States are now required to take measures and encourage EV sales
Electric vehicles have presented something of a chicken-and-egg conundrum for a number of years.
The widespread adoption of electric vehicles, which was viewed as essential to reducing the largest single source of carbon emissions in the United States, was not possible before the infrastructure that would allow drivers to recharge their vehicles regardless of where they were going was in place. And those charging stations weren’t going to be installed until a significant number of people started driving plug-in electric automobiles.
According to those with expertise in the relevant business, this is one of the factors that contributed to the stagnant growth of sales of electric vehicles during the course of the majority of the preceding decade.
Nevertheless, the times are changing. Commercials that are currently airing on radio and television show that major automakers in the United States, such as Ford and Chevrolet, are diving headfirst into the electric vehicle market. They are doing so in an effort to compete with newer companies, such as Rivian, for a portion of the lucrative pickup truck market. And rather than delivering a single electric model here and there, several automobile manufacturers plan to transition to producing predominantly electric vehicles over the course of the next twenty years.
According to Pew Research, the number of charging stations for plug-in electric cars increased by more than three times between the years 2015 and 2021. However, this infrastructure has largely remained concentrated in large metropolitan centers.
And the billions of dollars in direct funding for electric vehicle charging infrastructure for states that is included in the bipartisan infrastructure law that was passed in 2021, as well as the variety of tax credits that were included in the more recent Inflation Reduction Act, could turbocharge that trend.
Sarah Baldwin, director of electrification for Energy Innovation, a nonpartisan energy and climate policy think tank, said that “we are living through a historic moment in terms of federal leadership on climate and clean energy technologies.” “We are living through a historic moment in terms of federal leadership on climate and clean energy technologies,” she said. Baldwin stated that the measure taken by the federal government marks the end of a “on-again, off-again” strategy towards electric automobiles.
“We’re shifting in a way that we’ve never shifted before,” she added. “We’ve never shifted in this way before.” “These two pieces of legislation are 100% creating the framework for transitioning the transportation sector in the United States to a clean power future,” which is healthier for our health, which boosts the economy of the United States, and which combats climate change.
However, despite the fact that the federal government has communicated clearly with customers and the automotive sector, it will be left to state and local governments to assist in the implementation of widespread electric vehicle charging infrastructure.
According to Cory Bullis, senior public affairs manager for FLO, a Canadian manufacturer and operator of charging stations that recently opened its first facility in the United States in Auburn Hills, Michigan, “the states that proactively embrace this industry… will reap the benefits in terms of economic development, job creation, and investment in the state.” “In order for states to properly make use of these options for federal financing, they also need to perform the work to establish what their charging infrastructure needs are,”
“Electric Vehicles Are Making Headway”
The infrastructure bill that was unanimously approved by Congress the previous year includes $7.5 billion to fund the expansion of a network of more than 500,000 charging stations for electric vehicles across the country. The National Electric Vehicle Infrastructure formula program, which will provide each state with a portion of cash that replicates its share of federal highway financing, will get around $5 billion of that total. It is one of the programs that will be funded with this money. The remaining $2.5 billion will go toward discretionary awards for charging and fueling infrastructure in “rural, underprivileged and overloaded populations.” The goal of these grants is to increase charging access in those areas.
The NEVI plans of all fifty states, the District of Columbia, and Puerto Rico have been submitted to and approved by the Federal Highway Administration. This has made it possible to release more than $1.5 billion in funding for the fiscal years 2022 and 2023. This funding is intended to assist in the construction of charging systems that will cover approximately 75,000 miles of highway. During the next five years, if everything goes according to plan, the United States will have charging stations around every 50 miles throughout the federal highway system, with minor exclusions.
The National Electric Vehicle Infrastructure (NEVI) Formula Program is expected to provide approximately $7.6 million to the state of Iowa during fiscal year 2022, and it is predicted that funding will increase to $10.9 million during fiscal year 2023. In Iowa, there are a total of 742 miles of charging corridors that have been designated as either ready or pending.
Chris Bast, a former deputy director at the Virginia Department of Environmental Quality who is now the director of EV infrastructure investments at the Electrification Coalition, a nonprofit that promotes policies to speed up the widespread adoption of electric vehicles, said, “I was surprised that all of the states submitted plans and are pursuing the money.”
He pointed out that the apportionments for states under the NEVI program aren’t particularly large in the grand scheme of things when it comes to the funding that the federal government provides for highways, and he questioned whether or not the money would be worth the effort for state officials, particularly in areas that are not perceived to be particularly welcoming to electric vehicles.
“Most of the time, anything that even remotely reeks of climate change or clean energy… “He indicated that individuals would go to their priors and then head to their corners.” “However, I believe that electric vehicles and EV charging are on the verge of breaking through. Every state in the country, regardless of political affiliation (red, blue, or anywhere in between), is competing for the money.
“If you want to make a difference, now is the moment to do it,”
The electric car components of the Inflation Reduction Act that was passed this year are mostly focused on tax incentives. This is in contrast to the infrastructure bill, which provided direct funding to develop charging infrastructure.
According to a report that Baldwin co-authored for Energy Innovation, in order to meet the goal of the Biden administration of achieving a net-zero emissions economy by 2050, all new passenger vehicles, medium- and heavy-duty vehicles, and medium- and heavy-duty vehicles must be electrified “no later than 2035 and 2045, respectively.”
According to the findings of the survey, this indicates that the nation needs to “rapidly create sufficient charging infrastructure to assure a predictable driver experience while lowering range anxiety.” At the same time, members of Congress and former Vice President Joe Biden regarded the Inflation Reduction Act as an opportunity to elevate the domestic manufacturing of electric cars and trucks as well as the components that are required to construct them to the position of a high priority.
According to Baldwin, the IRA will foster growth of the battery and mineral industries in the United States as well as in countries with which the United States has free trade agreements by extending tax credits for new passenger electric vehicles, creating a new tax credit for commercial electric vehicles and used electric vehicles, and laying out new sourcing requirements for electric vehicle components. All of these provisions are designed to encourage the purchase of electric vehicles.
According to an analysis conducted by the Electrification Coalition, the legislation will also extend a federal tax credit on charging equipment through the year 2032. The credit will be 30% up to $1,000 for an individual and 6% with a maximum credit of $100,000 per unit for commercial uses. However, the equipment will only be eligible for the credit if it is installed in a low income or rural area.
“Those give a signal to automakers that says if you create it we have the supports in place to make sure people buy it,” Bast said. “If you construct it we have the supports in place to make sure people buy it.”
Baldwin and Bast argued that states had the ability to do more and that they should.
Baldwin suggested that additional states could follow the lead of New Jersey, Oregon, Washington, and other states in enacting stringent emission standards with the goal of eventually eliminating cars powered by internal combustion engines as well as new regulations directed at emissions-heavy trucks and other large commercial vehicles. It is also possible for states to institute their very own incentives for the purchase of electric vehicles and to adjust the costs that are imposed on electric vehicles in place of the gas taxes that currently fund the construction of roads in many states. According to the National Conference of State Legislatures, the costs might be quite different from state to state, ranging from $50 per year in Colorado to $200 in Ohio and Arkansas to $225 in Washington.
A voluntary system in which drivers pay based on the number of miles driven rather than a larger fixed price is being implemented in the state of Virginia, for example.
Baldwin stated that “states still play a leadership role” in ensuring that the transition to EVs is made in a way that is “smooth and easy for customers and positive for the economy.” “If you want to make a difference, now is the moment to step up and get involved.”
Bast, a former official in Virginia, noted 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 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 suggested that the states take a cue from the federal government, which created the Joint Office of Energy and Transportation.
“The investments in the infrastructure law and the Inflation Reduction Act really throw the window open for state and local policy action,” he added. “[T]here is a genuine opportunity for state and local policy action.”
Electrifying their own fleets, examining permitting regimes for charging infrastructure, linking charging companies and potential host businesses, and identifying communities that might be eligible for charging infrastructure grants are all things that state and local governments can do to take the lead.
“It will either become easier or more difficult for electric vehicles as a result of your work,” he remarked.
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