Capitalizing on Funding by Meeting Regulations
As the United States moves toward the adoption of an electric vehicle (EV) ecosystem, EV charging companies should be aware of several changes to U.S. domestic preference laws. Additionally, companies wishing to capitalize on government grants directly associated with the development of EV charging stations must learn how to meet—and maintain—emerging regulation requirements.
FEDERAL FUNDING PROGRAMS
Federal funding programs for EV infrastructure can be drawn from several sources, including discretionary grant-funding programs, formula grant-funding programs, loan financial programs, and tax incentives. However, two of the most relevant programs to date include the Bipartisan Infrastructure Law and the Inflation Reduction Act.
BIPARTISAN INFRASTRUCTURE LAW
Also referred to as the Infrastructure Investment and Jobs Act (IIJA) this new law provides $7.5 billion in funding for EV charging stations to be split between two key programs, namely, the National Electric Vehicle Infrastructure Formula Program (NEVI) and the Discretionary Grant Program for Charging and Fueling Infrastructure. (Government Finance Officers Association)
The $5 billion NEVI program will help facilitate each qualifying state’s ability to deploy EV charging stations and establish an interconnected, national EV charging network. The Discretionary Grant Program for Charging and Fueling will split the remaining $2.5 billion in funding between two grant programs. Each program is charged with the responsibility to support rural charging stations, build resilient infrastructure, and increase EV charger access in underserved and overburdened communities. (U.S. Dept. of Transportation)
INFLATION REDUCTION ACT
The Inflation Reduction Act, signed in August 2022, builds on the IIJA’s historic investments in America’s EV charging future. As such, in September 2022, approval was received to allocate $900 million in funding earmarked for the building of 100 million charging stations in 34 states and Puerto Rico. (Smithsonian Magazine) The initial goal is to build stations that span some 53,000 miles of national highway. With all this funding available, however, EV charging companies will likely be subject to emerging regulations and Buy America/American requirements.
BUY AMERICA REQUIREMENTS
While financial support will help to shape the future of a nationwide EV charging network, companies will need to meet a set of minimum requirements. As EVs become more prominent on the roads, federal government regulations will continue to evolve for both EV vehicles and their charging stations. One closely watched regulatory issue is whether Buy America requirements will apply to EV chargers.
Notice of Proposed Rulemaking
In late 2021, the U.S. Departments of Transportation and Energy issued a Request for Information around applying Buy America regulations to EV chargers. (Federal Register via National Archives) They solicited comments about the feasibility of developing a U.S.-based supply chain and manufacturing base for EV chargers. In response to the feedback they received, the Federal Highway Administration (FHWA) posted a notice of proposed rulemaking (NPRM) along with a request for comments regarding the establishment of regulations under NEVI.
When the open season for comments expired near the end of August, the notice generated just under 400 responses. Although concerns varied among the public and private sectors, two common themes that surfaced focused on:
- Creating more flexible and less burdensome standards to allow for a greater number of states and businesses to participate in EV charger implementation
- Embracing advanced technology such as software-defined vehicle (SDF) and rapid battery charging
Notice of Proposed Waiver
A second notice was also posted regarding a proposed waiver of “requirements under the FHWA regulations and the Build America, Buy America Act for steel, iron, manufactured products, and construction materials in EV chargers.” (Federal Register via National Archives) The proposal was to initially waive all Buy America requirements for EV chargers (and all EV charger components) and then start phasing out the waivers in 2023, with final phase-out by January 2024.
Although the proposed waiver generated nearly unanimous support, many felt that the transitional period was too short. Respondents argue that, in addition to allowing for more time to conduct due diligence (thereby decreasing safety and reliability risks), extending the waiver would help:
- Strengthen the likelihood that supply will meet demand by providing reasonable time for manufacturers to develop a reliable domestic supply chain
- Establish necessary infrastructure that is convenient, accessible, and affordable
The FHWA has proposed the establishment of regulations that would set minimum standards and requirements for projects funded under NEVI. Some proposed regulations center on how and where states should establish stations and include clear standards regarding the interoperability of the chargers. These regulations help to ensure the chargers benefit consumers while also meeting the federal government’s key policy goals. As Secretary Buttigieg aptly states, "Government didn't invent the plane or the train or the automobile… But government did build airports, lay tracks, and construct highways." (INC. Magazine)
In other words, although carmakers and the industry are ready to lead the way, good public policy must first pave the way. After all, the goal of government funding is to promote continued investment toward the establishment of a nationwide charging network, but government funding is generally never void of regulations.
Recent national polling found strong bipartisan support for building green technology in the United States. (Environmental Defense Fund) As the government finalizes the waiver timeline and rolls out federal funding, now is the time for EV charging companies to seize the opportunity and plan for U.S. production. Starting to reorganize your supply chain now and establish strategic partnerships will get you one step closer to competing successfully in the EV charging playground.
When It Matters, Position Yourself for Success with Benchmark
As the regulatory process continues, only one thing is for certain—agility and flexibility matter. EV charging companies need to start now to develop U.S. manufacturing and supply chains but doing this in-house requires significant capital expenditure when regulatory details are still uncertain.
With nine U.S. manufacturing sites, Benchmark has the ability to manufacture EV chargers in the United States. This means reduced supply chain and logistical risk when Benchmark is producing your products. While we aren’t immune to supply chain constraints, our in-house engineering and manufacturing capabilities mean that we can pivot—or help you pivot—to get your product to market safely and quickly. Our full supply chain development competencies coupled with our in-house automated testing also help validate safety measures.
Partnering with a full-production design and manufacturing company with specialized engineering and manufacturing capabilities—a partner that can also support the development of your supply chain—will help propel you into the future of mass EV adoption. Want to learn more about how Benchmark can support your EV charging capabilities?
Schedule time today to speak with our engineering team at Benchmark. We’re charged up and ready to go!