Volkswagen will give the MBTA over $23 million to help it buy new battery-electric buses as part of the company's punishment for a brazen conspiracy to violate clean air laws in the early 2010s.
In 2015, Volkswagen admitted publicly that it had secretly installed "defeat devices" designed to cheat clean air emissions tests on nearly 590,000 of its diesel vehicles.
The company pleaded guilty to criminal charges in 2017, and among other penalties, Volkswagen paid $2.9 billion into a nationwide mitigation fund to finance state-led projects to reduce air pollution from diesel engines.
Massachusetts received $75 million from that fund, and in 2025, the Massachusetts Department of Environmental Protection (DEP) approved a plan to spend nearly two-thirds of that funding on new battery-electric buses for Massachusetts transit agencies.
At Thursday's MBTA Audit and Finance Subcommittee board meeting, Adam Zeller, the T's senior director for capital administration and finance, presented a proposed contract for the T to receive $23.1 million in Volkswagen settlement funds in order to replace older, polluting diesel buses with new battery-electric models.
Zeller told board members that the money would pay part of the bill on an existing bus procurement contract for new battery-electric buses manufactured by New Flyer.
The MBTA board of directors originally approved that contract in July 2023, with an initial order for 80 new buses. Zeller's presentation indicated that the T has exercised an option to buy an additional 40 buses within the terms of the same contract.
"As new vehicles arrive, (older diesel buses) will be rendered inoperable and disposed of. Once scrapped, the MBTA will be eligible for a reimbursement payment from the Trust," explained Zeller.
The current MBTA capital plan budgets $188.7 million to purchase up to 460 new battery-electric buses in the five-year period from 2026 to 2030.
An MBTA spokesperson told StreetsblogMASS that that capital budget had assumed that the T would receive $21 million from the Volkswagen settlement.
But that $21 million has accumulated an additional $2 million in interest, which the T will also receive. The extra funding had not been previously budgeted, and will free up around $2 million for other projects in the T's capital plan.
These won't be the first new battery-electric buses that Volkswagen pays for in Massachusetts.
In 2019, the Massachusetts DEP spent $22 million from the settlement fund to buy new electric buses and charging stations for the Pioneer Valley Transit Authority, the Greater Attleboro-Taunton Regional Transit Authority, and the Martha's Vineyard Transit Authority.
