The White House has announced its plans to invest a combined $15 billion across two ventures that aim to drive electrification and encourage EV adoption in the United States.
Over the past few years, there has been an industry-wide push towards electrification. More OEMs are electrifying, or planning to electrify, their vehicle line-ups at an exponential rate. This is very often in response to strict emission guidelines and new ICE sale deadlines set by governing bodies and governments to drive EV adoption rates worldwide. The latest of these efforts comes from the American government, who recently announced a new bill that similarly encourages the use of EVs. Motioned by a bipartisan group of senators, the Infrastructure & Investment Jobs Act invests $550 billion into a number of physical infrastructure projects. Among these are large investments into EV charging infrastructure and electric buses.
For EV charging infrastructure, the bill allocates $7.5 billion to facilitate the development of a national network of chargers across the United States. While this investment will aid long distance travel for EVs, it may not be large enough to satisfy President Biden’s prior goal of building 500,000 chargers nationwide. Chargers on this network would be installed at a variety of locations across the region – along highways and in public spaces such as offices and shops. This development, itself, would also cover areas where charging infrastructure is presently more difficult to find – including rural areas and disadvantaged communities. In delivering this widespread development and deployment of new charging infrastructure, this aspect of the bill also plans to support new manufacturing jobs. If the bill is signed off by President Biden, it would represent the first national effort and investment made by the United States related to the infrastructure of electric vehicles.
In a further push towards electrification, the bill also highlights low-emission solutions for public transport, with an focus on electric buses. An investment of $5 billion here would see the U.S. Government deliver thousands of electric and low-emission buses across the nation. Much like the bill’s approach to electric charging, these buses would also be sent to rural communities to encourage EV adoption in those areas that have a lower uptake rate. This particular effort would also see diesel buses be phased out of circulation in vulnerable communities to enhance electrification and minimize air pollution. An additional $2.5 billion has been allocated for ferries, which would similarly work to provide commuters with a cleaner mode of public transportation. Together, these two investments would also set out the controls to guarantee domestically-produced batteries and EVs for America’s public transport network, generating new manufacturing jobs as a result.
Robert Fisher, EV Domain Principal at SBD Automotive, said: “The current market conditions make it very difficult for charge point operators to generate a profit, let alone pay off their debts. The infusion from the government is necessary to ensure business viability in the near term. The forthcoming EV purchase incentive bill will ideally accelerate America’s EV adoption to a point that EV infrastructure becomes self-sustaining. The US Government should also ensure that this purchase incentive is used as effectively as possible by phasing out the incentives for higher-priced vehicles. This has been a successful strategy for countries throughout Europe and in China. It encourages efficiency in the production process, increases the number of EVs on the road, and leads to natural market conditions faster.”
While these investments will work to strengthen America’s EV ecosystem, they are a step down from what had previously been planned for the bill earlier this year. These plans included the allocation of $15 billion to EV charging infrastructure, and an additional $100 billion for purchase incentives such as customer rebates. However, the Infrastructure & Investment Jobs Act could be the first step towards a wider electrification commitment by the U.S. Government. The bill’s announcement followed a report that the White House is aiming for 40% of all new car sales in the U.S. to be EVs by 2030. If enacted, this deadline would mirror those set by the European Union and UK Government to achieve similar goals. Likewise, it could have the potential to strengthen the existing electrification strategies set out by U.S. automakers and further encourage EV adoption among consumers.