In November 2021, the U.S. Congress passed the Bipartisan Infrastructure Deal, also known as the Infrastructure Investment and Jobs Act. Signed into law by President Biden on Nov. 15, 2021, this once-in-a-generation type of deal seeks to direct investment funds toward the nation’s critical infrastructure such as roads, bridges, railroads, access to clean drinking water, access to high-speed internet, and initiatives to tackle the climate crisis.
As part of the plan, significant funding would be earmarked to support the adoption of electric vehicles (EVs) along with the important types of materials and infrastructure required for a nationwide shift to be successful.
In alignment with Biden’s ambitions for federal operations to have net-zero emissions by 2050, including a 65 percent emissions reduction by 2030, the U.S. government will also look to shift its fleet of 600,000 cars and trucks to be powered by carbon-pollution-free electricity.
As the United States shifts toward making clean power a major priority, it is a good time for investors to get up to speed with the rollout plan, and to grasp the impact that the focus on electric vehicle infrastructure will have over the decades to come.
- The Infrastructure Investment and Jobs Act sets a priority for critical infrastructure revitalization, including sustainable transportation.
- A joint office of the U.S. Department of Energy and the U.S. Department of Transportation will oversee the support of a nationwide network of electric vehicle chargers.
- State departments of transportation are working on plans to spend funds earmarked for electric vehicle infrastructure.
- The end of summer 2022 will mark a key moment in the shift toward electric-powered transportation in the United States.
Electric Vehicle Charging Action Plan
On Dec. 13, 2021, the Biden-Harris Electric Vehicle Charging Action Plan was announced. The announcement outlined the steps that federal agencies would take to support developing chargers and deploying charging stations in communities across the country. As part of the plan, the U.S. Department of Energy (DOE) and the U.S. Department of Transportation (DOT) would seek to establish a Joint Office of Energy and Transportation to focus on deploying infrastructure for electric vehicles.
On Dec. 14, 2021, U.S. Secretary of Energy Jennifer Granholm and U.S. Secretary of Transportation Pete Buttigieg signed a Memorandum of Understanding to create the joint office, which would oversee the deployment of $7.5 billion over five fiscal years (2022–2026) to build a national electric vehicle charging network of 500,000 chargers. The joint office is also tasked with working closely with stakeholders to collect input and guidance to ensure that the charging solutions are convenient for all Americans, and to focus on filling gaps in rural, disadvantaged, and hard-to-reach locations. The Joint Office of Energy and Transportation website offers webinars, the latest news, and state guidance.
Solicitation for Alternative Fuel Corridors
The DOT is working on the sixth round of Alternative Fuel Corridors designations. This program, created under the Fixing America’s Surface Transportation (FAST) Act in 2015, recognizes highway segments that have infrastructure plans to allow travel on alternative fuels, including electricity. Nominations for Alternative Fuel Corridors designation is a critical step in the designation process and is important because it is connected to National Electric Vehicle Infrastructure Formula Program funding, which is discussed below. The deadline for the sixth round of solicitation is at the close of business on May 13, 2022.
National Electric Vehicle Infrastructure (NEVI) Formula Program
On Feb. 10, 2022, the DOT released its background information, funding eligibilities, and program guidance relating to implementation of the National Electric Vehicle Infrastructure (NEVI) Formula Program. This program is the mechanism for how the federal government will strategically deploy the funds to support the creation of a national network of 500,000 chargers by 2030.
Under the program, state departments of transportation will be required to submit an EV Infrastructure Deployment Plan that describes how the state intends to use the program’s funds in accordance with its guidance. Plans need to be submitted no later than Aug. 1, 2022, with approval of eligible plans by Sept. 30, 2022.
While some people disagree with the cost, $5 billion of the allotted $7.5 billion will be distributed under the NEVI program, and the funds are to be directed to designated Alternative Fuel Corridors. Ten percent of the NEVI Formula Program funds will be set aside each fiscal year for the U.S. secretary of transportation to provide discretionary grants to help fill gaps in the national network.
Discretionary Grant Program for Charging and Fueling Infrastructure
The $2.5 billion discretionary grant program is divided into two distinct $1.25 billion grant programs to ensure that charger deployments meet Biden-Harris administration priorities such as supporting rural change, building resilient infrastructure, and increasing access to EV chargers in underserved communities, to name a few.
From early on, the Biden-Harris administration has made it clear that some of the main priorities would be set around racial equity, serving underserved communities, and tackling climate change. While many issues overlap, the administration launched the Justice40 initiative, which aims to deliver 40% of the overall benefits of federal investments in climate and clean energy, including sustainable transportation, to disadvantaged communities.
Domestic Manufacturing and Jobs
The plan to install electric charging stations in every corner of the country and create a domestic supply chain seeks to position the U.S. as a leader in electric vehicles and a creator of good-paying union jobs. Companies will be needed to manufacture key components, conduct installations, and perform maintenance. Workers will be needed to fill the types of jobs that did not exist only a few short years ago. When viewed from a nationwide perspective, the goal is that the combined efforts will be a strong step toward a more energy-efficient future.
State departments of transportation are working to identify by Aug. 1, 2022, their plans on how to best put NEVI funds to work. The solicitation of new Alternative Fuel Corridors is under way and will be complete by May 13, 2022. As details are finalized over the coming months, it looks as though the end of summer 2022 will mark a key time in the shift toward electric-powered transportation.
The Bottom Line
From the outline of an aggressive plan to revitalize American infrastructure in 2021, to the release of the action plan to create a nationwide network of 500,000 electric vehicle chargers, the U.S. is on the path to a greener future.