ALEXANDRIA, Va.—The Biden Administration soon will provide states billions of dollars to create an electric vehicle (EV) charging network, but the completion of a reliable charging infrastructure is likely to be a slow process, based on a similar recent effort, reports the Wall Street Journal.
In 2017, Volkswagen was ordered to pay $424 million to states as part of a $2.8 billion settlement to resolve allegations that it cheated on diesel emissions tests. That money was intended to be used for EV chargers in some states, but more than four years later, states have spent about 48% of those charging dollars.
Six states said that they will use the money on an EV charging network, but no state has dispersed the funds yet. Four states plan to use the funds on other projects such as lower-emissions bus fleets, and 30 states have distributed most of their available charging money, including Hawaii, New Mexico, South Dakota and New York.
Texas decided to pass out $21 million of the awarded money for chargers on a first-come, first-served basis last November, and it took all of a minute for the funds to be claimed. Buc-ee’s and Shell won 85% of the funds out of 251 applications.
“We were shocked. And we were, in hindsight, a little slow,” Kevin Smartt, the chief executive of Austin-based TXB convenience stores, told the Journal. TXB had hoped to add fast chargers to 12 to 15 existing sites but didn’t email quickly enough to receive any of the money.
“What determined who won these grants wasn’t a plan or thoughtful distribution,” Tom Smith, executive director of the Texas Electric Transportation Resources Alliance, told the Journal. “It was bot speed.”
Texas officials defended the state’s process, saying the money was available to such projects statewide. “This process resulted in grants being awarded efficiently,” said a spokesman for the Texas Commission on Environmental Quality.
Shell told the Journal it plans to invest in charging at many of its 13,000 branded retail locations in the U.S.
The EV charging infrastructure will need to catch up soon, as U.S. sales of EV and plug-in hybrids doubled to more than 600,000 last year, and sales figures show that EVs have reached 6.6% of total cars sold in recent weeks as gasoline prices rise to their highest levels in years. Recent pushes by GM and Ford to speed up EV production also could create an increased demand for chargers.
The Biden Administration is calling for 500,000 chargers by 2030, but up to 1.2 million are actually needed, according to McKinsey & Co. Right now, the U.S. has around 93,000 public chargers.
“The challenge for states is that public funding for EV charging inherently helps shape early winners and losers in a new market,” wrote the Journal. According to a recent Fuels Institute study, public funding may be responsible for up to 26% of the difference in charging infrastructure between markets with and without such funding.
Fuel retailers that want to enter the EV-charging market but wonder if they can fairly compete with the utilities they rely on for electricity. “For retailers it’s not a profitable opportunity right now,” Scot Imus, executive director of the Indiana Food & Fuel Association, told the Journal.
According to a survey by Autolist, the top reason why a consumer would not purchase an EV was that they are too expensive. 48 percent said EVs were too expensive but followed closely after was range anxiety: 44% said they were worried about range, and 36% said they were worried about where to charge it.
Additionally, 66% of shoppers said local, state and federal agencies should offer more incentives.
“Even though we’re seeing record high prices for new and used gas cars right now, many consumers still don’t see EVs as a completely viable alternative yet,” said Corey Lydstone, founder and CEO of Autolist.
The NACS EV Charging Calculator was created to allow retailers to assess the cost and profitability of offering EV chargers at their sites. The calculator focuses on what retailer utility costs associated with EV recharging are and what the corresponding revenue must be to recover those costs after allowing for potential ancillary in-store visits and purchase profitability.
Read more about electricity demand charges and what they mean for retailers’ ability to turn a profit from EV charging in the September issue of NACS Magazine.
A recent Convenience Matters podcast episode discusses how EVs are the future, and another episode explains how convenience retailers can attract and retain EV customers.
Visit the NACS Electric Vehicles topics page for more information about EVs.