Love ‘em or hate ‘em, electric vehicles (EVs) are not going anywhere.
While currently expected to account for only 5.4% of all new car sales in the U.S. in 2022, some analysts project this percentage will jump to almost 30% by 2030. Recent federal legislation aims to address this ever-expanding demand for a larger, more reliable EV network. On November 15, 2021, Congress enacted, and President Biden signed into law, the Infrastructure Investment and Jobs Act (IIJA).
While the $1.2 trillion IJJA certainly offers incentive programs outside of expanding the EV network directly through recycling programs, energy efficiency, and improving energy usage at public schools (to name a few), the IIJA also specifically sets aside $7.5 billion toward building a national network of 500,000 EV charging stations.
What Does the IIJA Provide and Who Can Get Access to It?
The U.S. already has about 113,600 charging outlets for EVs, mostly in California. Of the $7.5 billion provided for by the IIJA to build the EV network further, $2.5 billion of that money will be allocated for charging and refueling infrastructure grants, with the remaining $5 billion going to the National Electric Vehicle Charging Program.
The $2.5 billion portion of the IIJA will be used in the form of grants to “eligible entities” for the strategic mobilization of the EV charging infrastructure as well as to hydrogen, propane, and natural gas fueling networks. Eligible entities with access to these grants can include local governmental units, states and their political subdivisions, larger metropolitan planning organizations, American Indian tribes, U.S. territories, special purpose districts or public authorities with a transportation function (e.g., a port authority), and groups of the above entities. An eligible entity receiving a grant under this program can also use the grant funds to contract with private entities to acquire, construct, install, maintain, and/or operate the EV charging infrastructure.
This $2.5 billion is not free, however, as the eligible entities are required to adhere to strict location and private equity contracting requirements to get access to any of this money. States must submit deployment plans to have access to the funds. In addition, states will be subject to multiple considerations by the U.S. Department of Transportation. Finally, there is a $15 million cap for any single grant awarded.
As for the remaining $5 billion provided for by the IIJA through 2026, it will go to the National Electric Vehicle Formula Program, which will be used by the individual states for the deployment of the EV charging infrastructure and the establishment of an interconnected network for data collection, access, and reliability. Similar to the $2.5 billion grants, this $5 billion comes with strict eligibility requirements, namely that the charging network must be made publicly available and located along a designated “alternative fuel corridor.”
In short, the $5 billion may only be used for the acquisition, installation, operation, and maintenance of the EV charging network, as well as to ensure proper data sharing amongst the existing EV charging network.
“We are modernizing America’s national highway system for drivers in cities large and small, towns and rural communities, to take advantage of the benefits of driving electric,” U.S. Energy Secretary Jennifer Granholm said in a press release announcing the five-year plan. “The bipartisan infrastructure law is helping states to make electric vehicle charging more accessible by building the necessary infrastructure for drivers across America to save money and go the distance, from coast to coast.”
Congress’ IIJA legislation should provide a significant stimulus to expand the already rapidly growing EV infrastructure. As the number of EVs increase on our roads and highways, we can expect to see the number of EV charging stations grow significantly as the individual states get access to the $7.5 billion funds. Environmentalists applaud this growth for its anticipated benefits in reducing U.S. carbon emissions.