The Electric Drive Vehicle Deployment Act of 2010, introduced in Congress this week, has a simple goal to electrify half of all cars and trucks on U.S. roads by 2030, and a basic strategy: focus the might of the federal government on a small number of pilot communities around the country, subsidizing the buildout of charging infrastructure and purchase of electric vehicles.
But when it comes to implementing that strategy, the legislation (which is now up for debate in two slightly different versions proposed in the House and the Senate, H.R. 5442 and S. 3442, respectively) gets somewhat more complicated. Here are 10 things you should know about a pair of proposals that could play a big role in how the nascent electric vehicle market takes shape over the next 20 years:
How much will the legislation cost?
The Senate bill is estimated to have an overall cost of $7-$10 billion over five years. The House bill is estimated to cost about $11 billion over five years.
Where would the funding come from?
The House version calls for regional governments to sell $100 million in bonds to help fund the infrastructure buildout. Other funding sources are unclear or yet to be determined.
Who would hold the purse strings?
The Department of Energy. The House bill calls for the Secretary of Energy to award $800 million-$1 billion (through a competitive application process) to five cities or transportation corridors, including at least one focused on heavy-duty electric vehicles. The Senate bill calls for the DOE to award $250 million in grants for up to 15 communities.
What’s the timeline?
Under the House bill, qualifying criteria for pilot communities would be released within 120 days and communities would be selected within a year of the bill’s enactment.
What’s in it for consumers?
- House: The first 100,000 consumers purchasing EVs in each of the five chosen pilot communities could get rebates or other incentives of at least $2,000 per car, and up to a $2,000 tax credit on the purchase and installation of charging equipment. (Businesses could get up to a $50,000 credit for purchase and installation of multiple charging stations.)
- Senate: The current $7,500 tax credit for electric vehicles would be expanded to include medium- and heavy-duty hybrid vehicles, such as pickup trucks, commercial trucks and SUVs. Residents of pilot communities would be eligible for rebates of up to $10,000 on an electric vehicle at the point of sale.
Who’s behind the legislation?
Sponsors of the legislation include Reps. Ed Markey (D-Mass.) and Judy Biggert, (R-Ill.), and Sens. Byron Dorgan (D-N.D.), Lamar Alexandar (R-Tenn.) and Jeff Merkeley (D-Ore.)
The Electrification Coalition, a group that includes venture capitalist Ray Lane, utility chiefs and executives from companies working on charging equipment, batteries, smart charging and electric vehicles, called for the creation of EV deployment hubs in an extensive policy paper late last year. The legislation unveiled this week bears similarities to that plan, and the group, which set out to sway U.S. policy, has issued strong praise for the proposals now working their way through Congress. Coalition members include A123 Systems (s AONE), AeroVironment (s AVAV), Bright Automotive, Coda Automotive, Coulomb Technologies, Cisco (s CSCO), FedEx (S fdx), GridPoint, Nissan (s nsany), NRG Energy (s nrg), PG&E (s PCG) and others.
Who has come out against the proposal?
The Alliance of Automobile Manufacturers, a trade group that represents 11 automakers including General Motors (s GM), Chrysler, Ford (s F) and Toyota (s TM), said the legislation “risks resulting in federal resources becoming overly concentrated in a small number of communities, which could establish electric cars as boutique vehicles….Electric cars and their infrastructure should be available to everyone nationwide, not just people in select communities.”
How might this affect utilities, and your utility bill?
Utilities would be directed to evaluate potential deployment rates for plug-in vehicles in their service areas, as well as what it would mean for their transmission and distribution infrastructure. The Natural Resources Defense Council explains utilities and utility regulators would also be “encouraged to design programs that support plug-in vehicles use through infrastructure planning and ensuring interoperability between grid systems and vehicles.” The Hill reports that the legislation would allow cities and power providers in pilot communities “to issue bonds at preferential rates to purchase electric drive vehicle charging stations.”
Who stands to benefit?
- Infrastructure providers: Consumers and businesses would get money to set up charging stations. Legislation would extend through 2017 an existing tax credit for charging equipment installations, and increase it to 50 percent of the purchase cost for the equipment, up from 30 percent today.
- Electric car makers: Legislation would subsidize early adoption of electric vehicles. The current limit of 200,000 vehicles per manufacturer on tax credits for electric car purchases would be raised to 300,000 vehicles and extended to 2016.
- The 5-15 selected pilot communities receiving up to $800 million in federal grants.
- Battery innovators: The Senate version proposes $1.5 billion for research aimed at delivering a battery that can go 500 miles on a single charge. The Senate also proposes establishing a $10 million prize for whoever delivers a commercially viable battery with those specs.
- Hydrogen fuel-cell vehicle developers: The House version of the bill includes funding to incentivize these cars, although not the infrastructure for them.
How would pilot communities by selected?
According to a draft of the House bill, the Secretary of Energy would choose the communities based on criteria including the level of cost sharing they propose for grant projects, whether plans are in place for deploying public charging infrastructure and updating building codes, solid partnerships with a range of stakeholders and assurances that equipment will employ open standards.
EV World reports that other important factors under consideration would include how much greenhouse gas emissions would be prevented through the project, what additional state and local incentives are in place, proximity to other communities where EVs and infrastructure could be deployed and how the program will inform efforts to roll EVs out nationwide.
For more on electric vehicles and charging infrastructure, check out these articles on GigaOM Pro (subscription required):