Turning federal EV ambitions into reality
President Biden put the weight of his office behind electric vehicles (EVs) as one of the most promising tools to reduce emissions from transportation. In his first six months in office, Biden issued an executive order for electrifying the approximately 650,000 vehicles in the federal fleet and got behind the wheel of Ford's new F-150 Lightning electric truck for a test drive. These measures—one policy action and one media moment—are part of positioning the country and American automakers to meet both the demand for new EVs and ambitious greenhouse gas (GHG) reduction commitments under the Paris climate agreement.
The electrification of transportation plays a key role in the Federal Infrastructure Investment and Jobs Act. The version of the bill passed by the Senate in August has more than $15B in new spending for EVs and charging infrastructure, including school bus, transit, and port applications. President Biden also set a goal for 50% of all new passenger cars and light vehicles to be electric by 2030 and instructed government agencies to implement regulatory policies to achieve that goal.
While the timing and provisions of the bill are still in flux until it is signed into law, it’s clear that the administration has big EV ambitions. Here are three key areas where federal agencies—including the Department of Transportation and Department of Energy—can take action to turn those ambitions into reality:
Incentivizing EV adoption
A significant barrier in growing the use of EVs in the U.S. is the cost of entry into the market. Total cost of ownership is lower for EVs across the lifetime of the vehicle, but the high initial purchase price—as much as 10% to 40% more than similar gasoline-only models—makes them out of reach for some interested buyers. Agencies can therefore play a big role in finding solutions that reduce the cost of EV ownership.
One solution is expanding the funding for consumer incentive programs. That includes the tax credit for purchasing a qualifying EV, which includes passenger vehicles and light-duty trucks. The current version of the Congressional budget reconciliation package seeks to increase this tax credit from a maximum of $7,500 to $12,500 under certain conditions, such as being assembled in the U.S. by union labor.
Another way to reduce upfront costs is by growing the used EV market. The three fastest-selling used cars in the U.S. in July 2021 were all EVs, so demand is high. The used EV market could be made more accessible if existing and upcoming incentive programs—including tax credits and point of sale rebates—were expanded to include used EVs.
Education and outreach programs can target used car lots through partnerships with states, communities, and grassroots organizations. This can help inform potential car buyers about the various benefits of EV ownership. In fact, government agencies are in a prime position to dispel common misconceptions that exist about used EVs (such as battery life concerns) and communicate to consumers that they’re a viable option.
Building out charging infrastructure
Once EVs are purchased and on the road, the next big challenge is making sure that the infrastructure exists to keep EVs charged. Charging stations need to be accessible for all drivers, including those who live in apartments and other types of multi-family buildings and can’t rely on plugging in through their personal garage.
As charging stations can be expensive to install and operate, stakeholders need to make sure they are being located where they will get the most use—from passenger vehicles as well as fleets. We've used our WayPoint technology platform to map charging demand in major metropolitan areas across the U.S., helping decision-makers plan strategic EV charging station placement.
It’s also important to understand the distinct challenges that certain cities, states, and regions face. For example, EVs can experience reduced electric range in cold weather—and extreme heat—so charging stations may need to be more plentiful. Some congested cities may lack the physical space to install enough charging stations; other regions, particularly in the less inhabited western U.S., may have too much space between towns to satisfy the “range anxiety” of EV users.
Funding for this crucial charging infrastructure will be an “all hands on deck” challenge for governments, utilities, and automakers. If signed into law, the Infrastructure Investment and Jobs Act has $7.5B in new spending for EV charging infrastructure. Public-private collaborations—such as with utilities and local businesses—should also be considered to provide adequate charging stations, particularly as the “Buy America” provision in the bill could pose significant challenges while the current U.S. supply chain is weak.
Increasing equity in EV benefits
Ultimately, the biggest role federal agencies may play is in increasing equitable benefits from EVs. Even as sales of EVs have surged, the average owner continues to have an annual household income of over $100,000. Bringing down the initial cost of investment for new and used EVs and putting more charging stations in shared spaces (apartments, condos), public spaces (parking lots, street sides), and popular destinations (shopping centers, local attractions) can go a long way to increasing ownership among low-to-moderate income consumers.
But the benefits of EVs shouldn’t only be felt by those who are able to own one. Low-income communities often have lower rates of personal vehicle ownership so the electrification of public transportation, school buses, taxis and rideshare vehicles, and delivery vehicles can help bring the benefits of EVs in other ways. Agencies can help target these other types of vehicles for electrification to help reduce disparities between wealthy communities and underserved communities when it comes to EVs.
Agencies can also highlight the health benefits of EVs for customers who may be unaware of the air quality and climate impacts of gas-powered vehicles. ICF collaborated with the American Lung Association on a report that shows that a nationwide transition to EVs could have significant positive outcomes for public health. A shift away from the tailpipe pollution from internal combustion engines to zero-emission EVs by 2050 could help the U.S. avoid 6,300 premature deaths, 93,000 asthma attacks, and more than a billion tons of GHG emissions each year.
Think globally, act locally
Many other countries are further ahead of the U.S. in electrifying transportation. China is now selling over 1 million EVs per year and Norway continues to lead all countries with the highest number of EVs sold relative to their population. When world leaders come together in Glasgow, Scotland, for the UN climate talks (COP26) in November, they’ll have a fleet of EVs to shuttle them to and from the site as a reminder of the technology solutions already available. Driving the global transition to zero emissions in the transportation sector will also be a key theme on one day of the summit.
While a lot of the international climate talks will focus on international standard-setting, the real work of transportation decarbonization in the U.S. will happen through federal regulatory frameworks that build on best practices for EV deployment. Taken all together, these federal actions can help the U.S. turn the corner from seeing EVs as outside of the mainstream to embracing them as an important tool for fighting climate change and building a more sustainable transportation system.
