What’s Range Anxiety? U.S. Investment in a Nationwide EV Charging System

THE COWEN INSIGHT

The Bipartisan Infrastructure Law (BIL) authorizes a historic investment in electric vehicle charging. Total spending could exceed $9bn. Despite a step-up in sector spending, we believe the BIL’s impact is underappreciated. We see the BIL as central in introducing a standardized national system, and in directing investments toward Direct Current Fast Charging (DCFC) technology. Charging investments are best contextualized as one element of wider Biden Administration effort to decarbonize the transportation sector with a focus on light duty vehicles.

The Bipartisan Infrastructure Law and Its Potential Impact

The 2021 Infrastructure Investment and Jobs Act (IIJA) – referred to as the Bipartisan Infrastructure Law (BIL) – authorizes $5bn for electric vehicle (EV) charging and $2.5bn for alternative fueling technologies (including EV charging which we see as best positioned to win grants). Minimum project matching could push EV charging investments to more than $9bn over five years.

We believe the impact of this spending remains underappreciated as expectations for EV charging investments became decoupled from political reality in 2021. We see multiple positives. BIL spending, the first dedicated federal EV charging investment, is set to bring needed industry standardization, reduce EV range anxiety, and represents a clear step-up in sector investment. With ~$5.75bn reserved for highway corridors, we view Direct Current Fast Charging (DCFC) technology as best positioned to capture BIL.

BIL investments are best contextualized as one element of the Biden Administration’s mutually supportive policy efforts to decarbonize the transportation sector – the largest greenhouse gas (GHG) emitting sector of the US economy. We see efforts focused on light duty vehicles (LDVs), and believe that electrification has emerged as the zero emissions vehicle (ZEV) technology of choice within the wider Democratic Party.

Report Overview

This report unpacks multiple legislative, regulatory, and executive actions which will determine the process, selection, and timing associated with federal investments in EV charging infrastructure. We aggregate 50 discrete state-level block grant projections and incorporate minimum project sponsor matching to better estimate the location and total value of program spending.

Key Catalysts

Watch Texas, California and Florida as these states are funding winners. There are multiple near-term policy catalysts including:

• May 13, 2022 – publication of EV charging station technical guidance and update inventory of highways targeted for EV charging investments
• August 1, 2022 – states deadline to submit spending plans
• October 1, 2022 – BIL funds begin flowing to states