The EV market has been waiting for a moment like this: On September 27, 2022, the Biden administration approved EV charging network funding plans for all 50 states, paving the way for a massive expansion of EV infrastructure across the country. This approval marks the beginning of a $5 billion investment in EV infrastructure expansion over the next five years, acting as an important push to encourage a widespread public transition to electric vehicles.
While this is fantastic news in and of itself, it may not be immediately clear what this funding covers or how EV charging businesses can benefit from this new source of funding. Read on to discover how this new federal program will expand EV infrastructure, how its passing will impact the EV charging industry, and what businesses will benefit most.
The National Electric Vehicle Infrastructure Formula Program (or NEVI Formula for short) is a federal program proposed by the Biden administration in February 2022. The program's goal is to provide funding for state governments to build and expand publicly-available electric vehicle charging networks across “designated alternative fuel corridors,” public roads, and other publicly accessible locations to increase EV adoption and reduce greenhouse gas emissions.
To enact this plan, the Biden administration has set aside $5 billion in funds across FY 2022–2026, with $1 billion apportioned across all states each year. States are required to submit their plans for allocating received funds on projects “directly related to the charging of a vehicle and only for EV charging infrastructure that is open to the public or to authorized commercial motor vehicle operators from more than one company.” These networks must also support data collection for purposes of ensuring access and reliability of the network.
Additionally, the Biden administration laid out federal minimum requirements for state plans, which include a minimum of four 150 kW combo charging system DC fast chargers per site, a minimum power capability of 600 kW per site, and new charging stations placed 50 miles apart and within one mile of the interstate exit or highway.
As of September 27, 2022, all 50 states, D.C, and Puerto Rico have approved plans under the NEVI Formula for FY22 and FY 23, with allocated funds totaling more than $1.5 billion, which will aid the construction of EV charging networks that cover nearly 75,000 miles of highway across the country. Additional plans will need to be submitted for the following fiscal years.
The NEVI Formula is the largest singular influx of funding into the EV charging industry so far. It will likely mark a tipping point for public acceptance of electric vehicles and the beginning of a larger transition to electronic vehicles and alternative fuel sources.
In many ways, the initiative is similar to President Roosevelt’s Federal-Aid Highway Act of 1944, which provided federal funds for states to build our current network of interstate highways across the country. While the Biden administration’s plan may not seem as radical a change (since it’s building on top of already-existing highway infrastructure), the result is no less drastic. With buy-in from the federal government and infrastructure from state governments, private EV charging businesses can be sure they will have long-term support to build their networks. It may finally be the push that convinces the public that EVs are a viable alternative to gas-powered cars.
This public support is perhaps the most important consequence of the NEVI Formula roll-out. Logistics remains the most significant barrier to EV adoption, with 61% of respondents of a Consumer Reports survey saying EV charging availability concerns prevented them from purchasing their first electric vehicle. The Biden administration’s plan would go a long way toward addressing those concerns. It aims to convert small, isolated networks into reliable chains that ensure citizens and commercial EV drivers have the peace of mind to know they can get to where they need to go, no matter where they are in the country. When combined with other planned initiatives — like rebates and supply chain expansion — businesses can expect the EV charging station market to grow beyond its projected global market worth of $111.90 billion by 2028.
In addition to allocating funds for states to build EV charging networks, the Biden administration proposes new standards for stations built with these funds to provide the most seamless experience possible for the public. The proposal includes standards such as:
The administration is still working out the specifics for how EV charging businesses will meet these requirements, so details could change by the time of adoption.
As state governments construct their EV charging networks, EV charging businesses should keep these ideas in mind. The businesses most likely to benefit from the NEVI Formula are the ones that maintain hardware-agnostic software and support the most commonly-used charging plugs and levels to ensure EV charging remains accessible to the general public.
It’s still early days, so follow the Joint Office of Energy and Transportation and your state’s Department of Transportation websites to find out how and when you can get involved. Each state’s DoT website should have a section for business contracts and grant opportunities, so be sure to get in touch with your local government as soon as possible.
In the meantime, you’ll need a charging station management system to process your EV infrastructure, and that’s where ChargeLab can help. Our operating system is open, interoperable, and hardware-agnostic, ensuring it will work across the breadth of personal and commercial EV charging stations on the market. Plus, it allows charging businesses of any size to manage power and load balancing, process payments, and monitor efficiency and technical issues across your entire network. Learn more about how ChargeLab can enhance your EV charging business today.