Amid major federal investment in electric cars, it’s time for states to step up, advocates say
For years, electric vehicles posed something of a chicken-and-egg problem.
Mass adoption, seen as critical to cutting the largest single source of U.S. carbon emissions, couldn’t happen until the infrastructure to allow drivers to recharge wherever they were heading was in place. And those charging stations weren’t coming until more drivers switched to plug-in electric vehicles.
That’s one of the reasons why growth in electric vehicle sales was sluggish for much of the past decade, industry experts say.
Times are changing, however. The commercials for electric versions of their best-selling trucks blanketing airwaves show major U.S. automakers like Ford and Chevrolet are jumping with both feet into the EV market, vying with the likes of startups like Rivian for a share of the lucrative pickup market. And far from offering a single electric model here or there, many automakers plan to go mostly electric over the next two decades.
Between 2015 and 2021, charging stations for plug-in electric cars more than tripled, according to Pew Research, though that infrastructure has generally remained clustered in large metro areas.
And the billions of direct electric vehicle charging infrastructure funding for states in the 2021 bipartisan infrastructure law and the array of tax credits in the more recent Inflation Reduction Act could supercharge that trend.
“We are living through a historic moment in terms of federal leadership on climate and clean energy technologies,” said Sarah Baldwin, director of electrification for Energy Innovation, a nonpartisan energy and climate policy think tank. Baldwin said the federal action signals an end to “yo-yo, on-again, off-again” policy on electric vehicles.
“We’re shifting in a way we’ve never shifted before,” she said. “These two pieces of legislation are 100% laying the groundwork for transforming the U.S. transportation sector to a clean electricity future, one that is better for our health, one that stimulates the U.S. economy and one that tackles climate change.”
But while the federal government has sent strong signals to consumers and the auto industry, it will be up to state and local governments to help make ubiquitous electric vehicle charging a reality.
“The states that proactively embrace this industry … will reap the benefits in terms of economic development, job creation and investment in the state,” said Cory Bullis, a senior public affairs manager for FLO, a Canadian manufacturer and operator of charging stations that cut the ribbon in October on its first U.S. facility in Auburn Hills, Michigan. “For states to effectively make use of these federal funding opportunities, they also need to do the work to understand what are their charging infrastructure needs.”
‘EVs are breaking through’
The bipartisan infrastructure law passed by Congress last year included $7.5 billion to build out a nationwide network of more than half a million vehicle charging stations. About $5 billion of that is dedicated to the National Electric Vehicle Infrastructure formula program, which will provide each state a share of funding that mirrors its share of federal highway aid. The other $2.5 billion is for discretionary grants for charging and fueling infrastructure aimed at increasing charging access in “rural, underserved and overburdened communities.”
All 50 states, Washington, D.C., and Puerto Rico have submitted and had their NEVI plans approved by the Federal Highway Administration, unlocking more than $1.5 billion in funding for the 2022 and 2023 fiscal years that’s expected to help build charging systems covering about 75,000 miles of highway. If all goes to plan over the next five years, the nation will have charging stations every 50 miles along the federal highway system, with some exceptions.
Iowa’s plan includes about $7.6 million for fiscal year 2022 from the National Electric Vehicle Infrastructure (NEVI) Formula Program, with estimated funding of $10.9 million in fiscal 2023. There are 742 miles of charging corridors designated as ready or pending in Iowa.
“I was surprised that all of the states submitted plans and are pursuing the money,” said Chris Bast, a former deputy director at the Virginia Department of Environmental Quality who is now director of EV infrastructure investments at the Electrification Coalition, a nonprofit that promotes policies to speed widespread adoption of electric vehicles.
He noted that the apportionments for states under the NEVI program aren’t huge in the grand scheme of federal highway funding and wondered if the money would be worth the effort for state officials, particularly in places not seen as particularly welcoming to electric vehicles.
“Often anything that smells like climate action or clean energy … people go to their priors and head to their corners,” he said. “But I think EVs are breaking through and EV charging is breaking through. States across the country no matter if they’re red, blue or in between are going after the money.”
‘Now is a great time to step up to the plate’
While the infrastructure law provided direct money to build charging infrastructure, the electric vehicle components of this year’s Inflation Reduction Act are mostly centered around tax credits.
Achieving a net-zero emissions economy by 2050, the Biden’s administration’s goal, will require all new passenger vehicles and medium- and heavy-duty vehicles to be electrified “no later than 2035 and 2045, respectively,” per a report Baldwin co-authored for Energy Innovation.
That means the country must “swiftly build sufficient charging infrastructure to ensure a predictable driver experience while reducing range anxiety,” the report says. At the same time, Congress and President Joe Biden saw the Inflation Reduction Act as a chance to make domestic production of electric cars and trucks and the components needed to build them a top priority.
The IRA extends tax credits for new passenger electric vehicles, creates a new tax credit for commercial electric vehicles and used electric vehicles and lays out new sourcing requirements for electric vehicle components, intended to foster growth of battery and mineral industries in the United States and countries in which the U.S. has free trade agreements, Baldwin said.
The legislation also extends a federal tax credit on charging equipment through 2032 – 30% up to $1,000 for an individual and 6% with a maximum credit of $100,000 per unit for commercial uses — though it must be placed in a low income or rural area, per an analysis by the Electrification Coalition.
“Those send a signal to automakers that say if you build it we have the supports in place to make sure people buy it,” Bast said.
But states can and should do more, Baldwin and Bast said.
More states, for example, could adopt rigorous emissions standards aimed at phasing out internal combustion cars and new rules targeting emissions-heavy trucks and other large commercial vehicles as in New Jersey, Oregon, Washington and elsewhere, Baldwin said. States could also add their own electric vehicle incentives and tweak fees levied on electric cars in lieu of gas taxes, which pay for road construction in many states. The fees can vary widely, from $50 per year in Colorado to $200 in Ohio and Arkansas to $225 in Washington, per the National Conference of State Legislatures.
Virginia, for example, is rolling out a voluntary system in which drivers pay based on miles traveled instead of a higher fixed fee.
“States still play a leadership role in ensuring this EV transition is smooth and easy for consumers and beneficial for the economy,” Baldwin said. “Now is a great time to step up to the plate and take action.”
States can also take a cue from the federal government, which created the Joint Office of Energy and Transportation, linking the U.S. departments of Transportation and Energy to help coordinate efforts around clean transportation, Bast, the former Virginia official, said, noting that many state agencies don’t have experience working together on issues like charging infrastructure, which incorporates the electric grid, the road system and other policy areas.
“The investments in the infrastructure law and the Inflation Reduction Act really throw the window open for state and local policy action,” he said.
State and local governments can take the lead by electrifying their own fleets, examining permitting regimes for charging infrastructure, linking charging companies and potential host businesses as well as identifying communities that might be eligible for charging infrastructure grants.
“Your work will either make it easier for EVs or harder for EVs,” he said.