An historic investment of $7.5 billion in federal funds for EV charging is on its way, headed for the states. This federal funding, from the Infrastructure Investment and Jobs Act (IIJA) passed by Congress and signed into law in November, will make it easier for state and local policymakers across America to accelerate the electric transportation transition and meet emissions reductions goals they have set for themselves. It will also pave the way for further growth of the more than 15,000 EV-related businesses in the U.S., with tens of thousands of Americans relying on the electric transportation industry for their livelihood. The time is now for states to set themselves up to make the most of this opportunity.
As outlined in AEE’s Implementation Roadmap for states, the funding is set to flow from two buckets: formula funding through the National Electric Vehicle Formula Program and discretionary grant funding through Charging and Fueling Infrastructure. In short, every state will get some aid, but states with a good plan have the chance to make bigger investments with additional federal dollars. Nationally, the Federal Highway Administration is already soliciting feedback on how to distribute these billions, but state leadership is equally critical for optimizing the benefits of federal dollars; they’re the ones that will be tasked with distributing IIJA funding through their transportation and energy departments.
Some states have agencies and clean-vehicle rebate programs in place to make the most of these dollars; however, others risk a slow start because they lack a roadmap for how to move forward. That’s why AEE is advocating for all states to develop a transportation and energy plan with clear responsibilities for their transportation, energy, and environmental departments, as well as energy regulatory agencies, that can lead the transition. These agencies must work together to put the federal funds to work quickly and efficiently and ensure that no communities are left on the sidelines.
A good example of how to do this can be found in Illinois, following last year’s passage of the Clean and Equitable Jobs Act. In addition to making state investments in clean energy, the law prepares state agencies to make the most of federal funding. For instance, the Illinois law calls for a new coordinator of EVs within the state’s Environmental Protection Agency to maximize charging network reach and ensure that the benefits of EV charging are accessible to everyone. Likewise, the Illinois Commerce Commission is tasked with developing guidelines for utilities to develop their EV charging programs, so that when the state issues rebates to companies for their charging station installations on July 1, Illinois utilities will be ready.
This interagency coordination is a great example of the kind of planning needed by state leaders. That’s because, if done properly, government funding will be followed by private sector investments as well. AEE’s analysis of the Economic Impact of Stimulus Investment in Transportation Electrification found that every dollar invested in the clean transportation transition would generate an additional $2.60 in direct private investment. Accordingly, the EV charging business can expect $19 billion in private capital to flow as a result of the IIJA.
There may well be more money coming for EV charging infrastructure, should Congress approve an even larger spending bill to accelerate the energy transition. But the IIJA provides plenty for states to get started, and they can be prepared to capitalize on more funding down the road. With auto manufacturers preparing to fully electrify their model lines, it’s time to get the charging infrastructure in place for drivers to go electric with confidence.
The EV industry is ready. The question is: Are the states?