US Infrastructure Bill’s EV Charger Funding

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Infrastructure Bill’s EV Charger Funding a Good Start,
but More Funding Likely to be Needed to Meet Growing
Demand

IHS Markit expects US infrastructure bill to supplement only
66 percent of required US EV charger growth through 2026

Today President Joe Biden signed into law the $1.2 trillion
infrastructure bill. The bill is expected to support the automotive
industry in many ways, from improved road conditions, cleaner
commercial vehicles, electric vehicle battery factories, battery
recycling, and lithium mining and refining. However, one of the
largest EV appropriations will be toward vehicle charging. Some
$7.5 billion has been allocated to alternative fuel charging,
primarily for electric vehicle chargers and supporting
infrastructure across the country.

IHS Markit estimates that the US federal investment will
directly contribute to the construction, maintenance, and operation
of approximately 400,000 newly installed Level 2 AC and Level 3 DC
Fast chargers in the US between 2022 and 2026. Under the details
outlined in the bill, chargers must be open-sourced, meaning
funding cannot go to Tesla’s proprietary Supercharger network,
unless it opens it up to non-Tesla vehicles.

However, IHS Markit believes this investment is unlikely to meet
the growing demand of the US plug-in EV fleet. Along with the
nation’s current electric vehicle charging infrastructure of
100,000+ chargers at 50,000 publicly available locations, IHS
Markit estimates there will need to be about 600,000 additional
chargers installed at another 100,000 public locations by 2026.

The figure does not include the 3.2 million domestic, private
Level 2 chargers expected to be installed in residential homes –
mostly in garages – over the investment period.

This bill represents the first large-scale national investment
in EV charging infrastructure. “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.”

IHS Markit expects that the EV Vehicles in Operation (VIO) on the
road in the United States will increase from 1.5 million in 2020 to
about 9.3 million units in 2026. IHS Markit estimates that the
nation needs approximately 700,000 cumulative chargers by 2026 to
meet that demand, and the 400,000 that the US bill will support is
not enough to get us there entirely. During the 5-year investment
period, Federal subsidies are only expected to fulfill two-thirds
of what is required to energize the future EV fleet in the US.

Additionally, IHS Markit forecasts EV battery capacity to
steadily increase over the coming years. “This will allow the
average EV to travel further on a single charge, in principle
lessening the need for such abundant infrastructure, said Graham
Evans, director, automotive supply chain & technology, IHS
Markit. “However, from a consumer perception perspective, abundant
EV charging is needed to encourage skeptical consumers that a BEV
is workable for them.”

75 percent of US EV owners prefer to charge at home, 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 percent of US
households have access to a garage and that figure is less in urban
areas where more than 50 percent of EV sales occur. “If EVs remain
impractical for apartment, condo, and historic home dwellers, we
cannot adequately reach the administration’s stated EV goals,” said
Colin Bird-Martinez, automotive consulting principal analyst, IHS
Markit.

The bill sets aside $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, hydrogen
fueling, propane fueling, and natural gas fueling infrastructure
through 2022-26.

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