The U.S. is not investing enough money in its electric vehicle charging infrastructure, and it's contributing to American drivers' range anxiety, a major hindrance to consumers adopting EVs en masse, according to a report issued by UP.Labs, the transportation and mobility division of venture capital firm UP.Partners.
Historically, the cost of EVs has been the main reason many Americans have avoided them. Internal combustion engine and full battery-electric vehicles are now reaching price parity, but that could change because battery costs rose significantly in 2022, said UP.Partners, which has invested in companies that have partnerships with Toyota and Porsche.
The Santa Monica, Calif., venture capital firm's 123-page "The Moving World Report: 2023 Macro and Micro Trends in Mobility" covers the automotive, aviation, logistics and e-bike sectors.
When it comes to EVs, a shortage of raw materials, ongoing global supply chain turmoil and an overloaded electric grid are other reasons they may not catch on with American drivers in the coming years.
Citing research from venture capital firm Energy Innovation Capital, GridLab and the University of California, Berkeley, UP.Labs noted the U.S. will have to invest $6.5 billion annually in charging infrastructure for the next 30 years to adequately charge EVs that are expected to be purchased by consumers over the next decade.
"It is necessary to have public networks of charging outlets, chargers available at home and work, and access to fast-charging options for longer trips" the report's authors noted. "Without these options, EV adoption will be limited moving forward."
In 2022, Congress and the Biden administration made a one-time allocation of $5 billion toward building and financing U.S. EV charging infrastructure. The funding was wrapped into the $1 trillion Infrastructure Investment and Jobs Act, Biden signed in 2021.
The build-out of fast charging EV stations is happening in the U.S. but not fast enough, compared with China, the world's second-largest auto market. From 2021 to 2022, fast charging stations grew by 26 percent in the U.S., but their availability in China increased by 84 percent.
On the emissions front, the mobility sector's future net-zero carbon emissions goals are a "fantasy" unless "radical innovation is unlocked" by companies along with decisive climate change-related policy from world governments, the report said. Accounting for the climate commitments already announced, mobility-related emissions are likely to increase 11 percent by the end of the decade. These emissions need to be reduced by more than 20 percent if the world wants a realistic shot at reaching net zero in the mobility sector by 2050, it said.