Funding to build EV charging infrastructure will shift from federal to states, report says
Initial effort boosted by Bipartisan Infrastructure Law, but long run backing will have to come from individual states, according to S&P Global Ratings.
The push to develop a national electric vehicle (EV) charging infrastructure is currently being jump-started by $7.5 billion from the Bipartisan Infrastructure Law, but in the long run, individual U.S. states will have to seize the lead, according to a report from S&P Global Ratings.
While the federal funding is helping to develop the early EV industry and encourage consumer adoption, it is merely a down payment for potential future needs, the organization said in its report, "U.S. States Jump Start Electric Vehicle Charging Infrastructure."
Challenges to that effort will include identifying future funding sources, managing policy objectives and regulatory requirements, and considering evolving auto manufacturing capabilities and consumer preferences. Adding to the complexity is the sheer number of stakeholders across the universe of global auto manufacturers, consumers, and utilities, as well as local governments and private developers looking to partner with public entities.
And on an even longer horizon, as consumer EV adoption increases, states will also need to supplement and replace the motor fuel tax revenue that now funds highway and bridge maintenance. However, S&P Global Ratings said they expect that motor fuel tax revenue bonds will remain resilient in the face of this modernization.
"Forecasts vary, but the trajectory is clear: The U.S. needs a large-scale buildout of charging infrastructure to meet state and federal targets; and consumer demand for speed, reliability, and price," S&P Global Ratings credit analyst Scott Shad said in the paper.
In terms of specific targets, S&P Global Mobility's forecast indicates the number of public charging stations in the U.S. will grow to almost 1.8 million by 2030 from about 140,000 at the end of 2022, complemented by a steep increase in residential chargers to about 10 million in 2030. EV infrastructure is the critical link in addressing range limitations, charging speeds, and reliability considerations that consumers cite as key barriers to switching to an EV.