States in battery belt lack EV purchase incentives

In the nation's emerging electric vehicle and battery assembly belt, residents have little incentive to buy the cars many of them will help build.

Southern states that have become recipients of some of the biggest EV and battery investments lag in policies that encourage EV adoption.

Georgia is one of the top recipients, attracting $22 billion in EV-related investments from Hyundai Motor Co., Rivian, SK On and LG Energy Solution during the term of the Biden administration, according to White House data. The $5.5 billion Hyundai investment in EV and battery factories near Savannah will employ about 8,000 workers. But the state ranked second-to-last on a list of 32 states and the District of Columbia in the American Council for an Energy-Efficient Economy's State Transportation Electrification Scorecard, which evaluated state agencies' progress in implementing policies to scale deployment of EVs and build charging infrastructure. Eighteen states didn't have enough policies to be officially ranked.

"The so-called flyover places are precisely where the average American is not buying electric vehicles," said Jonathan Smoke, chief economist at Cox Automotive. "We will not get to 30 percent, 40 percent, 50 percent [EV share] if the average American is not considering an electric vehicle. And charging infrastructure is absolutely key to that."

Several automakers say they will sell only zero-emission vehicles by 2035, and the Biden administration is targeting 50 percent of all new vehicle sales to be electric by 2030.
States with low EV adoption face a chicken-and-egg predicament, Smoke said. Charging infrastructure's return on investment is uncertain without EV volume, and without adequate charging options, consumers are unlikely to buy EVs.

EVs made up 7 percent of U.S. light-vehicle registrations through April, according to Experian, up from 4.4 percent a year earlier.

As automakers and battery makers rush to build factories for EVs and EV-related components, most of the states that will be home to those plants are falling short when it comes to planning for EVs, offering consumer incentives and installing charging infrastructure that would encourage their residents to buy EVs, the council said.

It's not for a lack of funds.
EVAdoption said no states have awarded charging sites funded by the National Electric Vehicle Infrastructure Formula Program with Ohio likely the first to announce on July 17. As of late June, four states closed application submissions. Three had the applications open. Fourteen states announced tentative or broad timing to open their applications this summer or fall.

But the funds are becoming available. An estimated $23.7 billion of capital has been announced for public charging infrastructure through 2030, including from private firms, the public sector and electric utilities, according to a report by the U.S. Department of Energy's National Renewable Energy Laboratory published last month.

President Joe Biden aims to build a national network of 500,000 public chargers by 2030. The country had 140,005 public charging ports at 54,078 stations unevenly distributed across the U.S. as of June 30, according to Energy Department data. Most are along the West Coast and in the Northeast. Several large metropolitan areas, such as Atlanta, also have started to build extensive public charging networks.

At 3.5 fast chargers per 100,000 people, Georgia has installed a higher-than-average number of fast chargers per capita, the council said. But the state could encourage EV adoption by developing a comprehensive EV plan with vehicle sales volume and charging infrastructure targets, adjusting EV registration fees to be more in line with taxes and fees for gasoline vehicles, offering more incentives for EV purchases and instituting policies to reduce emissions statewide, Peter Huether, lead author and senior research associate at the American Council for an Energy-Efficient Economy, wrote in the report.

Other states that have received high-profile battery and EV manufacturing investments, such as South Carolina, Kentucky and Tennessee, lack policies to encourage EV adoption. Ford and SK On say they are spending $11.4 billion at two sites for EV and battery production. One project would create to 6,000 jobs in Stanton, Tenn., and another would generate 5,000 positions in Glendale, Ky.

Tennessee ranked No. 23, earning 27 out of 100 points. Tennessee has received $13 billion in EV investments from General Motors, Ford and others, according to the White House.

Tennessee is a leader in grid preparation for EVs, the council said. It is one of eight states to run a vehicle-to-grid pilot program, and it subsidizes EV and battery manufacturing companies to encourage them to build in the state. Still, Tennessee lacks incentives for consumers to purchase EVs that the state builds.

South Carolina, which has received $10 billion in EV investment from Volkswagen, BMW, Mercedes-Benz and others, and Kentucky, which has received $10 billion in EV investments from Ford, SK On and AESC, fell below the level required to be included in the ranking. South Carolina earned 14 of the 100 points available. Kentucky earned 5.5. California, at the top of the list, earned 88.

"I definitely think that the southern states, or the states that are receiving a lot of this new investment, are missing out," Huether said. "It would be great if the drivers in those states could actually drive the vehicles that are being manufactured there."

But it's not just southern states failing to provide support for the vehicles they are building.
Michigan, one of the top EV investment recipients outside of the southern battery belt, has received $19 billion in EV investment from GM, Ford and several battery companies and ranked 26th on the list. The state aims to operate a zero-emission light-duty vehicle fleet by 2035 and a zero-emission medium- and heavy-duty vehicle fleet by 2045. But the state offers no incentives for EV purchases. The council recommends Michigan adopt the Advanced Clean Cars II and Advanced Clean Trucks programs to accelerate the transition to EVs.

The top 10 scorers were California, New York, Colorado, Massachusetts, Vermont, Washington, New Jersey, District of Columbia, Oregon and Maryland. Six of them have adopted Advanced Clean Cars II, California's light-duty zero-emissions vehicle sales mandate that requires 100 percent sales of zero-emissions vehicles by 2035, and Advanced Clean Trucks, a California policy that requires certain portions of heavy-duty vehicle sales to be zero emission by 2035, depending on vehicle class.

But even those states aren't ready for an influx of EVs, said economist Patrick Anderson.

"I can't identify a single state that is now ready for a mass adoption of EVs, not even California," said Anderson, CEO of Anderson Economic Group. "Most states have a woefully inadequate charging infrastructure for electric vehicles. Some areas in some states have a barely adequate charging infrastructure for some electric vehicles."

"We need to do much, much more to make it possible for people to rely upon electric vehicles," Anderson said. "The states that have affluent metropolitan areas … generally have much better charging availability than the vast portion of the United States."

Factory towns typically have little in common with affluent metros. But regardless of state policy around EVs, automaker and federal targets will eventually expand EV sales volume everywhere, Huether said.

"EVs are going to be on the road in these states … obviously at a slower rate the less they do. But they will eventually come," Huether said. "They should be at the very least planning for it and initiating those processes."