Biden Proposal to Add EV Charging Stations Faces Bumpy Road

By Timothy Puko 

WASHINGTON -- President Biden's ambitious plan to fund a network of electric vehicle charging stations could be a shot-in-the-arm for the EV industry, but it leaves a myriad of legal, technical and budgetary problems still to be addressed.

The White House is calling for 500,000 new EV charging stations -- five times the size of the national network now -- as part of a $174 billion plan to boost the EV industry in Mr. Biden's broad $2.3 trillion infrastructure proposal. The stations are seen as key to addressing the range anxiety that many consumers cite when ruling out an EV purchase, out of fear they may be stranded too far away from a charging opportunity.

Whether Congress approves the money is the immediate question, especially given stiff Republican opposition. But beyond that, an even bigger issue could be what rules it might set for that spending and for accelerating the network build-out.

The industry may need federal intervention on permitting and cost-sharing rules for EV charging stations to clear regulatory bottlenecks at state and local levels, said Chris Nelder, who studies EV-grid integration at the Rocky Mountain Institute, an energy and environment policy organization that promotes clean energy.

The build-out of stations so far has often been hamstrung by utilities, new competitors, consumer advocates and oil companies all fighting in front of state regulators -- or dithering over investment costs.

Building charging infrastructure is "really slow and really expensive. We need a whole lot more support," Mr. Nelder said. "It's going to take money, it's going to take authority, it's going to take leadership and the federal government to step in."

While EV investment in the U.S. private sector is on the rise, analysts say, it pales in comparison to the industry's growth in China and European countries, where governments have spurred development with big subsidies and friendly regulations. Advocates and financial analysts said the U.S. needs a similar plan to catch up.

"Biden's plan could help supercharge" the market, said Anastasia Amoroso, a strategist at the private-banking arm of JPMorgan Chase & Co. "The plan puts the right and similar incentives in place that have helped drive EV adoption in Europe and China."

Utilities and the auto sector, both reliant on the EV market as a source of new demand, stand to gain from the Biden plan, said analysts at Evercore ISI, an advisory firm.

Tesla Inc. and General Motors Co. stand out as two potential winners, they added. Both would benefit from a proposal to raise a cap on tax breaks available to EV buyers, which the pair had already maxed out.

Other big winners likely include the businesses that install and operate charging stations, such as ChargePoint and EVgo Services LLC.

"We have electricity everywhere. Let's just make sure everyone feels comfortable they can charge everywhere," said Cathy Zoi, chief executive of EVgo Services, which operates more than 800 charging stations in 34 states.

EVgo last year announced a partnership with General Motors, a $90 million investment to triple its charging network over five years. Their venture aims to produce 2,750 new chargers by 2025.

"If we can get rid of range anxiety, then you have a virtuous cycle in which EVs become ubiquitous around the U.S.," Evercore ISI's James West said. The Biden plan is "a step in the right direction," he said.

Mr. Biden included the new EV stations as one of several initiatives in the infrastructure proposal designed to address climate change by supporting cleaner energy.

Transportation -- heavily dependent on oil for burning gasoline -- is now the country's leading source of greenhouse-gas emissions. So the administration prioritized a push toward electric cars, which are more likely to get energy from nuclear, wind or other sources of lower-emissions power.

Last year battery-powered vehicles made up fewer than 2% of U.S. auto sales, and consumers haven't been shopping for electric cars while gasoline prices were relatively low.

Consumers used to quick fill-ups are also scared off by a shortage of fast charging stations or broken, occupied or confusing-to-pay systems.

Administration officials have further said they want to compete with China, which has become a world leader in the EV business through government investment. It helped fund manufacturers, consumers and a charging network.

In December alone, China added 112,000 new charge connectors to the network to power EV cars, more than the entire existing U.S. network, according to an energy-data arm of Bloomberg.

Energy Secretary Jennifer Granholm mentioned China's success Sunday in defending the size of the administration's proposed investment. She pointed to China's long-term intentions to control EV batteries and their supply chains.

"We can decide, no, we want to build that stuff here," Ms. Granholm said on CNN's "State of the Union." "And that's part of the investment in the electric vehicle infrastructure."

That is a hard sell with Republicans, both those in Congress with a vote on the funding and the state and local officeholders who may have a say later in how it is spent down the line.

Several on Sunday pointed directly to the size of the EV proposal as a problem. They said it is larger than funding for traditional infrastructure areas such as roads and bridges, which they said they want prioritized.

"That is a political statement, it's not a statement on trying to improve our infrastructure in America," Mississippi Republican Gov. Tate Reeves said on CNN about the emphasis on EVs.

"It looks more like the Green New Deal than it looks like an infrastructure plan."

Write to Timothy Puko at [e-mail]

(END) Dow Jones Newswires

April 05, 2021 10:45 ET (14:45 GMT)

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