US infrastructure deal includes reduced spend on electric vehicles

$15bn EV allocation only a fraction of what Biden wants, but Democrats hope for more down the line

Employees assemble a Volkswagen electric car. AFP

The US Senate has voted to push ahead with an almost $1 trillion infrastructure plan that would include billions of dollars to revamp America's rusting bridges, crumbling roads and ailing power grids.

The bill also provides $15 billion in support for electric vehicles (EVs), including $7.5bn to build a network of charging stations that would help make travelling across the vast country more appealing for electric car owners worried about range.

While $15bn for EVs may sound like a lot, it is a far cry from the $157bn Democrats initially sought – a cut of 90 per cent – with many Republicans still sceptical or openly dismissive of the threats from climate change and the importance of reducing fossil fuel emissions.

But Democrats are optimistic they can eventually score billions more in EV spending through a subsequent bill they aim to push under different Senate rules that would not require a Republican sign-off.

Several popular EV and battery maker stocks were up on Thursday, with Tesla gaining more than 5 per cent by midday, while the Global X Lithium and Battery Tech ETF was up about 4 per cent and Canada-based Lithium Americas rocketed more than 6 per cent.

“The bill will provide funding for deployment of EV chargers along highway corridors to facilitate long-distance travel and within communities to provide convenient charging where people live, work and shop,” the White House said in a statement.

“Federal funding will have a particular focus on rural, disadvantaged and hard-to-reach communities.”

Range is a major concern for those weighing an EV purchase, particularly in rural areas connected by vast stretches of motorway that currently have far fewer charging points than petrol stations.

The US market share of plug-in EV sales is still only one third the size of the Chinese market, the White House said.

The bill the Senate voted to advance on Wednesday also includes $2.5bn for thousands of electric school buses that would replace many of the noisy, diesel exhaust-spewing yellow coaches that are a common sight in cities and rural areas everywhere across the US.

“These investments will drive demand for American-made batteries and vehicles, creating jobs and supporting domestic manufacturing, while also removing diesel buses from some of our most vulnerable communities,” the White House said, referring to the asthma-causing effects of particulate pollution.

President Joe Biden has been trying to convince Republican voters that EVs are the “future of the auto industry”. In May, he toured a Ford electric vehicle plant in Dearborn, Michigan, where he test drove the new electric version of the F-150 pickup truck that is hugely popular in rural America.

On Wednesday, while viewing the lorries at a Pennsylvania factory, he promised workers his policies would reshape the US economy for the working class – a message clearly aimed at a group of voters who have drifted to the Republicans.

During the visit, Mr Biden heard about Mack’s electric rubbish lorries. The White House said the ability to build and sell these new vehicles would be helped by the president’s proposed incentives for domestic EV manufacturing.

The Senate infrastructure bill also includes $25bn for airports, $55bn for waterworks and more than $50bn to bolster infrastructure against cyber attacks and climate change.