Electric Vehicle Policy in the United States: Trends and Legislation to Watch
by Lydia Stowe, FiscalNote
The latest electric car regulations, policies, news, and opportunities for government affairs teams interested in EV policy.
As the world continues to shift toward clean energy solutions, electric vehicles (EVs) are becoming an increasingly crucial element in the push for a sustainable future. Government affairs professionals must stay informed about the latest trends, opportunities, and risks in EV policy to ensure they are well-equipped to advocate for their organization's interests and contribute to the broader EV conversation.
Read on to explore the latest electric car regulations, policies, news, and opportunities for government affairs teams interested in EV policy.
Without policies and regulations, people will generally follow the status quo, which up until now has been the use of fossil fuel vehicles and occasionally updated technologies.Melissa Gipson, ESG and climate strategy associate
What is Electric Vehicle Policy?
Electric vehicle policy refers to the regulations and policies established by governments to encourage the adoption and use of electric vehicles. Such policies can include incentives like tax credits, rebates, and grants to make EVs more affordable, as well as requirements for automakers to increase production and improve their technology. Governments may also support the development of EV charging infrastructure, such as through tax incentives for businesses to install charging stations or funding for public charging networks.
Why are policies needed for electric vehicles?
“EV policy is needed to help provide a foundation to transition away from fossil fuel vehicles,” says Melissa Gipson, ESG and climate strategy associate at FiscalNote. “Without policies and regulations, people will generally follow the status quo, which up until now has been the use of fossil fuel vehicles and occasionally updated technologies.”
Government policies to promote electric vehicle adoption work in several ways. The upfront cost of electric vehicles is generally higher than their gasoline-powered counterparts. Government incentives such as tax credits and rebates can help make electric vehicles more affordable and accessible to a wider range of consumers.
“Policies can help motivate investment in EV companies and technologies,” Gipson says. “It is no secret that EV technology can be price-prohibitive, but EV policy tax incentives can help motivate the purchase of EVs for families and businesses, as well as motivate commercial land owners to build charging stations.”
The lack of charging infrastructure can be a major barrier to EV adoption. Government policies to promote electric vehicles support the development of charging infrastructure. Policies such as emissions regulations and fuel economy standards can also incentivize automakers to improve and produce more electric vehicles, which can ultimately drive down costs and increase the availability of EVs.
US Electric Vehicle Policy to Watch
“As more states plan to address climate change through legislation, they will continue to look to the strictest policies and model their regulations off of those,” Gipson says. “It is well known that California's green policies are far ahead of, and thus much more strict, than other states', much in the same way that the EU's policies are ahead of U.S. policies on a federal level.”
Gipson notes that similar to the EU becoming a model for U.S. policies, California is serving as a model for other states. The latter half of 2022 saw 17 states adopt California’s electric car mandate to varying degrees.
Many of the policies and regulations on the horizon will have impacts on a variety of industries. Here are some issues to watch in 2023 and beyond.
Inflation Reduction Act (IRA) and Infrastructure Investment and Jobs Act (IIJA)
The IRA was signed into law in 2022 and is the largest climate and energy investment package in U.S. history, providing $370 billion in funding to reduce carbon emissions. The IRA provides tax incentives for companies that cover a wide range of clean energy initiatives. “Companies producing products for charging stations can take advantage of incentives set forth by the IRA,” Gipson says.
The IIJA provides significant policy initiatives and funding for the transportation sector in the U.S. It gives $4 billion from 2022 to 2026 to develop electric vehicle infrastructure.
Stricter Emissions Regulations
The Biden administration's recent proposal to tighten greenhouse gas emissions standards has been met with opposition from Republicans in Congress. However, the stringent new rules could provide leverage for an overhaul of the federal permitting process, a top priority for the GOP. The Environmental Protection Agency's (EPA) proposal would avert nearly 10 billion tons of carbon dioxide emissions through 2055 and increase EV sales to two-thirds of all new car sales by 2032. Permitting overhaul legislation faltered in the 117th Congress despite bipartisan support, but the push for stricter emissions regulations has reignited interest in revisiting the issue.
Push for EV Charging Stations
The Biden administration aims to add 500,000 new EV charging stations nationwide by 2030, each of which will require various state and federal permits, including environmental impact statements. Keeping track of the required permits, as well as tax credit requirements, requires government affairs teams to watch federal, state, and local regulations to make sure they stay on top of the latest relevant developments.
“Tied into this push is a requirement that, in conjunction with the Build America, Buy America Act, manufactured products contain a minimum of 55 percent domestic content,” Gipson says. “This presents an opportunity not only for domestic manufacturers to move toward the production of EV charger components, but also a potential increase in skilled labor jobs.”
Balancing EV Adoption with Competing Demands
One key trend in electric vehicle policy is the push to make clean cars and trucks more accessible and affordable. The Biden administration's proposed vehicle emissions rule aims to boost clean vehicle production, but the century-old tax on new heavy-duty trucks could hinder progress toward climate goals. The 12 percent federal excise tax on the first sale of a highway-used heavy truck adds significant cost, and industry professionals have long advocated for its repeal.
Policymakers are balancing the need to encourage EV adoption while addressing concerns around affordability and infrastructure development. At least 47 states and Washington, D.C. offer incentives to support the deployment of EVs. This includes financial incentives for purchasing EVs or for chargers and other equipment.
States are also looking to balance EV adoption with replacing lost gas tax revenue through increased registration fees and road usage chargers, according to Lee Howell, manager of state relations at AAA. States including Iowa, Kentucky, Oklahoma, and Pennsylvania have enacted a per-kilowatt-hour tax on EV charging at public charging stations. “This is another way states are looking to make up for lost gas tax revenue to be used on infrastructure projects,” Howell explains.
Requirements on Critical Minerals & Battery Components
On April 18, final federal requirements on critical minerals and battery components went into effect, establishing applicable percentage thresholds for 2023 and beyond. These requirements aim to decrease reliance on foreign imports and increase domestic manufacturing. “AAA policy is aligned with this effort, calling on automakers to establish sustainable and responsible sourcing procedures for supply chain management and procurement of materials used for vehicle manufacturing,” says Devin Gladden, manager of federal relations at AAA.
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Top EV Bills of 2022
Who makes electric vehicles policy in the United States? EV policy is introduced at both the state and federal levels. More than 1,200 bills mentioning electric vehicles were introduced in 2022 at the state and federal level.
While bills were introduced by a number of states in 2022, the states with the most EV legislation introduced were New Jersey (139 bills), Minnesota (73 bills), Massachusetts (70 bills), and California (68 bills).
More than 1,200 bills mentioning electric vehicles were introduced in 2022, and some stood out with high amounts of attention from FiscalNote clients. Here are the bills introduced last year that the most clients were interested in:
1. US HR 7900: National Defense Authorization Act for Fiscal Year 2023
The DOD electric vehicle charging policy authorizes the Department of Defense to furnish electric vehicle charging stations at commissary stores and military exchanges. The NDA also requires the DOD to carry out a pilot program to facilitate the transition of certain nontactical vehicles to electric vehicles.
2. MD SB 528: Climate Solutions Now Act of 2022
Enacted in April 2022, this bill requires the state to reduce its greenhouse gas emissions by setting a net-zero goal, improving energy efficiency in certain buildings, and establishing certain zero-emission vehicle requirements for the state fleet. The bill also establishes a pilot program for electric school buses and requires electric companies to increase their annual energy savings.
3. MA H 5374: An Act Relating to Economic Growth and Relief for the Commonwealth
This enacted bill allocates $100 million to support the adoption of electric vehicles, as well as the creation and expansion of electric vehicle charging infrastructure.
Electric Vehicle Policy Trends & Opportunities
EV policy impacts more than just the auto and energy industries — a wide variety of industries and organizations are indirectly related to this issue and have the chance to seize opportunities. For instance, the result of more electric vehicles and charging stations will require the U.S. to ramp up its mining activities for minerals such as lithium, cobalt, and nickel. Additionally, the electric transmission grid will need to be expanded by 60 percent by 2030 to take on these EVs, according to Energy Department data.
Government affairs teams have a unique opportunity to influence electric vehicle policy and help shape the future of transportation and their industries. For example, the debate over the federal excise tax on heavy trucks presents a chance for government affairs teams to engage with lawmakers and industry professionals to find a solution that supports the transition to clean vehicles while minimizing the financial burden on the trucking industry.
“I see opportunities for federal investment in new EV technologies through grants and other means,” Gipson says. “EV technology is constantly improving and further innovation to not only produce even greener vehicles but also motivate the general public to adopt EVs.”
Additionally, the IRA presents numerous opportunities for manufacturers to take advantage of its incentives. “Production of EV components and charging stations present an opportunity for companies to take advantage of the subsidies the IRA set forth and potentially even expand their US operations,” Gipson says.
Track EV Policy & Drive Innovation with FiscalNote
As electric vehicle policy continues to evolve, government affairs teams must stay informed about the latest developments to ensure they’re well-positioned to protect their organization's interests. FiscalNote offers a comprehensive, AI-driven solution for tracking policy changes at the global, federal, state, and local level.
With FiscalNote, your team can stay informed about the latest legislation that could impact your organization and be proactively alerted to EV legislation and regulation. By leveraging FiscalNote's powerful tools, teams are empowered to monitor EV developments and take proactive steps to influence the direction of this critical industry.
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