and controls emissions levels, and that can shut off in certain situations. FCA shares plummeted with a possible maximum fine of about $4.6 billion possibly being filed. Share prices have stabilized in Europe since then. Fiat Chrysler Chief Executive Sergio Marchionne rejected the allegations, characterizing the dispute as whether the automaker had completely disclosed software that protects the engine. Marchionne also said that FCA was planning updated software to address EPA concerns.
  3. EPA closes mid-term review: The EPA has finalized its move to end the mid-term review on 2025 fuel economy standards aiming for average mileage to be in the low-50s (and closer to upper 30s mpg on window stickers). The federal agency had received objections from automakers in November when it shortened the timetable for the mid-term review of its mandate to raise corporate average fuel economy of new vehicles; the agency had received public comments on whether to modify the 2022-2025 model year vehicle emission rules. Timing was moved up from April 2018 to January by the EPA, prior to the Trump administration taking over the executive branch. Automakers have been in talks with the Trump transition team, arguing that the strict rules impose significant costs and are not in line with consumers favoring pickups and SUVs over small, fuel-efficient cars. Consumers Union, the policy division of Consumer Reports, praised the decision for offering some protection from future gas price volatility and significant fuel savings, even if gas prices stay down.
  4. Bolt platform: General Motors CEO Mary Barra last week said a “huge range of vehicles” will be spun off from the Chevy Bolt electric car platform, while at the Detroit auto show; few details were given. “The Bolt is our platform that we’re going to continue on and have a huge range of vehicles,” Barra said, “so we haven’t announced them yet, but you’re going to see more coming.”
  5. ACT Expo: The Advanced Clean Transportation (ACT) Expo has released an agenda for the annual event, taking place May 1-4, 2017, once again in Long Beach, Calif. It offers an opportunity to gain insight on the latest trends and technologies driving the future of fleet transportation, including: Available near-zero and zero emission technology from leading OEMs; Volkswagen settlement funds and other lucrative grants and incentives; Current policy landscape: what to expect from the new Trump Administration; Future of heavy-duty trucks: ultra-efficient, platooning and automated trucks; Developments in electric vehicles and charging infrastructure for all applications; Increasingly sustainable and connected urban mobility; and, The role of fleet vehicle operations in Smart City. There’s a Call for Abstracts, due February 3, for presenters interested in speaking at the conference.
  6. Hybrid pickup: Honda is adding a dedicated hybrid pickup to its lineup for a 2018 rollout. It’s part of the Honda Electrification Initiative, which will add to the company’s electrified vehicles. That announcement was made by Takahiro Hachigo, Honda’s president and CEO, at the Detroit auto show. The hybrid pickup will be manufactured at a plant in the U.S. Honda set a global target for two-thirds of all sales to come from electrified models by 2030 and to halve its total company CO2 emissions from 2000 levels by 2050. “Half of the all-new models Honda will launch in the United States in the coming two years will be electrified vehicles,” Hachigo said. “In the long term, electrified vehicles are key to the future of carbon-free mobility.”
  7. DME-powered trash truck: Oberon Fuels said that it has its first customer demonstration of a Dimethyl Ether (DME)-powered Mack truck, a Mack Pinnacle. Oberon, a DME producer, and Mack are working with the NYC Department of Sanitation (DSNY) to operate the demonstration vehicle at the Fresh Kills Landfill, and evaluate performance and overall drivability. The test is the first step in the city’s evaluation of both DME trucks and DME fuel as a potential long-term strategy to help reduce greenhouse gas emissions by 80% by 2050; and to achieve the city’s goal of sending zero waste to landfill by 2030.
  8. Self-driving Uber cars: Although Uber is setting up autonomous vehicle test projects around the country, the company has no plans to replace all its drivers with robots. Speaking last week at the Automotive News World Congress in Detroit, Sherif Marakby, vice president of global vehicle system for Uber, said that drivers’ jobs will not be eliminated. The key benefit to bringing autonomous vehicles into its fleet will be to reduce costs to customers during peak demand times when prices can skyrocket up as much as five times the normal fare rate. Several Uber customers have been complaining about this “surge pricing” practice as a form of gouging. “The biggest problem in ride-sharing is supply — having enough drivers in peak times. Automated vehicles will help smooth out surge times,” he said.
  9. Free Tesla charging fading away: Supercharging is only going to be free for limited periods of time for Tesla drivers. Starting January 15, the company enacted a new program offering Model S and Model X owners that give them about 1,000 miles, or 400 kilowatt-hours, per year for free. From there, the cost for Supercharging will differ from state to state and province to province. Examples of what it will cost include a trip from San Francisco to Los Angeles, a distance of 383 miles, that will cost about $15. Driving from Los Angeles to New York will cost about $120.
  10. Two electrified vehicles in Detroit: Guangzhou Automotive Corporation (GAC) was the only Chinese automaker at the Detroit auto show this month. Two thirds of its new launches are electrified vehicles. The GE3 is a new electric crossover, the first vehicle based on GAC’s new electric-car platform. It will be launched on in China in March. The platform will be used in an upcoming sedan, an SUV, and a multi-purpose vehicle (MPV). The GAC EnSpirit is a plug-in hybrid concept car previewing a sporty coupe-SUV. The third vehicle is a GS7, a five-seat gasoline-engine SUV. It is a smaller version of the existing seven-seat GS8 SUV. GAC is the fifth largest automaker in China, and builds vehicles with joint venture partners, FCA, Honda, Mitsubishi, and Toyota. The Chinese automaker also manufactures vehicles under its own Trumpchi brand. That brand name wasn’t promoted at the Detroit auto show.

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