The Ecosystem of Government EV Investment and Incentives

(Rick Sander, CEO, Tuesday May 4, 2021)

One of the “brakes” on any technological advancement (regardless of the market) is inertia, and one of the strongest forms of inertia is when new technologies are more expensive than existing ones (even if the new technologies are better). Electric vehicles (EVs), whether passenger autos or electric buses, are no different. This is one of the reasons why the federal government (and a number of state governments) have a wide variety of programs to “ease” the transition for both vehicle manufacturers and vehicle owners/operators from internal combustion engine (ICE) powered vehicles (primarily gasoline and diesel) to EVs. These programs generally take one of several forms:

  • Tax credits and/or rebates for the purchase of EVs (whether consumer autos/light trucks/SUV or commercial vehicles;
  • Tax credits and/or grants for the fielding of EV charging stations;
  • Grant program and tax credits for manufacturers to develop new vehicles, powertrains, and charging equipment.

There are a variety of agencies in the US that engage in one or more of these types of programs. Most of them in the US are government departments and agencies such as the US Department of Transportation (DoT) and Department of Energy (DoE), the California Energy Commission (CEC) and California Air Resources Board (CARB), and the New York State Energy Research and Development Authority (NYSERDA). Others such as Electrify America (EA) (born out of judicial actions resulting from the ‘diesel emissions cheating scandal’) or electric utilities are companies looking to break into the EV marketplace. Finally, most tax credits are the result of legislative actions. In scope and size over the past few years, the CEC (funded by tax contributions from investor-owned utilities in California) was probably one of the most well-financed agencies pushing EV adoption. With the Biden Administration, the DoT and DoE are expected to jump headlong into the fray with multi-billion dollar funding levels, and which will provide grants to states as well.  

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