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The Federal government recently passed two new laws that make significant investments in electric vehicles, electric vehicle charging and clean energy (i.e. solar, battery); namely, the Bipartisan Infrastructure Law (BIL) and the Inflation Reduction Act(IRA). To summarize, the BIL provides funding for public electric vehicle charging through competitive solicitation processes run by public agencies. On the other hand, the IRA primarily offers guaranteed credits and rebates to individuals and businesses that cover partial costs to purchase electric vehicles as well as acquire and install charging and clean energy equipment. This is in addition to loans and grants for electric vehicle manufacturing and clean energy investments. The following sections go into more detail on both laws. A list of useful links for further reading, if desired, is made available at the end.
The Bipartisan Infrastructure Law (BIL), was passed in November 2021 with the primary objective of investing in the nation’s infrastructure and improving its competitiveness. In addition to investments in roads, rail, airports and ports, BIL allocates funds for a nationwide network of electric vehicle (EV) chargers. BIL contains $7.5billion for investment in electric vehicle chargers, with the goal of 500,000 public EV chargers by 2030.
The $7.5billion is allocated amongst two programs:
NEVI will deploy $5billion of capital for electric vehicle chargers along highways, specifically, Alternative Fuel Corridors (AFC), which were approved by the Federal Highway Administration (FHWA). Once a fully built network along the highway has been established, any remaining funds will go toward developing public EV charging in other locations (e.g. public parking, schools, facilities, and shopping centers).
The NEVI Formula Program requirements stipulate that:
In addition to installing new electric vehicle charging stations, NEVI funds may also be used to upgrade and expand existing charging stations.
Like the NEVI formula program, the Discretionary Grant program(DGP) is a competitive grant program that will provide $2.5billion in funding for EV charging and other alternative fuel (natural gas, propane, and hydrogen) infrastructure. These funds will only be open to applications from local governments and non-profit organizations.
DGP comprises two separate $1.25 billion programs: Corridor Charging Grant Program and Community Charging Grant Program, which are described in more detail below:
The Corridor Charging Grant Program provides funds for EV charging plus other alternative fuel (natural gas, propane, and hydrogen) infrastructure along Alternative Fuel Corridors.
The Community Charging Grant program provides funds for EV charging and alternative fuel infrastructure in rural, low and moderate income communities as well as communities with a low ratio of private parking spaces.
As of December 2022, State DOTs (department of transportation) plans for NEVI program funds have been approved by the Federal Highway Administration (FHWA). Each state DOT can now proceed with funding solicitations with the first grants expected to be made in 2023. Guidance on how the Discretionary Grant Program funding will be distributed is yet to be announced.
The Inflation Reduction Act (IRA) was signed into law on August 16, 2022 as a $370 billion effort to lower energy costs for families, accelerate private investment in clean energy and strengthen supply chains for essential minerals and components. All of which is expected to create more jobs and increase economic opportunities for all Americans.
This bill offers a host of tax credits, grants and loan guarantees for clean energy and electric vehicles, which are explained in more detail below.
For electric vehicles, the following funding is available through the Inflation Reduction Act:
The IRA Clean Vehicle Credit extends the previously available new vehicle credit offered to purchasers of electric vehicles. New EV buyers are eligible for a $7,500 credit off the vehicle price where income and vehicle price requirements are met. Vehicles must be assembled in the US and critical components must be sourced from the US. Manufacturers who will meet the requirements in 2023 are listed on the IRS website (link). This credit will be available until 2032.
A new credit for previously owned electric vehicles was introduced and will be available until 2032. This credit offsets up to $4,000 off the cost of a used electric vehicle bought from a dealer.
A credit is available to businesses replacing diesel or gasoline vehicles with hybrid or fully electric vehicles. 30% of the cost of the new vehicle is offset if the new vehicle is an all electric vehicle. 15% of the cost of the new vehicle is offset if the vehicle is a hybrid.
In addition to credits for vehicle purchases, a credit is available for the installation of electric vehicle charging and alternative fuel (e.g. hydrogen) infrastructure. The Alternative Fuel Vehicle Refueling Property Credit will reimburse businesses 6% of the cost (up to $100,000) of charging and clean fuel infrastructure with the requirement that infrastructure is located in low income and non-urban areas. The credit will also cover bi-directional charging equipment and charging for two(2) and three(3) wheel vehicles.
The Alternative Fuel Vehicle Refueling Property credit is also available to individuals; offsetting 30% of the cost (up to $1,000) to purchase and install electric vehicle charging equipment.
IRA also includes grants and direct funding that will accelerate investment in domestic manufacturing of electric vehicles, add electric vehicles to the United States Postal Service fleet as well as fund heavy duty electric vehicles, including school buses.
In addition to funding for electric vehicles, the IRA provides funding for clean energy investment and equipment purchases. Notably, the IRA will cover 30% of a home’s expenditure on new clean energy equipment (including solar and battery storage with minimum capacity of 3kWh) through the Residential Clean Energy Tax Credit. Beyond funding for clean energy equipment purchases, the IRA provides funding for energy efficiency home improvements, as well as for the development of new energy efficient homes.
Furthermore, the IRA contains funding for investments in energy infrastructure and greenhouse gas emissions reducing projects; the largest program being $27billion for greenhouse gas emission reducing projects through competitive grants awarded by the Environment Protection Agency.
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