In this year-end edition of EV Roundup, we look back at
developments in the EV space for a bird's-eye view of where the
U.S. stands 2-years post-Inflation Reduction Act (IRA) enactment.
Indeed, we are starting to see IRA dollars translate into tangible,
on-the-ground projects producing real economic benefits in both red
and blue states. These economic benefits are a direct result of
IRA-spurred private investment in domestic clean tech and clean
energy industries. Perhaps more meaningfully, these benefits
signify that more Americans are continuing to enter the clean
energy workforce.
Looking at 2024 EV sales, the U.S. made meaningful strides toward
achieving the Biden Administration's goal of having 50% of all
new vehicle sales be electric by 2030. Since the IRA was enacted,
purchases of zero-emission vehicles grew to $157 billion, or nearly
double the investments made pre-IRA.
There has been much speculation about how the incoming Trump
Administration will shape the future of the domestic clean
transportation sector. Among other things, the IRA provides
consumer tax credits for up to $7,500 for new EVs, $4,000 for used
EVs, and tax credits for home chargers that, some worry, could be
unraveled by the incoming Administration. These and other IRA
programs that aim to spur domestic industry and continue tariffs on
imports are not likely to go away quickly. It's too soon to say
how the markets will react to any policy changes made by the Trump
Administration, but it's a good time to reflect on where we are
now and where we need to go to achieve a clean energy
transition.
Federal
- At the end of September 2024, Biden-Administration tariffs went into effect on certain goods imported from China, including a 100% tariff on EVs and 25% on EV batteries imported from China. EV competition from China, and the incoming Trump administrations' reactions to such competition, will be worth watching in the coming years, particularly as the U.S. seeks to spur domestic supply chains for EVs and components.
- In a brief recently filed in the D.C. Circuit case Commonwealth of Kentucky et al. v. U.S. Environmental Protection Agency et al., the EPA defended its authority to regulate both gas-powered and electric vehicles under Section 202 of the Clean Air Act. Such authority, the EPA stated, supports EPA's final rule published in April 2024 that is at the heart of the case before the D.C. Circuit (case number 24-1087). According to petitioner red states, trade associations, and car dealerships, the EPA rule would effectively mandate the electrification of fleets to achieve strict vehicle emissions limits. The rule would impose a 50% reduction on CO2 emissions from light-duty vehicles and a 44% reduction for medium-duty vehicles like pickup trucks and vans. Opponents argue that the rule exceeds EPA's authority to regulate within its "zone of interests." We are continuing to watch this case as it unfolds.
- The Joint Office of Energy and Transportation took the next step in establishing the J3400 standard as an open standard for EV charging hardware. Previously known as the North American Charging Standard, the J3400 standard meets federal minimum standards for network interoperability across different software networks and allows an EV to work with any charger. The Joint Office has been working with SAE to develop the J34000 EV Coupler Recommended Practice, a framework for any supplier or manufacturer to deploy the J3400 standard.
State
- Massachusetts installed the East Coast's first EV charging stations funded by the federal Charging and Fueling Infrastructure (CFI) Program. The charging stations – 4 DC fast charging ports and 4 Level 2 charging ports – were installed in the Town of Deerfield, MA with $2.46 million in CFI funding awarded under the Bipartisan Infrastructure Law. The charging stations are located near Interstate 91 in Massachusetts, which serves multiple modes of transportation and drivers from neighboring New England states up to the Canadian border.
- In the summer of 2024, Rhode Island became the first state to achieve "fully built-out status" by completing its build-out of direct current fast charging stations along Alternative Fuel Corridors within its borders. The chargers were installed with funding made available through the National Electric Vehicle Infrastructure (NEVI) program. In November 2024, Rhode Island launched Phase 2 of its NEVI program, which aims to install additional DCFCs and Level 2 chargers across the state. The Phase 2 solicitation offers an initial $10 million in competitive funding and seeks community-based approaches to siting charging infrastructure.
- Congestion pricing is back in New York. Per a plan recently approved by the Federal Highway Administration, starting January 5, 2025, vehicles entering the "Congestion Relief Zone" – local streets and avenues in Manhattan at or below 60th Street (with certain limited exceptions) – between 5 am and 9 pm on weekdays and 9 am to 9 pm on weekends will be required to pay a toll. The toll ranges from $4.50 for motorcycles and $9 for passenger and small commercial vehicles to $14.40 for small trucks and some buses. The toll for passenger cars would increase to $12 in 2028 and then $15 in 2031. Implementing congestion pricing in the busiest parts of Manhattan has been decades in the making. Most recently, congestion pricing almost failed in June 2024, when Governor Kathy Hochul put the plan on indefinite pause, stating that the previously proposed up-to $15 toll would have additional, unanticipated cost impacts on the City's most frequent travelers. The current plan could be stalled in courts, as opponents have indicated the plan is not likely to go into effect without facing legal challenges.
Industry
- Sales of plug-in electric vehicles (PEVs) grew over the last year. Through Q3 2024, 1,137,505 PEVs have been sold in the U.S. this year – a 7.8% increase from the previous year. PEVs comprised 10.5% of total light-duty vehicle sales in September 2024 (approximately 122,773 PEVs). Of those, most comprise battery electric vehicles (BEVs), with the remainder comprising plug-in hybrid EVs (PHEVs). These September 2024 sales mark a 13.7% decrease in PEV sales compared to September 2023 (notably, overall light-duty vehicle sales dropped 12.8% in September 2024 as compared to September 2023).
- As of December 1, 2024, there are more than 204,000 publicly accessible EV-charging ports (DCFC and Level 2) available in more than 74,200 locations across the country – more than double the number of public chargers available in 2020. In the last quarter, an additional 12,000 public charging ports have come online.
- As of Q2 2024, announcements of IRA funding to manufacturing in the domestic EV supply chain increased about 25% compared to the pre-IRA period. At the beginning of Q4 2024, the U.S. Department of Energy announced over $3 billion in grants to U.S. companies to boost domestic production of advanced batteries and other materials needed in EVs. The grants will fund projects in 14 states, including Michigan, North Carolina, Ohio, and Texas.
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