Electric vehicles are on the rise while charging stations lag behind
As the Biden administration prepares to give states $7.5 billion for new charging stations, a similar recent effort suggests there is a tough road ahead. States received $424 million that could be used for charging stations as part of a $2.8 billion settlement by Volkswagen AG to resolve allegations that it cheated on diesel emissions tests. So far, more than four years later, they’ve spent about 48% of the fees.
Six states, including Illinois and Connecticut, that intend to use VW settlement funds for chargers have not yet disbursed funds. According to data from Atlas Public Policy, a Washington, DC research firm that tracks the electric vehicle industry, four states plan to use the money for other projects, such as lower-emission bus fleets. Thirty states have handed out most of their available load money, including Hawaii, New Mexico, South Dakota and New York.
Texas spent $21 million of VW money on first-come, first-served chargers last November. The money was gone within a minute, records show. Out of 251 applications, two companies won 85% of the grant: oil giant Shell PLC and Buc-ee’s Ltd., a rest stop chain known for its huge bathrooms and beaver mascot.
“We were shocked. And we were a bit slow in hindsight,” said Kevin Smartt, the general manager of Austin-based TXB convenience stores, which had hoped to add fast chargers to 12 to 15 existing locations but weren’t emailing fast enough to say any to get the money.
Across the US, new chargers are needed to meet expected demand as major automakers from General Motors Co. to Ford Motor Co. accelerate plans to transition to electric vehicles following the success of EV pioneer Tesla Inc. President Biden signed an executive order calling for half of all cars to be electric or alternative fuel vehicles by the end of the decade.
U.S. sales of electric vehicles and plug-in hybrids have doubled to more than 600,000 in the past year, and sales figures show that electric vehicles have accounted for 6.6% of all cars sold in recent weeks as gasoline prices rose, according to Atlas Public Policy rise to its highest level in years.
But outside of California, there isn’t yet a network of chargers needed to power millions of electric vehicles. Environmentalists and auto analysts alike are calling it a “chicken-or-egg” problem and a hurdle to getting more Americans into electric vehicles.
While most EV charging occurs at home, in communities that don’t have many — or none — chargers, thousands of public outlets are needed to accommodate charging. Biden administration wants 500,000 public chargers by 2030; McKinsey & Co. estimates that up to 1.2 million will be needed.
So far there are around 93,000 public chargers in the US, most of which the government says take hours to recharge a car. Private investment has been neglected so far, in part because there aren’t enough EVs on the road for most charging stations to turn a profit.
Early internal combustion engine vehicles faced similar growing pains. Drivers initially bought fuel containers from pharmacies and hardware stores before gas stations and convenience stores emerged as the dominant way of fueling.
The challenge for states is that public funding for EV charging inherently helps shape early winners and losers in a new market. In Indiana, some critics have expressed concern that the state’s decision to give $5.5 million of VW funding to utility companies could help them expand their legacy electricity monopolies into new markets in the 21st century. State officials said the utilities could build the chargers on most priority streets and at a lower cost per site.
Scot Imus, executive director of the Indiana Food & Fuel Association, said gas stations wanted to enter the electric car market but wondered if they could compete fairly with the utilities they source electricity from. “It’s not a profitable opportunity for retailers right now,” said Mr. Imus.
Fast chargers, which recharge a battery in about 30 minutes, are particularly scarce in the US. While market leader Tesla has built a fast-charging network for its own drivers, there are fewer than 5,000 locations in the U.S. with 10,000 individual fast-charging devices that anyone can use, according to the government. Most current electric vehicles can only travel a few hundred kilometers before they need to be plugged in.
When New Hampshire first tried to spend VW money on fast charging along freeways in 2019, it found no takers. “They made so many demands on it that any reputable charging company said, ‘Well, we can’t do that,'” said Sam Evans-Brown, executive director of nonprofit advocacy group Clean Energy New Hampshire.
“It was a learning experience,” said Tim White, a superintendent in the New Hampshire Department of Environment’s Department of Air Resources. The state then implemented a more streamlined permitting process and is working on contracts for 35 sites, he said.
Illinois didn’t use any of the money. Gov. JB Pritzker, who has set a goal of having one million electric vehicles on the road by 2030, this month released revised plans for using idle VW funds, including spending $12.7 million on charging.
Mr Pritzker said his office inherited a lack of coordination on electric vehicles when he took office in 2019 and the state has a renewed focus on building chargers. “The idea of being a leader in electric vehicle charging is very important. And from my point of view we haven’t done enough,” he said.
In Texas, the state’s charger grant round had some companies grumbling about the process. “What determined who received these grants wasn’t a plan or thoughtful distribution,” said Tom Smith, executive director of the Texas Electric Transportation Resources Alliance, a group campaigning for greater electric vehicle adoption. “It was the bot speed.”
Shell made a typo in the email address and bounced its application, records show, but timestamps showing it had sent an email the moment the grant opened convinced the Texas officials that it was among the first to apply. Shell said it plans to invest in supercharging at many of its 13,000 branded retail locations across the US, but didn’t respond to a question about the Texas grants.
Texas officials defended the state’s process, saying the money is available statewide for such projects. “This process resulted in efficient grant allocation,” said a spokesman for the Texas Commission on Environmental Quality.