Biden’s infrastructure plan includes $ 174 billion for the electric vehicle market

The US plans to build a national network of 500,000 electric vehicle chargers by 2030. According to experts, about 30% of Americans do not have access to charging at home or in the workplace, which they may need in the future. Implementing the plan will be difficult, time consuming and costly.

The massive US Job Creation Plan, published by the White House on March 31, calls for $ 174 billion out of a $ 2 trillion total investment. to create jobs through the development of the electric vehicle market in the country.

What does the US electrification plan provide?

  • Incentives for automakers to create internal supply chains from raw materials to parts, refurbish factories.

  • Discounts and tax breaks for consumers to buy US-made electric vehicles.

  • Grant and incentive programs for state and local governments and the private sector to build a national network of 500,000 EV chargers by 2030.

  • Replacement of 50,000 diesel vehicles and electrification of at least 20% of the school bus fleet.

  • Purchase of electric cars for the US Postal Service.

The US market for electric vehicles is very small

The electric vehicle market share in the United States is only one third of the Chinese electric vehicle market. Plug-in vehicles, which include electric vehicles and hybrid electric vehicles with conventional engines, accounted for only about 2% of the more than 17 million new cars sold domestically in 2019, according to the U.S. Department of Energy.

According to market research firm IHS Markit, in 2020, electric vehicles accounted for only 1.8% of newly registered passenger cars in the United States.

However, international consulting firm AlixPartners predicts that there will be 18 million electric vehicles on US roads by the end of 2030.

Given the pledges of the largest American automakers General Motors (GM) and Ford (F) to invest tens of billions of dollars in the coming years and Tesla’s long-term production plans (TSLA) of 20 million cars a year, the number of American electric vehicles should indeed grow significantly on US roads. in the next 10 years.

At the same time, according to the US Department of Energy, there are about 41,400 charging stations for electric vehicles in the country, of which less than 5,000 with fast chargers. According to GasBuddy, this compares to over 136,400 fuel stations.

There are private companies providing electric vehicle charging services such as ChargePoint (CHPT) and EVgo. ChargePoint, a global leader in the industry, with 132,000 charging stations in the US and Europe, recently went public as a result of a reverse merger with a Specialized Share Acquisition Company (SPAC). EVgo owns and operates more than 800 charging points and also plans to enter the market through SPAC in the second quarter.

Challenges for the U.S. electric vehicle market in the coming years

Market experts and analysts point out that the key challenges in building large fast charging networks across the United States will be:

Tesla has been building its fast-charging network between major cities to attract customers for almost a decade. As of March 2020, Tesla operates 1,826 charging stations worldwide, of which 908 are in the United States. As a reminder, the US government has set a goal of 500,000 electric car chargers by 2030.

General Motors plans to invest $ 27 billion by 2025 to produce 20 new models of electric vehicles by 2023 and refit its factories.

Ford intends to spend $ 22 billion on electric vehicles, but this does not include the cost of producing batteries, which are now in short supply in the global market.

According to the consulting company AlixPartners, installation of fast chargers (third level) on average costs from $ 120 thousand to $ 260 thousand.

Mark Wakefield, managing director of AlixPartners, said the EV market “absolutely needs some level of government funding right now. The reality is that automakers don’t have the money for charging stations. “

In his opinion, part of the necessary funds for charging stations can be obtained from utilities.

Analysts today are arguing about what should come first: the infrastructure for the electric vehicle market in the United States, or the supply of charging stations should follow demand, given the still small electric vehicle market in the country.

Some believe that these components of the market can grow at the same time.

Experts at investment bank Cowen estimate that the market for filling power plants will be about $ 27 billion by 2040.

While establishing a national charging network in the US will be a challenge for government executives, Cowen believes the sector is “poised for tremendous growth, fueled by a large, strong economy and regular income model.”

Local government-business partnerships

More than just government support will be needed to successfully expand the EV infrastructure, analysts say. This will require a mix of public-private partnerships that could include local municipalities, businesses and utilities, as well as automakers and a new group of EV charging companies.

Libertex [CPS] WW



MTP Procurement Management Procurement Bidding SRM Cost Optimization Team Management Cost Management SAP ERP Management Skills SAP ERP 1C Supply Control SAP / SRM SAP / R3 Analytical Thinking Working with Suppliers Result Oriented System Thinking Process Management Strategic Planning Project Management MsOffice Negotiations with company top officials Organization of procurement procedures Oil trading

Read Previous

Tesla shipments in Q1 2021 beat analyst estimates

Read Next

Crypto Exchange Coinbase Goes Direct To Market On April 14