I don't think that's crazy at all. Think of it as "refactoring" the environmental burden. First you move the energy generation from individual cars to a central energy source. If the energy source (coal in this case) is terrible you won't immediately get a big benefit. However, you have separated the environmental impact of energy generation from combustion motors to a central power plant. So now when you build an infrastructure of clean sources of power: nuclear, geothermal, wind, solar all your cars get the benefit automatically. This is good design. Separation of concerns!
The fact that we're burning coal in this day and age is crazy, of course. Especially given that nuclear power plants are being shut down in favor of coal. Environmental policy isn't exactly rational, but highly politicized issues never are.