President Joe Biden has made electric vehicle development a priority under a $2 trillion infrastructure bill put forth by his administration, promising to install 500,000 charging stations across the US by 2030.
The $174 billion plan also includes a host of subsidies for those who purchase electric cars and funding to retool factories and to boost the domestic supply of batteries as well as grants and incentive programs for charging infrastructure.
If the bill becomes law, it will represent the government’s biggest effort yet to target transport emissions, which account for 60 percent of the greenhouse gasses released in the US. It would also be a huge step toward Biden’s goal of decarbonizing the American economy by 2050.
The new push for electric cars are a U-turn away from the policies of Biden’s predecessor. The Trump administration moved to weaken federal fuel economy rules for cars and light trucks, going as far as to sue the state of California for reaching a voluntary agreement with several automakers to impose its own stricter standards.
What the proposed legislation lacks, however, is any language about phasing out the sale of cars operating on traditional fuel, a measure seen in China and many European countries where the transition to carbon free transport far outpaces efforts in the US.
Still, the commitment to building a half a million stations – increasing by ten times on the US’s current supply – is pitched to relieve charge anxiety, which most US consumers cite when choosing against buying an EV out of fear they may be left stranded when their batteries run out of juice.The new efforts don’t only target privately-owned vehicles. The Biden administration has also pledged to electrify all 600,000 vehicles in the federal motor pool – a massive boost from the current 3,000. The infrastructure plan also calls for electrifying 20 percent of the nearly 500,000 school buses operating in the US with a grant program administered through the Environmental Protection Agency.
But, as most US media have pointed out since the infrastructure bill was unveiled last week, government support for expanding EV charging won’t, by itself, be enough to shift consumer preferences.
Out of the 270 million cars, trucks and SUVs on American roads, a bare 1 percent of them are battery operated. And despite the rapid growth in their popularity in the past several years, EVs still only accounted for 2 percent of sales in the American new car market last year. EVs also typically cost about $10,000 more than similar conventional cars and trucks.
Another factor that’s difficult to overcome is the complexity and expense of building the charging network itself. The charger-building industry will likely need federal intervention on permitting and cost-sharing rules for EV charging stations to clear regulatory bottlenecks at state and local levels, Chris Nelder, who studies EV-grid integration at RMI, an energy and environment policy organization that promotes clean energy, told The Wall Street Journal.
Building charging infrastructure is “really slow and really expensive. We need a whole lot more support,” Nelder said. “It’s going to take money, it’s going to take authority, it’s going to take leadership and the federal government to step in.”
What’s more is that the costs of EV chargers vary based on the “level” of charger. The higher the level, the quicker the charge and the more expensive it is to install.
“It is a big pill to swallow for anybody,” Mark Wakefield, a managing director and global co-leader of the automotive and industrial practice at the AlixPartners consulting firm told CNBC. “These are really, really expensive, especially these fast chargers,” – the type some automakers are promising will take as little as 10 minutes to charge upcoming EVs about 80 percent. That compares with lower-level chargers, including home outlets, that take several hours. Level three chargers cost $120,000 to $260,000 installed on average, according to AlixPartners. “These are not cheap,” Wakefield said.
Still, many analysts in electric car advocates in the US say the Biden infrastructure plan is just the push the economy needs to embrace an EV future.
“Biden’s plan could help supercharge” the market, Anastasia Amoroso, a strategist at the private-banking arm of JP Morgan chase, told The Wall Street Journal. “The plan puts the right and similar incentives in place that have helped drive EV adoption in Europe and China.”
Automakers see the writing on the wall. General Motors, Volkswagen and Ford Motors have made big EV promises, with General Motors planning to go all electric by 2035. But they, too, have called on the Biden administration to provide more grants, loans, tax credits and tax deductions to promote research and manufacturing.
At present, there are about 41,400 EV charging stations in the US, according to the Department of Energy. Fewer than 5,000 are fast chargers. That compares with more than 136,400 gas stations, according to the GasBuddy app.