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For more than 100 years the internal combustion engine (ICE) dominated vehicle design, bringing with it large increases in greenhouse gas (GHG) emissions. In 2015, the number of fossil fuel-propelled cars in the United States rose to 113 million,¹ up from just 8,000 in 1900.*² Now, plug-in electric vehicles (PEVs) provide a cleaner alternative that not only reduces GHG emissions, but also provides local air quality, noise reduction, and national security benefits. PEVs are an integral component in the suite of technologies that will help meet the United States’ commitments under the Paris Agreement—an ambitious 26 percent to 28 percent reduction in GHG emissions by 2025, compared with 2005 levels.³

As with any major technological transformation, transitioning to an electrified transportation system will not be easy nor cheap. A century of public and private development led to the existing fleet of ICE vehicles, complemented by more than 100,000 gas stations,⁴ federally funded roads that connect communities,⁵ and a vast network of service stations and dealerships. With about 800,000 PEVs⁶ and 18,000 charging stations⁷ on the road now, the revolution is just beginning.

Overview of PEVs and charging infrastructure technology

This content relies on language published in a previous CAP report on electric vehicles⁸ and is provided here for background.

“Electric vehicles” (EVs) is a broad category that can mean different things in different situations. To avoid confusion, this report generally avoids using the term “electric vehicle.” It focuses on the benefits of and policies related to the deployment of PEVs. PEVs can be charged in whole or in part by an off-board electric power source. This is distinct from hybrid electric vehicles, which supplement an ICE with battery power—often charged through regenerative braking—but cannot be plugged in.

PEVs are further divided into plug-in hybrid electric vehicles (PHEVs) and battery electric vehicles (BEVs). PHEVs typically run on electricity for shorter ranges—currently up to about 40 miles—then switch over to a gasoline-powered ICE when the battery is depleted. BEVs run only on electricity; they typically travel up to 100 miles on a single charge, and high-end models can reach up to 250 miles.⁹

PEVs can be connected to the electricity grid and recharged through charging infrastructure—sometimes referred to as EV supply equipment. The types or levels of charging infrastructure are commonly defined as Level 1, Level 2, and direct current (DC) fast chargers. As battery technology improves, vehicles will be able to go farther on a single charge. This report focuses on public Level 2 chargers and DC fast chargers.

Tipping the balance of vehicles toward PEVs requires the funds to incentivize the widespread adoption of new vehicles and their charging infrastructure, along with the will to overhaul the existing system. State and federal policymakers need to find new and creative ways to put more PEVs on the road. Policy leaders across the country are spurring investment in charging infrastructure through the use of state financial incentives and funds available through the Volkswagen (VW) settlement, which requires VW to make payments to resolve the federal government’s allegations that the company cheated emissions standards.¹⁰ But current levels of investment are not enough.

This report focuses on what states can do to ensure that adequate charging infrastructure is available. It first provides background on the number of PEVs needed to reduce GHG emissions from the transportation sector. It then discusses the charging infrastructure investment gap and provides policy recommendations to help close it.

The Center for American Progress estimated the number of vehicles and charging stations that the country will need to deploy by 2025 in order to meet its Paris Agreement targets, as well as the capital costs of installing the new public chargers needed. CAP found that:

• The United States needs to add 14 million new PEVs and more than 330,000 new public charging outlets by the end of 2025.
• Many states are well on their way to having the public Level 2 and DC fast charging infrastructure needed by 2025, but the country needs significantly more to meet the Paris Agreement goal. California, Colorado, Connecticut, Hawaii, Maryland, Nevada, Oregon, Vermont, and Washington state are leading the way.
• Existing state and VW funds can provide only about 50 percent of the funding needed to deploy adequate public charging infrastructure through 2025. Additional public resources and private investment are necessary to close the remaining $2.3 billion gap.

As states spend VW settlement funds, they will need to find new funding sources to continue progress into the midcentury. States should work with their utilities and legislatures to advance new investment mechanisms, as well as apply for federal grants and join or create revenue-generating carbon pricing programs. Additional private investment is also necessary, as is the extension of federal tax credits for EV charging infrastructure—which expired at the end of the 2017 tax year.

In its 2015 submission to the U.N. Framework Convention on Climate Change in accordance with the Paris Agreement, the United States committed to reducing GHG emissions 26 percent to 28 percent below 2005 levels by 2025.¹¹ In 2005, the transportation sector was responsible for 27 percent of all U.S. GHG emissions, a figure that rose to 28.5 percent in 2016¹²—the first year that transportation surpassed electricity to become the largest source of U.S. GHG emissions.¹³ Light-duty vehicles (LDVs) have consistently made up about 60 percent of the transportation sector’s emissions.¹⁴

EVs can help the United States reduce LDV emissions and move the country closer to its climate goals. Reducing LDV emissions by 16 percent below 2005 levels by 2025 would meet an ambitious national goal of a 26 percent reduction in the LDV sector—factoring in the approximately 10 percent reduction from the 2005 baseline that LDVs already achieved.¹⁵ CAP converted this reduction from a percentage to the specific number of vehicles and chargers needed to meet U.S. emissions goals.

Vehicles

Estimating the number of PEVs needed to achieve emissions reduction goals in the LDV sector is a complex calculation that involves many assumptions. CAP’s analysis is based on a 2018 report by the Argonne National Lab¹⁶ that estimated carbon dioxide emission savings from PEVs as compared with those from an ICE vehicle in the 75th percentile for fuel economy in its class size and year—in other words, the ICE vehicle that a PEV would replace. (see Appendix for full methodology) Figure 1 shows the number of PEVs sold in the United States from 2011 through 2017, as well as the number of new PEVs needed through 2025 to achieve intended emissions reductions—assuming a linear increase in vehicles from 2017 through 2025. The United States needs to add nearly 3 million PEVs in the year 2025—and 14 million vehicles cumulatively from 2018 to 2025.

A national target of 14 million new PEVs is on par with existing commitments from states. In 2013, the governors of California, Connecticut, Maryland, Massachusetts, New York state, Oregon, Rhode Island, and Vermont signed a memorandum of understanding (MOU) that set a goal to have a collective 3.3 million zero-emissions vehicles—PEVs and another EV category, fuel cell EVs¹⁷—in their states by 2025.¹⁸ These states comprised a combined 26 percent of the U.S. vehicle market in 2017;¹⁹ thus, if all other states and Washington, D.C., strive for a similarly ambitious goal, the country could reach the 14 million vehicles needed to meet the Paris Agreement target.

Charging infrastructure

PEVs will require charging infrastructure to support them. The U.S. Department of Energy (DOE) has developed a new tool—EVI-Pro Lite—that uses data on personal vehicle travel patterns, EV attributes, and charging station characteristics to estimate the quantity and type of charging infrastructure necessary to support regional adoption of EVs.²⁰ Based on the cumulative number of PEVs that CAP determined are needed in a given state, the DOE tool provides an estimate of that state’s charging infrastructure needs. (see Appendix for more information) CAP found that overall, the United States needs to deploy at least 330,000 new public charging outlets by 2025 to meet PEV demand. Figure 2 and Figure 3 show what percentage of Level 2 and DC fast chargers, respectively, each state already has compared with what CAP determined it will need through 2025. Only public Level 2 chargers and DC fast chargers are considered in this report, though states will need workplace and residential charging as well.

States have made varying amounts of progress toward their 2025 goals. California, Colorado, Connecticut, Hawaii, Maryland, Nevada, Oregon, Vermont, and Washington state are leading the way. These states have more than 15 percent of both the public Level 2 and DC fast chargers that CAP determines they will need for 2025. (see Figure 2 and Figure 3) Washington, D.C., has nearly all of the Level 2 chargers it needs to contribute to the United States’ emissions reduction goals, but no other state is above 50 percent. No state—including Washington, D.C.—has more than a third of the DC fast chargers needed by 2025, and Alaska and North Dakota still have no DC fast chargers.

Some regional trends are apparent from Figure 2 and Figure 3. Many states in the West, Midwest, and New England are particularly far ahead in terms of Level 2 charging deployment. (see Figure 2) The eight states working toward a collective 3.3 million zero-emissions vehicles on their roads—those that signed the 2013 MOU—each have more than 15 percent of the public Level 2 chargers that CAP determined they will need by 2025. To some extent, states with larger populations are further ahead on Level 2 charging, though notably, Missouri and Kansas have significant charging infrastructure. This progress largely can be attributed to Kansas City, which, driven by investments from Kansas City Power and Light Co., has seen a rapid and substantial increase in its number of EVs and charging stations in the past several years.²¹

Many states in the West and Northeast already have more than 15 percent of the DC fast charging infrastructure that CAP determined they will need by the end of 2025. (see Figure 3) Some of the progress in the West is likely due to the Regional Electric Vehicle Plan for the West (REV West) and its goal to create an Intermountain West Electric Vehicle Corridor made up primarily of DC fast chargers. This corridor would “make it possible to seamlessly drive an electric vehicle across the Signatory States’ major transportation corridors.”²² Currently, the signatory states are Arizona, Colorado, Idaho, Montana, Nevada, New Mexico, Utah, and Wyoming.

The REV West and MOU states demonstrate that concerted policy effort can produce results. Yet, while many states are well on their way to having the public Level 2 and DC fast charging infrastructure that CAP determined they will need by 2025, significantly more investment is needed. The next section explores the funding currently available and what states still need to close the observed gaps in charging infrastructure.

Figure 2 and Figure 3 demonstrate that there is a substantial gap between the amount of public Level 2 and DC fast chargers currently available and what is necessary to support the scale of PEV deployment needed to reach U.S. climate goals. Building the necessary chargers will require large-scale capital investment.

This report considers only the cost of the unit and installation and applies mean values for these costs across the country. (see Appendix for more detailed methodology) The capital costs of installing charging infrastructure can vary widely, reflecting region-, site-, and charger-specific costs, and installers may find ways to reduce the cost of purchasing and installing charging infrastructure. For example, they could select less expensive charger models, choose sites strategically, or plan for charging infrastructure in new building construction.

In order to purchase and install by 2025 the 330,000 new public Level 2 and DC fast charging outlets that CAP’s analysis determined are necessary, the country will need to spend a cumulative $4.7 billion through 2025. States have already found ways to fund nearly half of this through financial incentives and other investments and allocation of VW funds.

State-level financial incentives and investments

Existing state-level financial incentives and investments, if maintained, could provide about a quarter of the funding needed through 2025—an estimated $1.1 billion. States currently provide a variety of financial incentives for charging infrastructure, namely in the form of grants, tax credits, and rebates. Seventeen states have a financial incentive that lowers the cost of public Level 2 and DC fast chargers for installers.²³ These incentives range from Washington state’s tax exemption for installation of chargers²⁴ to New York state’s commitment of $250 million for charging infrastructure through 2025.²⁵ These numbers are calculated based on CAP’s determination of a state’s charging infrastructure needs, though some states may invest more. New York state’s commitment, for example, will likely result in more chargers by 2025 than this analysis considers necessary—but the investment sets New York state and the country on a much-needed path to deep decarbonization by the midcentury.

VW settlement

Between 2016 and 2017, Volkswagen AG, Audi AG, Dr.-Ing. h.c. F. Porsche AG, Volkswagen Group of America Inc., Volkswagen Group of America Chattanooga Operations LLC, and Porsche Cars North America Inc.—known collectively as “Volkswagen”—agreed to settlements to resolve the federal government’s allegations that the company cheated emissions standards for oxides of nitrogen (NOx) under the Clean Air Act.²⁶ Of the settlement funds, $2.7 billion will be used to establish an Environmental Mitigation Trust that states and territories may use over the next 10 years to invest in specific transportation projects proven to reduce NOx emissions. Each U.S. state and Washington, D.C., receive a specific allocation of funds. Of that, they may designate up to 15 percent to build EV charging infrastructure.²⁷

At the time of publication, 18 states had finalized their mitigation plans detailing how they intend to spend their allocations.²⁸ Seven states plan to spend the full 15 percent on charging infrastructure, and four states have elected to devote none of their funds to charging infrastructure. However, an additional 12 states in the draft plan phase have proposed allocating the full 15 percent. Figure 4 presents the cost reduction possible given that all states maintain their final or draft plan allocations, and all states in predraft phase commit the full 15 percent. This could reduce the total cost of charging infrastructure investments by $185 million and $136 million, respectively.

In addition to the Mitigation Trust, VW will also invest $2 billion over the next 10 years in charging infrastructure and in the promotion of zero-emission vehicles—including BEVs, PHEVs, and fuel cell EVs. Of the $2 billion, $800 million is to be spent in California and the remaining $1.2 billion will be invested in other states. VW established an organization, Electrify America, to manage the investments. Electrify America has detailed its spending plan for the California and national funds and has begun to build out infrastructure and improve educational outreach across the country.²⁹

Figure 4 considers the impacts of funds managed by Electrify America on the total investment needed by the end of 2025. For its first cycle of investments—January 2017 through June 2019—in states outside California, Electrify America plans to spend $190 million on DC fast chargers and $40 million on community charging, including public Level 2 chargers.³⁰ In this first cycle, these investments will be in several cities: Boston; Chicago; Denver; Houston; Miami; New York City; Philadelphia; Portland, Oregon; Raleigh, North Carolina; Seattle; and Washington, D.C.³¹

Considering other infrastructure

This report covers a small piece of the charging infrastructure landscape; additional research and investment is needed in workplace charging and residential charging. According to CAP’s analysis, the United States needs nearly 500,000 workplace chargers by the end of 2025. There is no comprehensive data set, however, that tracks the number of workplace chargers in the United States already to determine how close states are to this target. For comparison, the DOE’s Workplace Charging Challenge aimed to partner with 500 employers who commit to providing their employees with access to charging by 2018. By the end of 2016, partners had planned to install nearly 7,500 stations.³²

Putting 14 million new PEVs on the road by 2025 also will require additional home charging capacity. Using the DOE EVI-Pro Lite tool, CAP estimates that the country will need nearly 13 million additional home chargers by 2025. As with workplace charging, data gaps exist for residential charging. And while there are a variety of state programs to fund workplace and residential charging, without these data, it is difficult to know to what extent policy should support development in these sectors.

Existing state incentives and funds from the VW settlement can only provide about half of the United States’ public charging infrastructure needs through 2025. According to CAP’s analysis, states need additional public resources and private investment to close the remaining gap of $2.3 billion. This funding should come from a combination of increased federal, state, and local ambition, as well as the private sector.

Increase state ambition

The easiest way states can fund charging infrastructure is to fully utilize the funds available to them through the VW Mitigation Trust. Combined with planned allocations in final and draft plans, the total cost of necessary investments could be reduced by $322 million if all states in the predraft phase of their mitigation plans commit all funds available.

Yet, as states spend the VW settlement funds, they need to establish an alternative funding source to continue progress into the midcentury. Even after taking into consideration VW funds and state-level financial incentives, there is still a $2.3 billion gap by 2025. After 2027—the end of the Electrify America investment cycles and the expiration of Mitigation Trust funds—the country will need to find a new way to fund investments in charging infrastructure deployment.

States could do the following to increase funding for charging infrastructure:

• Work with state legislatures to provide financial incentives for charging infrastructure. California, for example, has continually increased ambition and innovated around charging infrastructure funding and financing. These efforts have resulted in the state already reaching more than 40 percent of the public Level 2 charging it needs by 2025. In fiscal year 2017, California allocated $17 million to charging infrastructure and about the same in fiscal year 2018. However, after using the DOE’s EVI-Pro Lite model to analyze the charging infrastructure needed to match the state’s vehicle deployment goals, California plans to invest $134.5 million in fiscal year 2019—and Gov. Jerry Brown (D) has set ambitious targets for the state’s future spending.³³
• Work with utilities to provide financial incentives for and to invest in charging infrastructure. Utilities can facilitate the PEV revolution by directly investing in charging infrastructure. States should work to engage utilities and eliminate regulatory barriers that may preclude their investment. Chargers can provide revenue for the utility and at the same time allow for the much-needed deployment of clean transportation solutions. The role of the utility in financing and operating charging infrastructure is being actively debated in states across the country and many public utility commissions are starting to permit the rate-financing of charging infrastructure.³⁴ For example, Ohio regulators approved a rate plan for American Electric Power Company in April 2018 that allows the utility to provide rebates aimed at deploying 300 public Level 2 charging stations and 75 DC fast charging stations.³⁵
• Join or start a carbon pricing program that generates revenue that could be used for charging infrastructure. Delaware, for example, is a member of the Regional Greenhouse Gas Initiative (RGGI) and uses a portion of the money it receives from RGGI to fund rebates for chargers and a competitive grant program for DC fast chargers.³⁶ In most existing and proposed programs, states have flexibility in determining how revenue is used.
• Direct state departments of transportation to consider ways to incorporate charging infrastructure into their investment plans. State departments of transportation could inv