The levels far exceed those required by California, whose zero-emission vehicle rules have just started to ramp up for 2018 after staying steady for six years.

"Electric" cars are vehicles that plug into the electric grid to recharge batteries that provide the energy to run them. But "electrified" cars simply have an electric motor somewhere in the drivetrain—and they don't necessarily have plugs (although they may).

But as it turns out, Volkswagen had pushed aggressively from 2009 to 2011 for its so-called "clean diesel" vehicles to receive the same tax credits as those granted to plug-in electric cars.