Principles for Federal Investment in Transportation Electrification: The Policy Formula for Speed, Scale, Jobs, and Equity | EVgo

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Mar 11, 2021

Summary:

The federal government has an opportunity to accelerate the electrification of transportation in order to reduce greenhouse gas emissions, create jobs, and stimulate economic growth that benefits all Americans. As the Administration and Congress work toward implementing policies and regulations to enable the transition to zero emissions vehicles for individual drivers and fleets, EVgo offers six key ingredients for achieving success informed by our decade plus of experience as a pioneer in transportation electrification.

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Six Key Ingredients:

1. Complementary Policies: Support Both EV Sales and Charging Infrastructure

2. Speed of Implementation: Leverage Existing Institutional Capacity by Administering Grants and Rebates through States

3. Equity: Enable ‘Electric For All’ with Policies that Support Environmental Justice and Recognize Diverse Charging Solutions to Meet Diverse Needs

4. Harness Private Sector Capital: Design Policy to be an Investment Multiplier

5. Recognize EV Market and Technology Dynamism with Outcome-Based Policies

6. Reduce Institutional Friction to Streamline Program Deployment

1. Support Both EV Sales and Charging Infrastructure with Complementary Policies

Well-crafted policies targeting electrification of the transportation sector are poised to accelerate needed job creation, air pollution reductions, and strides toward racial justice. In order for that vision to become a reality, more EVs need to be manufactured and purchased by more American families, and the right amount of infrastructure to charge those EVs must be built. To be most effective, policy actions to stimulate both EV sales and infrastructure buildout need to work in tandem, bolstering creation of sustainable US jobs in manufacturing, construction, sales, and operations across the EV value chain. Specifically, the 30D vehicle tax credit must be extended and reformed, and it should be paired with a refundable extension and expansion of the 30C alternative refueling property tax credit. Similarly, investments in charging infrastructure proposed under last year’s H.R.2 or the recently released Climate Leadership and Environmental Action for our Nation’s (CLEAN) Future Act should be paired with consumer side incentives like Senator Schumer’s Clean Cars For America Proposal, so that EV adoption occurs roughly synchronously with deployment of charging infrastructure, as a sustainable public charging industry needs a robust EV market to drive us age and reinforce its economics.

2. Leverage Existing Institutional Capacity by Administering Grants and Rebates through States

To ensure federal policies ‘build back better’ quickly, the Administration and Congress should take advantage of states’ existing capacity to administer funds and manage programs. State energy offices have a successful track record, dating back to ARRA’s 2009 passage and the implementation of DOE’s multi-billion dollar State Energy Program for clean energy which spanned a diversity of sectors, technologies, and geographies. More recently, state energy offices have been administering EV charging infrastructure grants with Volkswagen Appendix D “Dieselgate” settlement funds, which means they are ready to use their expertise with competitive programs on vehicle electrification pilots and infrastructure rebates alike.

3. Equity: Enable ‘Electric For All’ with Policies that Support Environmental Justice and Recognize Diverse Charging Solutions to Meet Diverse Needs

To enable mass adoption of electric vehicles in all communities and geographies, investments in fast charging (I.e., DCFC) and Level 2 charging across urban, suburban, workplace, home, rural, and corridor use cases will all be necessary. In particular, the effects of climate change on public health and economic well-being are felt most acutely within communities of color, tribal lands, and low-income communities. Solutions to the climate crisis must be tackled with environmental justice as a top priority. Senator Schumer’s Clean Cars For America Proposal is a model for expanding access to EVs across income levels by recognizing that additional incentives for income qualified Americans are necessary to ensure the benefits of EV adoption are spread across all demographics. On infrastructure, public charging is necessary in urban and suburban areas with a high density of multiunit dwellings to ensure that the 30% of Americans who don’t have access to home charging can conveniently charge an EV. Some rural communities will have charging infrastructure needs that may not be on FHWA designated corridors. Applying empirical tools like EPA’s EJScreen to infrastructure programs will ensure that charging deployments prioritize communities that have felt disproportionate environmental impacts. State funding agencies receiving federal funds should use points-based systems to reward deployments in environmental justice communities rather than prescribe (or proscribe) specific locations. 1

4. Harness Private Sector Capital: Design Policy to be an Investment Multiplier

The federal government is uniquely positioned to accelerate transportation electrification by leveraging hundreds of millions of dollars of private capital via public/private partnerships. Federal support can reduce the private sector risk of investing into early-stage markets and bring private capital off the sidelines. With respect to EV charging, federal policies should act as a market stimulant to incent credible charging companies to extend their infrastructure footprints ahead of when they otherwise might if based on EV sales alone. Public/private partnerships with cost share requirements ensure that private companies have the capacity to deliver on the projects for which they receive government support. Additionally, policy instruments like standards for ‘electric vehicle miles traveled’ for fleets de-risk private sector investments and drive both electrification of the vehicles with the highest environmental impact and ability to help support expanded infrastructure development.

5. Recognize EV Market and Technology Dynamism with Outcome-Based Policies

EVs and EV charging technologies – and their performance and cost metrics – are evolving rapidly, so federal policies should be anchored around societal outcomes, like drivers served, electrified vehicle miles traveled, and jobs created; rather than prescribing standards and targets related to equipment that could become obsolete during near-term program implementation. Regarding employment, EVgo’s internal analyses show that each DC fast charger installed creates approximately 1 full time equivalent (FTE) job, the vast majority of which is in siting, construction and installation. Infrastructure jobs like these cannot be offshored, and hence should be a focus for policymakers. Additionally, to achieve geographic expansion of electrification, grant multipliers and other incentives for hard-to-reach communities can accelerate EV uptake and charging infrastructure deployment where battery electric vehicle adoption has remained low. Fleet electrification has shown outsized environmental, economic, and national security benefits, and even beyond electrifying the 650,000 federal vehicles called out in President Biden’s Executive Order, policy levers to accelerate the electrification of rideshare, delivery, logistics, municipal, and corporate fleets via tax credits and other incentives can mean millions more vehicles going electric.

6. Reduce Institutional Friction to Streamline Program Deployment

There is no time to waste in getting the US economy and greenhouse gas emissions reduction efforts back on track. While funding support for electrifying transportation is a linchpin that can ignite market activity, the speed with which results can be delivered will be a function of effective collaboration between a multitude of institutions and stakeholders: economic opportunities worth private capital risk, utilities facilitating permitting and interconnection, site hosts and landlords welcoming EV charging, local governments expediting permits and inspections, and the federal government helping spur innovation and spread best practices. Much like how the SunShot Program at the U.S. Department of Energy during the Obama-Biden Administration tackled not just “hard costs” of solar panels but also the “soft costs” to scale photovoltaic deployments, the Biden-Harris Administration should establish a high level EV Deployment Task Force with representation from industry ‘implementers’ and the government agencies accountable for meeting the Administration’s goals in order to accelerate the supply chain and identify areas where permitting and other processes can be improved to reduce time and cost to install charging stations and manufacture new EVs.


1 A best practice in this regard is North Carolina, where the Department of Environmental Quality released a scorecard with transparent criteria detailing how it will score applications.