The NEVI Formula Program, established as part of the Inflation Reduction Act, provided $5 billion in funding that states could use to build EV charging infrastructure if certain conditions were met. In February, the DOT suspended the program, and rescinded prior approval of states’ spending plans. In June, a federal judge temporarily blocked the US administration from withholding funds awarded to 14 states. In August, the DOT issued revised guidance which appears to clear the way for some or all of the NEVI Formula projects in the pipeline to proceed.
What happens now? It will take some time, and some work by regulators and lawyers, to answer that question. The only thing we can say for certain is that what’s going on is the opposite of the clear and consistent government policy that everyone agrees is necessary to support EV adoption (or any new technology that governments actually want to encourage).
We asked Arcady Sosinov, the founder of FreeWire and the new CEO of Tritium, to make an educated prediction about the future of NEVI. (Watch for my in-depth interview with Mr. Sosinov in the next print issue of Charged.)
“I think the real answer is that we don’t know yet,” Sosinov told Charged. “But put yourself in the shoes of network operators or retailers who won NEVI funding a couple of years ago. They spun up a small team to try to capture some NEVI dollars, they won some funding, they got some handshakes and some pats on the back. Now the team’s been disbanded. Those people went back to doing their regular jobs or moved on. Likewise, the network operators, some of which were very small, and were banking on capturing a lot of grant funding to grow their business, a lot of them don’t exist anymore. So there’s a lot of projects issued to companies that no longer exist. We’ve seen a lot of that.”
Margo Oge is the former Director of the EPA’s Office of Transportation and Air Quality, author of the book Driving the Future, and a dedicated activist for clean air. We asked her how she thought things might shake out. “The pause from DOT last February was very disappointing,” she told us. “It forced all states to stop obligating funds, even if they were ready to proceed. This delay came at a critical time, potentially raising costs as companies and states were moving forward to build. I hope the new guidance will allow many NEVI projects to proceed. However, we may see uneven progress—some states moving ahead, while others lag or even cancel.”
Sosinov also predicts delays and increased costs for taxpayers and companies: “There are some network operators that will continue those projects, but it’s not going to be fast. In most cases, they now need to submit new permits, new drawings…they probably need to go back to some of the site hosts and sign new lease agreements.”
As I’ve written so many times, the electric genie isn’t going back into its bottle. The administration may have kneecapped NEVI, but the nationwide rollout of EV charging infrastructure has continued.
“There’s just over a hundred NEVI-funded sites that are now live,” Sosinov told us. “But, while those hundred sites have gone live, we’ve had a thousand others that went live privately funded.”
Does this mean we no longer need the NEVI funding? Have we reached the point where the industry can finance charging infrastructure on its own, without government support?
“Despite private investment, government support is absolutely vital to ensure access to charging,” Margo Oge told us.
“I’m going to take the contrarian position, and say that NEVI should have stayed dead,” said Sosinov. “It created market distortions, and personally, it led to Tritium’s downfall. [The company won a lot of NEVI contracts, invested heavily, and got into financial trouble when the program collapsed. Tritium has since been resurrected, with Sosinov at the helm.] I worry that it’s going to create another market distortion, and the industry does not need any more of that. We need consolidation to happen, and I worry that this is only going to get in the way of that and cause another few years of turmoil.”