U.S. government makes up to $4.5 billion in loan guarantees available for EV infrastructure

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While a plentiful array of policies in Europe, the United States and Asia have contributed to the larger goal of transforming electricity systems away from fossil fuels to renewable energy, policy-makers have traditionally paid less attention to transformation of other sectors including transportation.

There are signs that this is changing. On Thursday the Obama Administration announced an array of initiatives to support electric vehicles (EVs) in the wake of a summit on transportation, led by a supplement to the U.S. Department of Energy’s title 17 loan guarantee program to include EV charging facilities, their hardware and software.

The White House states that this will unlock up to $4.5 billion in loan guarantees for innovating EV charging concepts. The Administration notes that such guarantees can be “an important tool to commercialize innovative technologies because these projects may be unable to obtain full commercial financing due to the perceived risks associated with technology that has never been deployed at commercial scale in the United States”.

The previous loan guarantees issued by the Obama Administration under the auspices of the American Recovery and Investment Act (“the stimulus”) in 2009 played an important role in kick-starting the large utility-scale solar sector in the United States. However, the failure of a few companies such as Solyndra which were funded with a minority of the total loan guarantee commitments overshadowed this critical role, largely due to copious ill-informed press coverage which failed to tell the larger story.

Other actions taken by the Obama Administration on Thursday include an act to identify zero emission and alternative fuel corridors, including EV charging across the country, a call for state and local governments to partner with the federal government to procure electric vehicle fleets at discounted value, and commitments by 35 utilities, businesses, non-profits and universities to provide EV charging access for their workforce.

These actions include partnerships between the Department of Energy and the Department of Transportation, two branches of the military and the Environmental Protection Agency, centered on a document of guiding principles to promote EVs and charging infrastructure.

The Administration notes that in the eight years that President Obama has been in office the number of plug-in EV models has increased from one to more than 20, battery costs have fallen 70%, and the number of EV charging stations has increased 40-fold to more than 16,000.

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