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US infrastructure bill will support 400,000 new EV chargers, but more needed

17 November 2021 Kevin Adler

With US President Joe Biden signing the $1.2-trillion infrastructure bill on 15 November into law, IHS Markit analysts say the electric vehicle (EV) industry is especially well-positioned to benefit as funds will soon start flowing to a variety of existing and new energy transition projects.

The bill includes $5 billion to be granted to states to deploy EV charging stations in US and $2.5 billion in grants to public entities to deploy publicly available EV charging infrastructure (as well as hydrogen, propane, and natural gas fueling) 2022 through 2026.

Biden has tapped former New Orleans Mayor Mitch Landrieu to oversee spending authorized by the legislation and co-chair a task force with National Economic Council Director Brian Deese "to prevent waste fraud and abuse" in the distribution of funds.

IHS Markit estimates the investment will support the construction, maintenance, and operation of approximately 400,000 newly installed Level 2 AC (regular) and Level 3 DC fast chargers in the US between 2022 and 2026. Biden announced in the spring a goal of 500,000 charging units nationwide by 2030.

"The Biden administration's investment isn't hyperbole and will have a significant impact on US electric vehicle charging supply," said Mark Boyadjis, IHS Markit global automotive technology lead. "However, even an investment at this scale will come up short against the rapid growth of electric cars hitting the road soon, pointing to a need for additional support from municipal, utility, and private investments to fill the gap."

The new programs are "an important first step in jumpstarting public investment in a nationwide charging network," added John Bozella, president and CEO of the industry trade group Alliance for Automotive Innovation, when the US House of Representatives passed the bill two weeks ago, paving the way for it to become law. "Realizing this and other fair and necessary conditions for a successful EV market will be critical … to achieving our shared goal of 40 to 50 percent EV penetration by the end of the decade."

The infrastructure bill brings other benefits to the auto industry as well, IHS Markit said, from improved road conditions, to supporting new EV battery manufacturing facilities, to incentives for electrification of commercial vehicles. The US Department of Energy (DOE) has a total of $7 billion to work with to support the battery supply chain for both EVs and battery-storage technologies, according to Carla Frisch, acting director of DOE's Office of Policy.

700,000 public chargers needed

IHS Markit expects that EVs on the road in the US will increase from 1.5 million in 2020 to about 9.3 million units in 2026. This will require support by about 700,000 chargers, compared to the estimated 100,000 public chargers in operation now.

The figures above do not include the 3.2 million domestic, private Level 2 chargers expected to be installed in residential settings through 2026.

Surveys indicate that 75% of US EV owners prefer to charge at home, IHS Markit said. "But a successful transition to a national electric vehicle fleet requires a way for those without that capability to charge in a convenient manner at public facilities. Overall, only 63% of US households have access to a garage, and that figure is less in urban areas where more than 50% of EV sales occur," Colin Bird-Martinez, automotive consulting principal analyst, said.

As EV battery capacity improves, some of the issue will be resolved by lessening the need for such frequent charges, said Graham Evans, director, automotive supply chain & technology for IHS Markit. "However, from a consumer perception perspective, abundant EV charging is needed to encourage skeptical consumers that a battery EV is workable for them," he said.

Growth in EVs

EV sales are growing rapidly in the US, and the latest data from IHS Markit puts the share of light-duty new car sales on a monthly basis at about 4.3%, up from about 2-2.5% a year ago.

More growth could come if the Build Back Better bill, which is part of the FY2022 budget reconciliation measure in the US, includes significant incentives for buying a new EV. At the moment, the legislation would allow for rebates of up to $12,500 for a new EV purchase, including a bump for cars made in the US with union labor.

The auto industry itself continues to invest in new technology and retool its manufacturing and supply chains, said Bozzella. The US industry will have invested $330 billion for battery EVs, plug-ins, and fuel cell EVs by 2025, he said. "Collaboration on a comprehensive strategy," both government and private sector, "will be key" to reaching the nation's ambitions for changing the face of vehicle transport, he said.

As one example, GM announced in October that it will investment nearly $750 million to support installations of its Ultium Charge 360 system at homes, workplaces, and public charging stations in the US and Canada. The program will be coordinated through its GM dealerships.

"These charging stations will be available to all EV customers, not just those who purchase a GM EV. Today, nearly 90 percent of the U.S. population lives within 10 miles of a GM dealership," GM said.

Posted 17 November 2021 by Kevin Adler, Chief Editor

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