The Bill is on the move

You could be forgiven for not tracking the bills that are coming out of Congress – there is a lot going on. We will touch on the big Reconciliation bill being debated in the Senate in a moment, but first, about last night.

The text of the INVEST in America Act (H.R. 3684) – $550 billion of new funding currently – was released late last night. We have scoured through the 2,702 pages (spare a thought for those poor Hill staffers) to distill sections related to transportation electrification.

Here’s what we have tracked on transportation electrification funding:

• $7.5 billion for EV charging (including “alternative fuels”)
• $2.5 billion for electric school buses
• $2.5 billion for low emissions / electric school buses
• $250 million for electric or low emissions ferries
• $6.1 billion for battery manufacturing and recycling

In total, $13.6 billion of the funding specifically targets electrification initiatives, and in total, at least $22.085 billion of the funding includes electrification provisions.

Here’s our summary of the transportation electrification funding allocation (in order of appearance in the bill):

• Grants for charging and fueling infrastructure: Grant program for publicly accessible electric vehicle charging infrastructure, hydrogen fueling infrastructure, propane fueling infrastructure (for MD and HD vehicles only), and natural gas fueling infrastructure. Priority to rural areas, low- and moderate-income neighborhoods, and communities with low rate of private parking. Grants of up to $15 million. ($2.5 billion)
• Reduction of Truck Emissions at Port Facilities: Program to reduce truck idling at port facilities, including to study port electrification, study emerging technologies, and fund projects that reduce port-related emissions. ($250 million)
• Carbon Reduction Program: Carbon reduction program to reduce transportation emissions. Eligible projects include efforts to reduce the environmental and community impacts of freight movement, as well as projects to support deployment of alternative fuel vehicles and reduce transportation emissions at port facilities. (Funding not stated but included in $273 billion allocated to Federal-Aid Highway Program under section 119 of Title 23)
• Electric Vehicle Working Group: Working group to be established with government, utilities, and manufacturers to report on the barriers to greater EV adoption. Group to prepare three reports, with the first report due in 18 months. (Funding not stated)
• Fleet Transition Plan: Requires grant applicants to submit zero-emission transition plan that addresses workforce transition, costs, and other relevant indicators. Allocates at least 25 percent of the funds made available to carry out this sub-24 section, only consider eligible projects related to the acquisition of low or no emission buses or bus facilities other than zero emission vehicles and related facilities. (Funding not stated)
• State Energy Program: State Energy Program mandate (in the Energy Policy and Conservation Act) amended to include: “programs to increase transportation energy efficiency, including programs to help reduce carbon emissions in the transportation sector by 2050 and accelerate the use of alternative transportation fuels for, and the electrification of, State government vehicles, fleet vehicles, taxis and ridesharing services, mass transit, school buses, ferries, and privately-owned passenger and medium- and heavy-duty vehicles’’. Unclear how much of the Program budget will be allocated to transportation electrification. ($500 million)
• Demonstration of electric vehicle battery second-life applications for grid services: “Project to demonstrate second-life applications of electric vehicle batteries as aggregated energy storage installations to provide services to the electric grid.” (Funding not stated)
• Battery processing and manufacturing: Programs to support a domestic supply chain for battery production. Programs include a battery recycling grant program, battery recycling research, collection system for batteries, and a lithium-Ion Battery Recycling Prize. ($6.135 billion)
• Electric drive vehicle battery recycling and second-life applications program: Amendment to the Energy Independence and Security Act to include EV batteries. Funding to maintain a North American battery supply chain, program of research, development, and demonstration of second life applications and technologies and processes for final recycling and disposal of batteries. Funding also for a grant program, study, and report on recycling and second-life applications. ($200 million)
• Data Collection on Electric Vehicle Integration with the Electricity Grids: Project to expand data collection with respect to EV integration into electricity grids. (Funding not stated)
• Consideration of Measures to Promote Greater Electrification of the Transportation Sector: States to promote greater transportation electrification by amending rates to promote affordable and equitable EV charging, improve customer experience with EV charging, accelerate third party investment in EV charging infrastructure and recover marginal costs of electricity delivery to EVs and infrastructure. (Funding not stated)
• Study on impact of electric vehicles: Study to look at the “cradle to the grave” environmental impact of electric vehicles. (Funding not stated)
• Study on impact of forced labor in China on the electric vehicle supply chain: Study to look at the impact of forced labor in China on the electric vehicle supply chain. (Funding not stated)
• Clean School Bus Program (part 1): Funding for zero emissions school buses. ($2.5 billion)
• Clean School Bus Program (part 2): Funding for low and zero emissions school buses. ($2.5 billion)
• Electric or Low Emitting Ferry Pilot Program: Electric or low emitting ferry pilot that provides grants for the purchase of “alternative” fuel and electric ferries. ($250 million)
• National Electric Vehicle Formula Program: Funding to states to “strategically” deploy EV charging, maintenance for the infrastructure, and “establish an interconnected network to facilitate data collection, access and reliability.” ($5 billion)
• Port Infrastructure Development Program: Funding for projects that improve resiliency of ports, including port electrification and “Electric vehicle charge or hydrogen refueling infrastructure for drayage, and medium or heavy-duty trucks and locomotives that service the port and related grid upgrades.” ($2.25 billion)

This is our summary of the bill to date, but these numbers are subject to change as we learn more. Visit here for our ongoing tracking of the bill. 

How do these numbers shape up? The $7.5 billion for EV charging is half what the Biden Administration proposed and the $5 billion for zero emissions school buses (including low emissions buses) is far from the $20 billion Biden initially requested for electric school buses.

Our analysis indicates that there is a $39 billion public charging gap for only passenger vehicles between now and 2030. The proposed bills could plug some of the gap, but it will depend on final numbers and how the funding is allocated. The bipartisan infrastructure bill, for instance, allocates $7.5 billion to EV charging infrastructure (including $2.5 billion in funding eligible for other alternative fuels).

Our analysis also indicates that earlier EV investments will lower infrastructure costs over the long term – for instance, installing six to 10 fast charging ports at a location versus just two will save $8.4 billion in installation costs between 2021 and 2030. To put the cost differentials in plain terms, it is cheaper to build six charging stations today than two today, two next year, and two the year after. Investing now in the infrastructure required for the energy transition makes good economic sense in the long run.

Current levels of investment in EVs from utilities and from government totals around $4.5 billion. The scale of investment proposed in these bills is already larger than existing investments but combined with announced investments from the private sector, falls short of the investment needed to prepare the market for widescale electrification this decade.

Of course, there is also The Reconciliation Bill – valued at $3.5 trillion currently. This proposal is now out of committee in the Senate, but we don’t know how much will be allocated to transportation electrification. The calculation by Democrats is that no Republicans will sign on to the bill, and so they are charging towards reconciliation. Could it bridge the gap between other bills and Biden’s pledge for $174 billion for electric vehicles?

The current form of the bill could still be reshaped based on negotiations and Speaker Pelosi has indicated that she won’t pass the Bipartisan Bill until the Reconciliation Bill has passed in the Senate. So when will we know how this goes? Majority Leader Schumer has indicated that both bills should be passed in this legislative session. The session ends on August 9^th but that date could be pushed out. In short – stay tuned.