Engines

---

The electric vehicle revolution got a boost in the United States last week, as President Joe Biden’s infrastructure bill came one step closer to fruition.

A bipartisan group of US Senators agreed to $1.2Trn in infrastructure spending over the next eight years and $7.5Bn of that sum would be dedicated to building a nationwide network of EV charging stations. The bill also sets aside a further $7.5Bn to help electrify buses around the country. The vast majority of the spending would go toward building or repairing existing roads, highways and bridges and propping up passenger rail and Amtrak.

“It’s a big deal,” Biden said in the White House Rose Garden. “We’re in a race with China for the 21st century. We have to move, and move fast.” Biden was quick to acknowledge that neither political party got everything it wanted. Specifically, to curry Republican favor, Democrats had to scale back Biden’s initial infrastructure proposal by a trillion dollars. Biden originally earmarked $174Bn to build 500,000 charging stations by 2030. The new bill eliminates a proposed $100Bn in direct EV subsidies that would have given consumers who are purchasing new EVs cash back at the point of sale.

Biden floated the idea of raising the federal EV tax credit from $7,500 to $12,500 for vehicles that were fully manufactured in the US. He also had hoped to restore tax credits for EV makers that have already sold more than 200,000 qualifying vehicles and thus have been phased out of tax credits. “That’s what it means to compromise,” Biden said in the Rose Garden.

This will come as a disappointment for carmakers like Tesla and General Motors, which have already been phased out of tax credits, or for others that are on a trajectory to reach that threshold soon. Recently we’ve seen Ford introduce its new electric Mustang and F-150 models with an eye on nudging its consumer base toward e-mobility. Last week Audi revealed that it plans to build its last internal combustion engine by this decade’s halfway point. Thereafter it will transition to manufacturing EVs exclusively [While also calling for a halt to planned bans of ICE technology – Ed]. A nationwide charging network is imperative if these carmakers’ EV strategies are going to be successful in the US. Bigger tax credits that last longer would also be helpful to expedite the transition.The good news for this camp is that direct EV subsidies aren’t dead in the water. Democrats still plan to pass them with a separate partisan bill through the reconciliation process. The bad news is that none of this may materialize, including the bipartisan bill, given the dysfunction of Washington and the bitter party politics that surface anytime a major piece of legislation is working through Congress.

The day after Biden celebrated with Democrats and Republicans at the White House, those same Republicans vented to the press that they were furious at the president for also endorsing a separate infrastructure plan that has only partisan support. They said it was two-faced to back two horses and thus undermine the bipartisan effort. Biden’s team responded that supporting both plans had always been Biden’s intention. He said, she said. Welcome to Washington. The Republicans who came to the White House stopped short of pulling their support for the bipartisan bill. That’s a victory, for now.