House Committee Discusses Electrification: Now or NEVI?

On Tuesday, April 30th, Chairman Rick Crawford (R-AR) convened the House Highways and Transit Subcommittee to hear testimony related to vehicle electrification. For the hearing, cleverly titled, “It’s Electric: A Review of Fleet Electrification Efforts,” the subcommittee welcomed four panelists covering different areas within electrification. These included electrification issues for passenger vehicles, trucking, transit, and service station energy provision, as well as broader energy issues.

Panelists included the following:

Ms. Kim Okafor, General Manager of Zero Emission Solutions, The Love’s Family of Companies; on behalf of NATSO, Representing America’s Travel Centers and Truckstops and SIGMA: America’s Leading Fuel Marketers (SIGMA)

Mr. Kevin Coggin, Executive Director, Coast Transit Authority; on behalf of the Community Transportation Association of America (CTAA)

Mr. Taki Darakos, Vice President of Vehicle Maintenance and Fleet Services, PITT OHIO, on behalf of the American Trucking Associations (ATA)

Mr. Nick Nigro, Founder, Atlas Public Policy

Within the Infrastructure Investment and Jobs Act (IIJA), the Biden Administration included programs to accelerate the adoption of electric vehicles (EVs) and charging infrastructure. Two of these programs discussed extensively throughout the hearing were the National Electric Vehicle Infrastructure Formula Program (NEVI) and the Low- or No-Emission Bus Grant Program. NEVI provides funding to states to deploy electric vehicle charging infrastructure while the Low- and No-Emission Bus Grant Program provides funding for transit agencies to purchase or lease – surprise – buses that produce little to no emissions (alternative fuels or electric).

Coupled with the programs above, the Biden Administration has also set goals for emissions reduction, aiming for a 50 to 52 percent reduction (from 2005 levels) in greenhouse gas (GHG) emissions by 2030 with the larger goal of reaching net zero emissions by 2050. Additionally, the Environmental Protection Agency (EPA) recently announced new pollution standards for various classes of vehicles in the coming years.

Overall, the Administration has aggressively pursued policies to cut emissions in the coming years with a heavy emphasis on electric vehicle growth. The IIJA provided billions of dollars for related initiatives, but the rollout has been less than seamless. For example, NEVI, injected with $5B in 2022, has led to the deployment of a mere eight charging stations so far. Beyond the logistical issues with federal funding rollout, EVs have received significant criticism as far as feasibility for a lot of Americans and businesses.

While there were outliers on each side of the conversation, and differing perspectives on severity of issues as well as solutions, members seemed largely in agreement on what the issues are for EVs. While issues for passenger EV adoption differ from problems faced by truckers and transit agencies, the conversation and Q&A throughout the hearing could be separated into a few different buckets: challenges and red tape in the NEVI process, EV Infrastructure and affordability, electric grid capacity, global competitiveness and critical minerals, and regional challenges and emergency response efforts.

NEVI Hurdles

There seemed to be resounding agreement in the hearing room that the NEVI program is taking too long in distributing funds for charger deployment. In his opening comments, Rep. Larsen (D-WA) mentioned the need to discuss ways to get NEVI funding out the door in a more effective manner and panelists echoed this sentiment. Kim Okafor provided a service station perspective on the NEVI program and cited the fragmented application process as a major obstacle. NEVI disburses funds to the state level to allow state departments of transportation (DOTs) or other state agencies to oversee the distribution process. Because the federal government has largely left program design to the states, applicants have to figure out how to navigate the application process in 52 different places rather than having a uniform process. Okafor described the process for the service station chain Love’s detailing that the company has aggressively pursued these opportunities and obtained $30M for 50 new service stations. But this process has not been easy – the company’s process is slowed each time in having to adjust to the state in question’s application process.

During the period for members’ questions, Rep. Yakym (R-IN) shared his frustration with Okafor on the topic. He jabbed at the program in saying, “… I suppose in one sense, NEVI has been bringing charging station online in a rapidly increasing pace in 2024 – there have been an additional 6 NEVI funded charging station placed in service thus far this year.” Rep. Yakym went on to describe some of the things he sees as issues in the program such as unworkable labor standards, confusing minimum operating standards, rigid mileage requirements which led to one state declining NEVI funds altogether, and other potential permitting and transmission issues. Okafor responded by discussing some of the specific challenges for Love’s like the lengthy bid to actual charger procurement phase and the difficulty in creating a harmonious charging network with fragmented processes from state to state.

EV Infrastructure and Affordability

Passenger, transit, and trucking shared affordability concerns related to electrification. For a passenger vehicle, Rep. Burchett (R-TN) cited a statistic on the average cost of an EV being $53,000. Nick Nigro pushed back on this stating that while it is a greater cost up front, the overall lifetime cost of an EV is lower than a traditional combustion engine vehicle for a many Americans (an added caveat for those without access to overnight charging). Regardless, as states continue to adjust fees related to EVs, such as adding registration fees to replace lost fuel taxes, EV ownership costs are still changing as well.

As one could imagine, the cost of purchasing an electric transit vehicle or tractor trailer can be very prohibitive. Kevin Coggin shared the transit perspective. For a 35-foot heavy bus, he outlined the cost for each: a diesel bus is approximately $670,000, a hybrid with a diesel engine is around $855,000, and a fully electric model is $1.15M. Coast Transit Authority has instead leaned into propane-fueled vehicles as a more cost-effective option with 27 percent of their fleet fueled in this way compared to one percent electric. The Low- and No-Emissions Program allows them to apply for funding for these alternatively fueled vehicles with a more economical cost share.

Darakos spoke to similar challenges in affordability for trucking with an additional impact of battery weight. The cost of an electric truck can be 2.5 to 3.5 times more than a traditional truck, excluding the cost to upgrade infrastructure as well. The heavier batteries, which his testimony states can range from 6,000 to 17,000 pounds, also impact the overall payload capacity of trucks, limiting the weight of product that a truck can legally carry. In some cases, this could mean deploying more trucks to carry the same amount of freight.

For passenger, transit, and trucking alike, the infrastructure costs required to create a network in which these vehicles can function is staggering – particularly on the front end. Coggin simplified the major costs in sharing that for the two electric buses within the fleet, Coast Transit Authority had to not only invest in a $135,000 charger, but the agency also had to upgrade their power supply for an additional $40,000. For trucking, according to Darakos, the transition to a fully electric fleet would require an additional 15,000 charging stations each month between now and 2032, and between charging infrastructure and needed utilities upgrades, the total cost would be nearly $1T.

Electric Capacity

An obvious challenge to electrification, which continues to be problematic under current electricity demands, is the overall capacity of the U.S. grid. While Nigor was quick to point out that most EVs will charge overnight when electric demand is not in peak periods, the impact of adding millions of EVs to an already struggling system will be a significant one. Chair Crawford referenced a Princeton study in his opening remarks which estimated that the U.S. will need a 3,360 percent increase in production by 2035 to meet demand for light-duty vehicles alone. The production challenges for utilities will persist for years to come with an added challenge of having to transmit electricity to more rural locations which can be very costly.

Global Competitiveness and Critical Minerals

There was acknowledgement that the U.S. is trailing other countries in the electric market. Rep. Brownley (D-CA) and others were quick to mention that Europe and China combined for more than 80 percent of new EV sales in 2023. As these countries, China in particular, continue to accelerate into this market, it could have major adverse impacts on U.S. automobile industry production. Impacts could range from stalled majufacturing and job loss to potential cyber and data security issues with high levels of foreign vehicle market penetration in the U.S.

While the hearing flowed with mostly agreement, there was some slightly heated conversation related to the ethical sourcing of materials for EVs. Rep Duarte (R-CA) engaged in an impassioned exchange over the mining of blue cobalt, referencing the current slave-like conditions under which it is extracted in the Democratic Republic of the Congo. Nigor responded by mentioning Tesla’s 60 percent reduction in cobalt use and growing membership of U.S. automobile manufacturers in the Initiative for Responsible Mining Assurance. Regardless, the discussion ended with Rep. Duarte mentioning planned legislation related to EV production which would require manufacturers to certify that unethical labor was not used in the production of vehicle materials as a prerequisite for any government subsidies.

Regional Challenges and Emergency Response Efforts

While vehicle technology and infrastructure are rapidly changing, numerous members and panelists mentioned the need for flexibility in adapting to climates and geographies. Because EV batteries can be affected by extreme temperatures, this vehicle option may not be as efficient in one location as another. In his testimony, Coggins mentioned the impacts of hurricanes to coastal regions and the possibility of losing access to electricity for prolonged periods of time. Conversely, some northern regions see freezing temperatures which also impact battery life. While EVs can be a viable option in many situations, many expressed the need for regions to find the technology and fleet mix most suitable to their conditions.

Although the hearing had a couple sharper exchanges, for a topic like electrification, there seemed to be more agreement than disagreement amongst members and panelists. At the conclusion of the hearing, panelists varied in their responses on whether or not they believe the Administration’s reduction and EV goals are feasible, but even those fully committed to the electrification cause seemed to acknowledge that rollout has not been as smooth as desired. Okafor repeatedly harped on the need for adoption to be a two-sided structure where consumers want to purchase the product. If consumers are not buying in, investment will lag. Additionally, a rushed rollout can do more harm than good if it is not planned effectively. Hurrying to lay out a charging infrastructure can result in deployments in undesirable locations, such as those without access to typical rest stop amenities. It is critical to plan effectively while minimizing red tape within the processes. In the final words of Rep. Maloy (R-UT), “… but a goal without a plan is just a wish. And a wish is not policy.”

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