The Trump administration has announced new guidelines for the distribution of $5 billion in funding for electric vehicle (EV) charging infrastructure. This move comes on the heels of a legal tussle with a group of states.
DOT Eases NEVI Rules, Cuts Rural and Labor Mandates
The Department of Transportation (DOT) under the Trump administration has issued new guidelines for the allocation of the $5 billion NEVI (National Electric Vehicle Infrastructure) program. This comes after a series of attempts by the administration to block the funding, which was originally approved by Congress at the beginning of Donald Trump‘s second term.
A group of states took legal action against the freeze, and in June, a judge ruled in their favor, issuing an injunction against the administration’s spending freeze. The DOT, led by Sean Duffy, criticized the states for the delay in utilizing the funds.
The DOT said the funding was merely paused during a "review process" to confirm the NEVI program aligned with the administration's priorities. On Monday, it issued new guidelines streamlining the review for charging stations, eliminating several steps that were previously required before construction could start.
Notably, the DOT has eliminated the mandate that a set percentage of charging stations be built in rural, underserved, or disadvantaged areas. The revised guidelines also drop the requirement for funding proposals to show how projects will support strong labor practices, safety training and installation standards.
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EV Charger Funds Release May Spark Market Growth
This decision comes after a federal court judge in Washington State ordered the Trump administration to release the funds for EV chargers in over 14 U.S. states, including New York, Arizona, and California, in June. The ruling stated that if the states were to sue the federal government for illegally withholding congressionally approved funds, they would succeed.
The withholding of funds and tariffs imposed by the Trump administration had led to a decline in EV battery demand, according to LG Energy Solutions, a battery supplier for U.S. automakers like Tesla Inc. (NASDAQ:TSLA) and General Motors Co. (NYSE:GM). The new guidelines could potentially stimulate the EV market, which saw a 2.2% drop in the average transaction price for new EVs in July.
Meanwhile, EV makers are scrambling to make the latest changes as the $7,500 Federal EV Credit ends on 30 September, with Tesla leading a new price reduction in July.
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