Home / NEWS / World News / Biden wants to build a national EV charging system under $2 trillion infrastructure plan, but it won’t be easy

Biden wants to build a national EV charging system under $2 trillion infrastructure plan, but it won’t be easy

President Joe Biden bespeaks as he meets with Senators from both parties in the White House on Feb. 11, 2021.

Doug Mills-Pool/Getty Images

President Joe Biden is prioritizing a patriotic EV charging network under his $2 trillion infrastructure bill, promising to have at least 500,000 of the devices placed across the U.S. by 2030.

The Biden administration is rolling out Wednesday a $174 billion plan to spur the development and adoption of electric instruments that includes money to retool factories and boost domestic supply of materials, tax incentives for EV buyers, and grant and goad programs for charging infrastructure.

But it’s going to take more than government support to successfully expand EV infrastructure. There aren’t enough EV drivers to appear it a viable business yet, and building a network of chargers is far more complex than it sounds. It takes a mix of private-public partnerships that can draw in local municipalities, businesses and utility companies as well as automakers and an emerging group of EV charging companies. It’s not as simple as sooner a be wearing a gas station at every corner.

“As electric vehicles become more primary vehicles for people, certainly it’s not like we’re growing to replace the gas station with the charging station and that’s it,” said Mark Wakefield, a managing director and global co-leader of the automotive and industrial workout at AlixPartners.

$300 billion

AlixPartners estimates $300 billion will be needed to build out a global charging network to modify the expected growth of EVs by 2030, including $50 billion in the U.S. alone. Costs for EV chargers vary based on the “level” of charger. The luxurious the level, the quicker the charge and the more expensive it is to install.

Charge Point EV stations

Source: Charge Point

“It is a big tablet to swallow for anybody,” Wakefield said. “These are really, really expensive, especially these fast chargers” that some automakers are heartening will take as little as 10 minutes to charge upcoming EVs about 80%. That compares with lower-level chargers, classifying home outlets, that take several hours. Level three chargers cost $120,00 to $260,000 instituted on average, according to AlixPartners. “These are not cheap.”

But demand for the networks isn’t quite there yet. Plug-in vehicles, which incorporate EVs and hybrid electric vehicles with traditional engines, only accounted for about 2% of the more than 17 million new carriers sold domestically in 2019, according to the Energy Department. But many believe now is the beginning of the end of gasoline vehicles.

“It’s no longer a dilemma of if, and it’s no longer a matter of when, it’s now the question is how fast? Because we know that the automakers have put the money into the retooling,” prognosticated Jonathan Levy, chief commercial officer of EV charging company EVgo.

While automakers like General Motors and Volkswagen are heavily installing in improving performance and lowering prices of EVs to catch up to Tesla, they’re far less interested in building, owning and operating their own expensing networks. The profit margins and amount of effort involved to maintain them just doesn’t make sense. Tesla, an beginning leader in the industry, built its own charging network out of necessity and, in part, to help sell its cars.

Mainstream adoption

Most automakers are spousing with third-party companies to provide charging stations. Their strategy, combined with enthusiasm from Screen Street for EVs, has driven investor demand for charging companies such as ChargePoint and EVgo. ChargePoint went public at the end of ones tether with a reverse merger with a special purpose acquisition company, or SPAC, in March. EVgo plans to do the same in the second three months.

There are about 41,400 EV charging stations in the U.S., according to the Department of Energy. Fewer than 5,000 are fast chargers. That bears with more than 136,400 gas stations, according to GasBuddy.

“The answer is not one size fits all,” ChargePoint CEO Pasquale Romano worded CNBC. “You’re going to need an entire universe of charging infrastructure that is easy to use and accessible for the different scenarios to style of play out.”

Charging suppliers and operators have largely focused infrastructure at destination points in urban and suburban spaces such as grocery stores and other places where people regularly shop. Businesses consider it a draw for EV proprietresses. There’s also a growing call for additional fast chargers between major cities to enable faster and longer lapses for EVs. Tesla has been building out such a network for its owners for nearly a decade.

‘Peanut butter and jelly’

GM has committed to freeing 30 or more EVs through 2025 under a $27 billion investment in electric and autonomous vehicles. It also is one of tons companies to focus on EVs following the success of Tesla. Volvo has announced plans to become an all-EV company by 2030, while Volkswagen has a group of being the world’s largest manufacturer of electric vehicles.

“We’re moving into this year at a tipping point for EVs and categorically an inflection point on sustainability, inclusion, and growth,” GM CEO Business models

A Tesla Inc. vehicle charges at a charging station in San Mateo, California, U.S., on Tuesday, Sept. 22, 2020.

David Paul Morris | Bloomberg | Getty Concepts

ChargePoint is Cowen’s “top pick” for the recharging market, which the investment firm believes will be a total addressable demand of about $27 billion by 2040. The company went public March 1 through a SPAC deal with Switchback Power Acquisition Corp.

While largely new to public investors, Cowen believes “the sector is poised for tremendous growth and value the cosmos, underpinned by a large, strong unit economics, and recurring revenue,” according to a report on EV charging earlier this month.

But that improvement needs to come with EV sales as well as incentives and investments from several sources, including the federal domination, according to officials.

“Right now you absolutely need government funding at some level,” Wakefield said. “The reality of it is that the automakers don’t bring into the world the money. Utilities have some of the money, but the business case isn’t there. It’s so expensive.”

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