President Biden late Wednesday unveiled a massive infrastructure investment plan that will likely dominate political debate in Washington for months. It includes many provisions that would affect drivers and car shoppers.
Key Points:
- $115 billion to repair crumbling highways, roads, and bridges – which, according to the American Society of Civil Engineers, cost the average driver $1,000 per year out of their own pocket.
- $174 billion to build electric vehicle (EV) charging stations, promote a domestic supply chain for EV parts and batteries, electrify school buses, and electrify the federal fleet. Yes, this includes those cute future mail trucks.
- A plan to give consumers a federal tax rebate included in the transaction when they buy an EV. It would replace the current system, which allows buyers to claim a $7,500 rebate the next time they file taxes after buying an EV. This rebate would apply only to EVs built in the U.S. That represents a major change for the auto industry, which builds many EVs overseas and imports them for sale here.
- $100 billion to move the electric grid toward cleaner energy, which will increasingly become America’s motor fuel as we move toward EVs. We expect automakers to have more than 100 EVs for sale by the end of 2021.
- $300 billion to help American manufacturing, which includes money set aside to promote domestic production of microchips, as the auto industry faces a massive chip shortage.
- $35 billion for research on “climate moonshot” technologies that could drastically change the way Americans use energy. This budget would likely result in funding for investigating advanced battery technologies, which could revolutionize EVs. Though we should note, Toyota may unveil a battery nearly twice as efficient as current technologies later this year. Many other automakers also have similar research projects underway.
The proposal is just the start of negotiations over the package. We may see items added or removed over the next several months as the debate over the package evolves.
The plan would build 500,000 EV charging stations by 2030. The New York Times reports that there are currently about 41,000 – compared to “well over 100,000 gas stations.”
Cash for Clunkers Component Not Part of Bill
Some in Congress have pushed to include an “electric cash for clunkers” program. It’s an update of a 2009 program that helped Americans replace some of the oldest and least-efficient cars on the road. This new edition would help Americans pay for replacing their gasoline-powered cars with EVs. That proposal has the support of Senate Minority Leader Chuck Schumer (D-N.Y.) but is not part of Biden’s request.
We will keep you updated on the progress of the legislation as it affects car owners and shoppers. But be prepared for a long haul. Though the Biden administration managed to pass a COVID-19 relief package within its first two months in office, analysts warn that an infrastructure plan could take longer.
