The key things to know about Biden’s EV infrastructure plan.
Within President Joe Biden’s $2.25 trillion infrastructure plan — the American Jobs Plan — unveiled last week, the White House is proposing a massive $174 billion investment “to win the EV market.” It’s a historic move that will have deep implications for the emerging U.S. EV industry. If it passes Congress mostly intact, we could see Americans’ use of plug-in vehicles jump considerably.
A lot of ideas are in the plan, and many impacts will result from it. Here are 10 important bits to know about the planned federal investments for electric vehicles and EV infrastructure (and a reminder that we’re hosting an event about many of these pressing topics, VERGE Electrify online May 25 and 26):
1. It’s a boost for EV chargers: Biden has been calling for a goal of 500,000 chargers built out across the U.S. by 2030 since before the election. His infrastructure plan says the federal government will help achieve that goal by creating grant and incentive programs for local and state governments as well as the private sector to deploy EV chargers. Companies that own EV charging assets, such as ChargePoint and Tesla, saw a big boost to their stock prices following the release of the plan last week.
2. There’s a big push to electrify transit and school buses: The plan calls for replacing 50,000 diesel-powered transit vehicles as well as electrifying 20 percent of the U.S. school bus fleet through a new Clean Buses for Kids Program. Electric transit and school buses are two types of vehicles that already have been quickly electrifying because transit agencies and school districts can save money on fuel and maintenance costs while reducing air pollution for riders. What these organizations need is incentives to reduce the upfront purchase price of the electric vehicles, which are still more expensive than their diesel-powered counterparts.
3. Ditto the federal fleet: The plan also calls for electrifying vehicles in the federal fleet, including the United States Post Office. Details are sparse at this point, but it’s good to know that the elusive and complicated USPS will be a target.
4. It would buoy domestic EV production: Asian countries own the world’s EV battery production markets. But Biden is hoping to boost domestic manufacturing of batteries and EVs through incentives for automakers. Former President Barack Obama’s green recovery stimulus invested in battery and EV manufacturing with some mixed results. Biden’s plan should make sure to invest in scaling up already proven companies and technologies, instead of betting on emerging ones.
5. It includes incentives for Americans to buy EVs: The plan says it will give EV buyers “point of sale” rebates and tax incentives to buy American-made EVs. Despite the dropping costs of batteries and EVs, consumers still need incentives to buy more expensive electric cars. Biden reportedly plans to extend the current $7,500 federal tax credit, an amount that diminishes for vehicles built by automakers including Tesla and General Motors that already have sold over 200,000 electric vehicles. Biden could drop that 200,000 ceiling as well as enhance incentives for EV buyers in disadvantaged communities.
6. It prioritizes building out transmission lines and clean energy: If many of America’s vehicles go electric, we’ll need more electricity, and the nation’s electric grid will have to get more resilient and cleaner. Biden’s plan calls for the Investment Tax Credit (ITC) to cover transmission lines (which will provide much-needed financing), as well as energy storage projects. It also would extend the ITC and the Production Tax Credit for another decade. The plan also mentioned a Clean Electricity Standard, which would set goals for the percentage of clean energy required each year. Many states including California have set state-level renewable portfolio standards that have been successful in boosting clean energy.
7. It prioritizes racial justice: Biden’s plan uniquely says it will use its overall infrastructure investments to prioritize “addressing long-standing and persistent racial injustice.” Forty percent of the total planned investments (not specific for EVs) will create climate and clean energy benefits for disadvantaged communities.
8. Decarbonizing transit is a big focus: Beyond EVs, the Biden infrastructure plan calls for investing $85 billion into “modernizing existing transit,” and help transit agencies expand systems to boost ridership. There’s also $80 billion for intercity rail systems such as Amtrak. This is essentially a doubling of federal investment in public transit, and transit advocates are saying this a “dramatic shift” in transportation spending.
9. Corporate taxes will feed funding: Biden seeks to raise corporate taxes, raising $2 trillion over the next 15 years. Corporations would see a boosted tax rate of 28 percent, and some offshore tax loopholes would be closed.
10. The proposal still needs to get through Congress: Biden’s plan likely will see significant reshaping as it spends months making its way through Congress. What’s been floated now is an aspirational initial draft.
Still, the plan is historic and could help kick-start a real EV revolution.