The Biden administration now requires EV chargers to be made in the U.S. using American steel to receive federal funding.
This is part of a plan to transition the country’s economy and develop a public charging network on highways.
Manufacturers say this could slow down the installation of chargers and push their prices up.
New rules about the manufacturing of electric vehicle chargers have been laid out last month in the United States as part of a wider plan to develop a public charging network along major highways across the country.
These rules also aim to favour American manufacturing since only chargers built in the U.S. using American steel and iron will be eligible to receive federal funding from a $7.5 billion fund set up specifically for this purpose.
This could make the installation of new charging stations profitable for manufacturers such as Tesla, which already builds all of its superchargers in Buffalo, New York, but not for most others.
Indeed, most major charging networks such as EV Go, ChargePoint, and Electrify America have their units manufactured in China or South Korea which means they won’t be able to get funding for future expansions of their network until they set up production facilities in America.
These companies warn that the country’s current production capacity is insufficient to support the demand for chargers on its own and that getting new factories up and running could take years, thus slowing down the rollout of new charging stations.
In addition, speeding up the process of moving manufacturing from Asia to the U.S. could make the price of each individual charger increase by 25 to 30%.
Furthermore, the government wants to add another requirement to have 55% of the price of components sourced from the U.S., but this has been pushed back to mid-2024 after manufacturers complained.
In spite of this, the administration says it is confident that the supply of chargers will be sufficient to meet the “limited” demand over the coming years while manufacturers work to move their production lines to America.
This program echo’s the Inflation Reduction Act which requires electric vehicles to be manufactured in the United States in order to qualify owners for tax credits.
Source: Reuters
