Washington – The Biden administration is asking for a waiver of “Buy American” rules for federally funded electric vehicle chargers to more quickly deploy the infrastructure needed to ramp up the adoption of electric vehicles.
National content rules state that 100% of steel, iron, and manufactured goods made primarily of steel and iron in federal highway projects must be made in the United States.
But only a few companies can build fast EV chargers that would meet the requirements, according to a filing submitted Wednesday by the Federal Highway Administration.
The agency argued that forcing companies to follow the rules would dramatically slow the rollout of the Chargers as officials prepare to hand out $5 billion for the Chargers over the next five years under the bipartisan law on infrastructure.
“The immediate application of all applicable domestic content preferences to these projects would be inconsistent with the public interest,” the agency wrote. “This will likely delay the immediate implementation (of funding) of EV chargers, which are a key strategy to reduce greenhouse gas emissions.”
The request illustrates the tension between the administration’s interests in rapidly decarbonizing the economy and relocating manufacturing.
President Joe Biden has long promised to create millions of well-paying jobs by advancing clean energy and other climate-related goals. But supply chains for critical green technology components — from minerals in batteries to microchips in cars and electronics — aren’t always reliably based in the United States or with allies.
The Infrastructure Act aimed to create a nationwide network of EV chargers along highways to reduce “range anxiety,” in which consumers stick to gas-powered cars because they fear they won’t. not be able to travel long distances in an EV. Automotive experts say this is one of the main obstacles to the adoption of electric vehicles.
The law requires most of that funding to go to DC Fast chargers, which most closely mimic the experience of stopping at a gas station by charging an EV to 80% in about 30 minutes.
Thirteen companies told FHWA they could build chargers that met the requirements, but only three — ChargePoint, FreeWire Technologies Inc., and Rhombus — said they could build fast chargers. Industry experts have said demand for chargers already outstrips supply and funding for the national charging network will only exacerbate that.
Instead, the FHWA, an agency of the Department of Transportation, proposed weakened U.S. purchase requirements that would escalate over time.
Under the proposal, all chargers installed in 2022 would receive a full waiver of domestic sourcing requirements. For the first half of 2023, only chargers with final assembly in the United States would be eligible. In the second half of 2023, the only eligible chargers would have at least 25% US-made components making up the total cost. By January 2024, this threshold would increase to 55%.
This approach would “strongly incentivize” companies to move quickly to domestic manufacturing, according to the agency’s filing. “We seek to maximize the use of American-made products and materials while ensuring the successful and timely delivery of these critical electric vehicle infrastructure projects.”
Several advocacy groups, including the Zero Emission Transportation Association, Electrify America and the American Association of State Highway and Transportation Officials have also backed a phased approach.
Lack of reliable, easy-to-access charging is one of the biggest barriers to buying an electric vehicle, said Mike Ramsey, transportation and mobility analyst for Gartner Inc.
“It’s important that the chargers are secure now,” he said by email. “In the longer term, it would be good for America to source more vital equipment from the United States or from close trading partners.”
Federal law permits deviation from the Buy American rules only when their application would be inconsistent with the public interest or when the quantity or quality of the product available in the United States is insufficient.
These types of requirements often have “short-term unintended consequences and this is one of them,” Ramsey said. “I expect a waiver will be granted because as the administration seeks to create industrial policy, supply chains cannot be created overnight.”
The FHWA is inviting comments on the proposed rules until September 30.