As was the case in 2021, electric vehicles (EVs) were among the top focal areas for state legislatures in 2022. In total, state legislatures considered at least pieces of legislation related to electric vehicles last year. While a focus on electric vehicle policies has simply continued a trend from recent years, new patterns continue to emerge as states broaden the policy landscape around EVs and begin targeting additional opportunities to spur EV adoption.
Responding to New Federal Funding
As federal funding rolls in from the IIJA’s NEVI program, which provided $7.5 billion to help states build out EV charging networks and incentivize a transition to electric vehicles, states have also begun working to leverage this funding to further support EVs and EV infrastructure development. States were required to submit plans for their use of NEVI funds to the U.S. Department of Transportation by Aug. 31, 2022. Several pieces of legislation, like West Virginia H.B. 4797, helped direct the planning process or supported these plans with funding and related EV infrastructure programs.
States are increasingly creating dedicated public funding sources and taking other measures to expand EV infrastructure. Some of these bills are explicitly designed to supplement or provide matching funds for federal NEVI funding. Several states, like Kentucky (H.B. 241), appropriated funding for fiscal years 2022-2023 specifically providing matching funds for federal EV charging programs under the IIJA. Massachusetts H.B. 5151 makes at least $50 million available for a program to support EVs and help fund public alternative fuel and electric vehicle charging infrastructure. The legislation also includes language allowing funds to be used as matching funds for the federal IIJA program and its transportation electrification programs.
Others do not specifically mention incoming federal funds but clearly aim to leverage external funds to support EV and EVSE expansion. For example, West Virginia H.B. 4797 requires the state Department of Economic Development to create an Electric Vehicle Infrastructure Deployment Plan that describes how the state intends to use its share of NEVI program funds, considering the future charging needs of school systems, public transportation, local governments and other users.
The IIJA also created a Clean School Bus program that will provide grants to states for EV and other zero-emission school buses. Following this, Colorado legislators created an Electrifying School Buses Grant Program by enacting S.B. 193, which provides funds to schools for the purchase of electric school buses and associated charging infrastructure. Eligible projects include the purchase and maintenance of electric school buses, the conversion of fossil-fuel powered school buses to electric buses, the purchase and installation of charging infrastructure and electrical upgrades to support associated charging infrastructure.
Maryland H.B. 1392 created a Medium-Duty and Heavy-Duty Zero-Emission Vehicle Grant Program for certain vehicles and equipment, which can help transition buses, delivery and similar work fleets to EVs. California S.B. 372 also established a Medium- and Heavy-Duty Zero-Emission Vehicle Fleet Purchasing Assistance Program to make financing and nonfinancial supports available to operators of medium- and heavy-duty vehicle fleets to transition to zero-emission vehicles like EVs. Washington H.B. 1644 allows the transportation vehicle fund to be used for feasibility planning and fueling station infrastructure to serve electric and other “clean pupil transportation vehicles.” This would help school districts plan for a transition to electric school buses. New Jersey also enacted a bill (A.B. 1282) to create a new electric school bus program, administered by the state Department of Environmental Protection, that will provide $15 million per year in grants for EV school buses.
EV Incentives and EV Accessibility
On the individual passenger vehicle side, Maryland’s H.B. 1392 also decreased the maximum purchase price for certain EVs from $63,000 to $50,000 for the purpose of receiving the state’s excise tax credit. This brings the state’s cap more in line with the EV tax incentives offered through the federal Inflation Reduction Act (IRA). Massachusetts H.B. 4515 is a broad decarbonization bill but contains a new $5,000 rebate for electric vehicle purchases, with an additional $1,500 available to low-income individuals, and additional rates for medium- and heavy-duty vehicles. At this stage, nearly every state offers some form of electric vehicle incentives to help offset costs for people who purchase EVs. This may explain a relative downturn in the pace of new legislation creating EV incentives, as many states that already have them may be allowing state agencies to modify existing programs.
As states look to address EV infrastructure challenges that might slow EV adoption, some legislation around electric vehicle supply equipment (EVSE)—a common term for EV chargers—was designed to make it easier for individuals and businesses to install EVSE for public use and encourage private investments, or otherwise ensuring that newly developed charging infrastructure is available and accessible to as many people as possible. A few different approaches have been taken, including direct grants, loans and financing measures, and regulatory requirements or exemptions. Connecticut, for example, enacted S.B. 93 to include EVSE and other investments in the state C-PACE program, opening up a financing option for commercial property owners who want to install EVSE on their properties. With H.B. 1221, Indiana built on a trend from recent years by exempting public EV charging providers from being regulated as utilities, while also allowing people who offer public EVSE to charge for the electricity used or the time spent charging. Washington S.B. 5192 was broadly designed to support EVSE deployment, allowing EVSE owners and operators to charge for their use.
On the regulatory front, Washington S.B. 5192 also requires the development of new regulations governing payment methods, interoperability requirements and other standards. Delaware S.B. 187 requires certain local governments to develop a way for residents to obtain permission to install EVSE on residentially zoned property that abuts a residential street, and prohibits certain rules that would unduly restrict EVSE installation. Illinois S.B. 2940 requires the state PUC to ensure, when approving utilities’ beneficial electrification plans, that these plans address how to increase the number of public DC fast chargers, also known as Level 3 EVSE.
The federal NEVI program requires that federally funded EV stations meet certain reliability and uptime standards. For example, EVSE funded through the NEVI program must be operational and in proper working order at least 97% of the time—a standard some charging operators still struggle to meet consistently; several states have begun to enact or consider legislation requiring the same of state-funded projects. Aside from ensuring that new stations are reliable, state requirements could help state-funded EVSE projects access and leverage federal NEVI funds. For example, California A.B. 2061 and New York S.B. 9204 (pending, 2022) both include station monitoring and reporting requirements, while New Jersey S.B. 3102 sets a more specific 95% uptime standard.
Fleets and Heavy-Duty Vehicles
While several bills aim to incentivize residents and businesses to purchase electric vehicles—one of the trends that has continued from past years—states increasingly considered legislation in 2022 to help convert larger public and private vehicle fleets to EVs. Because public agencies and private fleets can account for large numbers of vehicles, some states are looking to leverage this scale to reduce emissions and support broader EV adoption.
States are continuing to enact and revise incentives for electric vehicle purchases, with a growing focus on heavy-duty or state-owned vehicles. For example, at least three states—Connecticut (S.B. 4), Hawaii (H.B. 552) and Maine (S.B. 456)—set targets to transition state-owned fleets to electric vehicles. Specifically, Connecticut now requires that 50% of state-purchased vehicles must be EVs starting in 2026, gradually reaching 100% by 2030. It also prohibits the state from procuring any diesel transit buses starting in 2024. California enacted legislation (S.B. 1010) that may influence both state vehicle procurement and the practices of private rental fleet owners by requiring the state to evaluate bidders for state commercial car services in part on the number of EVs in their rental fleets.
Addressing EV Transition Impacts on Road Infrastructure Funding
As this happens, states continue to grapple with a downward trend in road funding revenue, much of which comes from fuel taxes. Fuel tax revenues have long been declining due to improved vehicle fuel efficiency. With the expansion of the EV market, that trend is now accelerating. To address this challenge, states have taken different approaches, including levying taxes on the electricity used to charge EVs or creating alternative ways to collect road funding revenues from EV drivers—in some cases dedicating EV registration fees toward road infrastructure and EV charging infrastructure development. In 2022, Oklahoma and Kentucky both enacted new 3 cents-per-kWh taxes on the electricity used to charge electric vehicles. Both would direct much of these revenues to state road funding accounts, while Kentucky’s tax would be indexed to changes in the National Highway Construction Cost Index (NHCCI). Louisiana enacted legislation (H.B. 1031) taking a different approach, imposing a road usage fee on certain electric and hybrid vehicles that would charge vehicles for the number of miles driven rather than gas consumption. Other states like Minnesota considered EV charging tax legislation, and still others are studying the issue. This could be an area where we see additional action in 2023.