Biden infrastructure plan proposes spending $174B to boost America’s EV market

President Joe Biden has earmarked $174 billion from his ambitious infrastructure plan to build out domestic supply chains for electric vehicles, noting the imperative for United States automakers to “compete globally” to win a larger share of the EV market.

The funds are just one part of Biden’s plan, which calls for an ambitious $2 trillion infrastructure investment across multiple sectors. The Fact Sheet for the plan includes six references to China — one of these in reference to the size of the Chinese EV market, which is two-thirds larger than the domestic U.S. market. Chinese manufacturer Foxconn, Apple’s main supplier, said in February it was considering producing EVs at its Wisconsin plants — just weeks after tentatively agreeing to manufacture an EV for startup-turned-SPAC Fisker.

To ensure Americans actually purchase these domestically manufactured EVs, Biden also plans to establish sales rebates and tax incentives for the purchase of American-made EVs, though the size of the credit has not been released. Customers can already cash in a $7,500 federal tax credit for EVs, but it is not available to automakers that have sold more than 200,000 electric cars — people looking to purchase a Tesla, for instance, would not qualify for the credit. It’s unclear whether the new tax credit would raise or abolish the sales limit for automakers.

Biden’s infrastructure plans could boost startups

The plan also proposes using some of the funds to build a national EV charging network of 500,000 stations by 2030. A recent survey from Consumer Reports found that the availability of public charging stations was a major concern deterring people from looking into an EV for their next vehicle purchase.

On the transit side, Biden’s administration said the funds will also go toward replacing 50,000 diesel transit vehicles and electrifying at least 20% of school buses, through a new program administered by the Environmental Protection Agency.

The plan places a huge emphasis on providing good-paying jobs to American workers, but it still has a long way to go. It must be approved by Congress before becoming law.