In April 2017, a US federal judge ordered Volkswagen to pay a $2.8 billion criminal fine for "rigging diesel-powered vehicles to cheat on government emissions tests." While many thought this would be the beginning of the end for the VW name, what it really did was push the company to become a market leader in a new industry: electric charging stations.

In addition to this $2.8 billion fine, VW was mandated to invest an additional $2 billion in electric infrastructure and EV awareness across the United States. This new, rather pleasant outcome from the scandal is just starting to bear fruit.

A Nationwide Network

The result of the $2 billion infrastructure investment was the formation of a new, wholly-owned subsidiary, based in Reston, VA called Electrify America. Electrify America was tasked with building a nationwide network of electric vehicle chargers. With two billion dollars of funding, it would soon become the largest network of its kind.

Unlike Tesla's network of "Superchargers" which only support Tesla vehicles, Electrify America chargers support all "standards", CHAdeMO, CCS, and the Tesla-supported J1772.

With approximately 500 locations, including many in Walmart and Bank of America parking lots across the United States, the company is executing well on its plan. According to the company's web site, the company plans to have 3,500 chargers by the end of 2021. (Tesla had approximately 7,000 charging stalls across the country at the end of 2019, according to data on supercharge.info

Volkswagen is heavily advertising free Electrify America charging as a perk for buying one of their Audi eTrons, and leveraging their "partnership" with the VW e-Golf and Porsche Taycan, lowering sales barriers for their customers.

Electrify America has taken it a step further and is partnering with non-VW brands on their launches as well. The company has partnered with Ford on the roll-out of the new Ford Mustang-inspired electric SUV, the Mach-E. The Mach-E's touchscreen will feature data about Electrify America's network availability and the Ford Mobile App will also simplify the charging process at Electrify America locations.

Electric-only brands are also partnering with Electrify America.

Fisker Ocean vehicles will be automatically recognized by Electrify America's charging stations, allowing for simple charging, automatic release and automatic payments.  BYTON, another EV startup, will offer free 30-minute charging sessions for the first two years of vehicle ownership.

Will the $2 Billion Investment Pay Off for VW?

In the short run, absolutely not. Electric vehicles currently only make up 2% of U.S. auto sales. While this is expected to continue to grow, the huge outlay could take decades to recover, if ever. However, the growth of EVs are stuck in a chicken and egg problem: without public charging, people won't buy EVs, yet companies won't invest in charging stations until there are EVs on the road. By forcing Volkswagen to make the necessary investment in US transportation infrastructure, it's easing concerns by the public and will spur EV adoption from all manufacturers.

The U.S. government played a skillful hand when it mandated the investment and helped put America on track for an electric future.

Published on: Jan 28, 2020
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