Two key pieces of Federal support for electric vehicle (EV) charging are coming into place to accelerate EV infrastructure installation for all kinds of vehicles. The first is the announcement of Charging and Fueling Infrastructure Grant Program awards—$623 million representing the first two years of the program’s budget—which provides funding for EV charging and other alternative fueling stations along highway corridors and in communities. The second is guidance from Treasury Department and the Internal Revenue Service on the Alternative Fueling Infrastructure Tax Credit, which makes installing EV charging cheaper for both individual drivers and businesses.
I’ve been looking forward to the first round of Charging and Fueling Infrastructure Grant Program awards and the tax credit guidance for some time. This support for EV charging, and by extension EV ownership among individuals and businesses, is key for accelerating the electrification of the transportation sector that we need to make progress on reducing greenhouse gas emissions and local air pollution from transportation. These are two more big steps toward a zero-tailpipe emissions future.
Charging and Fueling Grant Projects inject needed support for a variety of EV projects
Let’s take a step back and talk about what each of these incentives are, starting with the Charging and Fueling Infrastructure Discretionary Grant Program, or CFI Program for short. That program is one of the two programs in the Bipartisan Infrastructure Law (BIL) that targets EV charging infrastructure, along with the National EV Infrastructure (NEVI) Program. Both programs are set to run for five years. At $2.5 billion, the CFI Program is the smaller of the two, but still represents a full third of the historic ongoing investment that can fund EV charging from the BIL. Unlike the NEVI Program, in which states administer the program after each receives funding according to a pre-determined formula, the CFI program is awarded on a competitive basis by the Federal Highway Administration. There are also two key eligibility differences between the NEVI and CFI Programs, namely that infrastructure for several designated “alternative fuels” (not just EV charging) are eligible and that community sites (not just highway corridors) are eligible locations for the CFI Program grants.
The CFI Program awards will fund charging at locations across the country, including in rural and disadvantaged communities, helping more people make the switch to EVs. I found a number of details about the awardee projects notable. Here’s my list:
- EVs win the day: The awardee projects lean overwhelmingly to EV charging infrastructure and do not include infrastructure for alternative fuels such as propane or natural gas. That is a good thing to help us on our way to phasing out fossil fuels—we shouldn’t be sinking money into infrastructure for those technologies.
- From micro to mega: The projects provide support across vehicle segments from electric cars to electric big rig trucks, the kinds of trucks that use megawatt-level charging. There is even a project that co-locates electric car charging with dock-based charging for shared electric bikes and scooters, so-called micromobility. Other projects note consideration of transit-oriented development as part of infrastructure deployment.
- Community and corridor balance: Roughly half of the funding went to community sites, while half went to corridor locations. Half of CFI Program funds are allocated to community sites, including public libraries and community centers. It is good to see community deployment keeping pace, as those sites must advance concurrently with advancements in the corridor locations that provide connectivity between communities.
- Grid-smart strategies: A number of project descriptions mention solar canopies, on-site battery storage, or both. These on-site energy resources help reduce the need to electric grid upgrades and help charging operators manage their electricity costs—a win-win. So it’s great to see these strategies being funded as part of holistic projects.
- Filling gaps where need is greatest: A number of project descriptions—both community and corridor types—note that providing access and economic or workforce development in historically disadvantaged, rural, and/or tribal communities as the focus of infrastructure deployment. It is critically important to ensure investments are made in those areas to ensure everyone has the opportunity to go electric, and focusing investments in this way enhances the efficiency of investments by investing where need is greatest.
EV Tax Credit guidance gives certainty about credit eligibility
We knew a few things about the updated alternative fuel infrastructure tax credit from the Inflation Reduction Act (IRA): it provided long term certainty, increased the cap on the incentive for businesses, included explicitly eligibility for bidirectional chargers and chargers for two- and three-wheeled EVs, limited eligibility to low-income and non-urban areas, and increased incentives for projects that support a highly trained workforce. However, it wasn’t clear at the time how all of the updates would play out in practice, most notably when it comes to the geographic eligibility criteria. The IRA established low-income and non-urban census tracts as locations for credit-eligible infrastructure. Due to the technicalities of how Census Bureau designates rural and urban areas compared to how eligibility was written into the BIL, there remained confusion about what would qualify as “non-urban”—until now.
The Treasury and IRS guidance defines non-urban census tracts as those in which at least 10 percent of the census blocks are not designated as urban. In other words, a tract is eligible if it is at least 10 percent rural. UCS was part of a broad coalition pushing for this definition as an appropriately inclusive solution because it reduces the number of households and businesses in rural census blocks that might otherwise be excluded from eligibility simply because they happen to be in a census track that also contains many urban blocks. The White House estimates this definition translates to two-thirds of people in the US living in credit-eligible areas.
Alternative fuel infrastructure tax credit geographic eligibility is consequential because it is the main long term (10-year) federal support for EV charging deployment. The other credit eligibility criteria is quite broad: applies to infrastructure that can serve any segment of vehicle—from a Chevy BoltEV to a big rig—and for any charging installer—from a driver living in a tiny home to an apartment tower and from public station operators to large fleet operators. So urbanicity is the key criteria guiding who can claim the credit.
Focus on non-urban and low-income census tracts makes sense for the same reasons it was important to see so many of the CFI Program grants going to such areas—these are areas that have the greatest need for charging infrastructure support.
More pieces of the federal charging vision happening or coming soon
The CFI Program grants and tax credit guidance are certainly not the only news on EV charging coming out of the Federal programs right now. Additional pieces of Federal support for EV charging are happening or on the horizon. For example, NEVI program stations are beginning to come online, and the recipients for grants to repair and replace broken chargers also just came out. Those grants will improve the reliability of stations that are already out there, giving EV drivers and potential EV drivers more confidence in venturing out in an EV.
There are also a number of things that will move forward soon, such as the opening of a second round of CFI Program grant applications, a third round of state NEVI Program plan updates, an expected request for information on how to update to minimum standards and requirements for public charging funded through the Department of Transportation, and more. It’s a lot to keep track of, and we have a great team at UCS keeping track to put us on our best footing for the next big steps toward a zero-tailpipe emissions future.