New Biden EV charger rules stress Made In America, force Tesla changes (updated)

ACN 650 026 314

15/02/2023 15:54

(Adds rule details, Tennessee facility)
    By Jarrett Renshaw and Hyunjoo Jin
       Feb 15 (Reuters) - The Biden administration on Wednesday
issued long-awaited final rules on its national electric vehicle
charger network that require the chargers to be built in the
United States immediately, and with 55% of their cost coming
from U.S.-made components by 2024. 
    The White House hopes the new rules, issued after nearly
eight months of debate, will jump-start the biggest
transformation of the U.S. driving landscape in generations. It
seeks to give consumers unfettered access to a growing
coast-to-coast network of EV charging stations, including Tesla
Inc's   TSLA.O  Superchargers. 
    Companies that hope to tap $7.5 billion in federal funding
for this network must also adopt the dominant U.S. standard for
charging connectors, known as "Combined Charging System" or CCS;
 use standardized payment options; a single method of
identification that works across all chargers; and work 97% of
the time.
    Tesla, the nation's largest EV maker and charging company,
plans to incorporate the CCS standard and expand beyond its
proprietary connectors, the administration said.
    "No matter what EV you drive, we want to make sure that you
will be able to plug in, know the price you're going to be
paying and charge up in a predictable, user-friendly
experience," Transportation Secretary Pete Buttigieg told
reporters in a preview of the rules.
    The first tranche of the billions in federal funds will now
be rolled out to states in upcoming weeks, forcing companies
like Tesla, EVgo Inc  EVGO.O  and ChargePoint Holdings Inc
 CHPT.N  to jockey for their share of the funds from state
governments. 
    The network is a central part of President Joe Biden's plan
to tackle climate change by converting 50% of all new U.S.
vehicle sales to electric by 2030. A dearth of chargers on
Ameriocan roads has slowed the growth of EV sales and the
positive environmental impact, advocates say. 
    Manufacturers warned before the rules were released that
imposing a domestic components quota too soon in the program
rule would slow the rollout. The new rules extend the Made in
America deadlines to help give those companies more time to
onshore their supply chain. 
    EV charger manufacturer Tritium  DCFC.O  announced on
Wednesday that it will add more than 250 jobs to its Tennessee
manufacturing facility, bringing the total to more than 750 jobs
at the site. White House National Climate Adviser Ali Zaidi said
that under Biden's leadership the number of EV models being
offered to consumers has doubled, along with the number of
charging stations and EV sales.
    "So this is not pie in the sky. It's literally steel in the
ground. We are seeing the Biden climate vision on wheels," Zaidi
said. 
    'BUILD AMERICA, BUY AMERICA' 
    Under the 2021 bipartisan infrastructure law, federal
infrastructure projects like EV chargers must obtain at least
55% of construction materials, including iron and steel, from
domestic sources and have all manufacturing done in the United
States starting immediately.
    However, the Department of Transportation requested a waiver
for EV charging stations and initially proposed that at least
25% of the chargers' overall cost come from American-made
components starting in July of this year and then 55% by Jan. 1,
2024. 
    The new rules ditch the two-step process and start imposing
the component cost provision in July 2024 at 55%. The chargers
must be assembled at a U.S. factory, and any iron or steel
charger enclosures or housing must be made in the United States,
starting immediately.
    The United States and its allies Mexico and the European
Union have clashed over protectionist policies implemented by
Biden. The United States and the EU set up a task force last
year to look at American laws that Europeans fear will
discriminate against foreign electric car makers.
    EV chargers require iron and steel for some of their most
crucial parts, including the internal structural frame, heating
and cooling fans and the power transformer. Chargers with
cabinets that house the product require even more steel, making
up to 50% of the total cost of the chargers in some cases.
    Global demand for EV chargers is putting strain on the
supply chain that makes it difficult, if not impossible, to meet
the made-in-America standards and expedite construction of new
chargers, states and companies warned in comments to the
Department of Transportation. 
    The new rules would allow Tesla to keep its unique
connectors, but it will have to add a permanently attached CCS
connector or adapter that charges a CCS-compliant vehicle,
similar to a gas pump that has a separate handle for gas versus
diesel.
    Tesla told the DOT that the plan was "aggressive" and "could
lead to a shortfall in the number of compliant charging stations
available given the pace and scale of deployment," records show.
    However, labor advocates argue that delaying or skirting the
requirements undercuts congressional intent and punishes
companies that moved early to comply with the rules. 
    "This is a once-in-a-lifetime shot to get this right," said
Scott Paul, president of the Alliance for American
Manufacturing. "The challenge with extensions is it becomes
habit-forming and the herd will always fight and delay."
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FACTBOX- CCS? CHAdeMO? EV charger terms you need to know   
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 (Reporting by Jarrett Renshaw in Philadelphia and Hyunjoo Jin
in San Francisco; additional reporting by David Sherpardson;
editing by Heather Timmons, Matthew Lewis and Jonathan Oatis)
 ((jarrett.renshaw@thomsonreuters.com; (646) 223-6193;))