States carve out billions in budgets for electric vehicle surge

Source: By Reid Wilson, The Hill • Posted: Tuesday, January 11, 2022

The growth of the electric vehicle market has already spurred billions in tax breaks and spending incentives as states race to attract new manufacturing plants.

In recent months, the electric vehicle manufacturer Rivian has announced plans to open a major facility in Georgia, and Ford has said it will open a multibillion dollar facility in Tennessee. Toyota said last month it would build its first North American battery plant in North Carolina.

The flood of new electric vehicles that consumers will purchase in the coming years has states thinking about how they will handle the demand for charging stations, both at homes and in public places. Those states are also considering how they will replace billions in gas tax revenues for the fuel that electric vehicle owners will not have to purchase.

“We want people to buy electric vehicles. And if we want to encourage people to buy electric vehicles, then we have to make sure that we have the infrastructure available for people to buy electric vehicles so they can actually get the cars charged and not get stuck somewhere,” Utah Gov. Spencer Cox (R) said in an interview.
Cox has proposed $3 million to fund new charging stations in rural areas. New York Gov. Kathy Hochul (D) last week proposed spending $175 million on new charging stations and streamlining the permitting process for installing those stations at businesses and new home sites.

Arkansas and Colorado are developing statewide grant programs for electric vehicle charging stations. Hawaii has redirected some energy tax revenue into electric infrastructure projects. New Jersey has established rules requiring new electric charging stations in multiunit housing. Vermont last year launched a pilot program providing grants for charging stations in multiunit buildings, too.

“There’s not a state that thinks this is not going to happen on some level. It’s a question of how fast,” said Marc Geller, co-founder of the Golden Gate Electric Vehicle Association and vice chair of the Electric Auto Association. “We are seeing an increasing number of states looking at this.”

The federal government has been offering incentives for customers purchasing electric vehicles since then-President George W. Bush’s administration. The Bipartisan Infrastructure Investment and Jobs Act, signed last year by President Biden, will add $7.5 billon in building a national network of half a million charging stations — more than 10 times the existing number of public charging stations.

That network, experts said, is essential to break the tether that some consumers feel. There is always a gas station somewhere ahead; at the moment, there is not always a charging station.

“Right now, most people who have electric vehicles charge their vehicles at home, which works great if you have a garage or a dedicated parking space. But if you live in an apartment or don’t have a garage, it’s often harder to find a charging space,” said Austin Igleheart, a policy associate who tracks electric vehicle legislation for the National Conference of State Legislatures.

The analytics firm Wards Intelligence reported last week that Americans purchased more than 434,000 electric vehicles and 801,000 hybrid models last year. Zero-emission vehicles, which include plug-in hybrids and electric vehicles, made up just over 5.4 percent of all auto sales in the third quarter of last year, according to the Alliance for Automotive Innovation, an industry group. That share has risen by about two percentage points over sales in 2020, and projections suggest the pace of growth is only likely to expand.

But that expansion spells trouble for states that rely heavily on gas taxes for their infrastructure budgets. Oklahoma has enacted a tax on electricity used to recharge vehicles, while legislators in Nevada, Minnesota and Wyoming are considering their own new charges.

Democratic-heavy states have been the earliest to adopt electric vehicles and the most aggressive at building the infrastructure necessary to keep them running. Electric vehicles made up almost 14 percent of new vehicle registrations in California in the third quarter of 2021, and California is home to more than 30 percent of the charging stations nationwide.

But Republicans in conservative states say they, too, see a role in government helping the nascent market along.

“As a conservative, I absolutely believe that the market is going to drive this and the market is going to help us,” Utah’s Cox told The Hill in an interview. “That’s how we’re going to get broad adoption and broad change. We have to allow market forces to do what market forces are doing. It’s already happening.”