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Biden's Veto Threat
On Wednesday, President Joe Biden's administration disclosed its intention to veto a Senate Republican-initiated move that aims to repeal Biden's decision to relax some "Buy America" stipulations for publicly financed electric vehicle charging stations. The GOP-backed legislation is scheduled for a 5:30 p.m. ET vote.
According to the administration, the GOP bill could result in the complete abolition of the domestic manufacturing regulation for these charging units, thereby negatively impacting local manufacturing and job creation in the U.S.
Waiver to Boost EV Charger Implementation
In February, the Federal Highway Administration (FHWA) acquiesced to a temporary waiver on some conditions until July 2024, a move believed to expedite the procurement and installation of EV chargers.
But the bill from the Republicans that aims to nullify this waiver could also overturn the FHWA's decision to instate Buy America mandates on EV charging stations.
Implications of the Republican Bill
The White House, further explained that if the GOP bill succeeds, the 1983 resolution passed during Reagan's period that exempts manufactured goods from Buy America requisites could be reinstated. This would mean that EV chargers will not be enveloped under any Buy America rules.
However, Senator Marco Rubio opposed the White House's stance, contending that they could separately retract the 1983 waiver at any given time.
"The Biden administration is neglecting the 'Buy America, Build America' clause of the law, meaning taxpayer money is being allocated towards foreign-made EV chargers," Rubio pointed out.
Funding and Regulation
A budget amounting to $7.5 billion has been reserved by the Congress for the development of electric vehicle charging points.
As determined by the 2021 bipartisan infrastructure legislation, federal infrastructure undertakings like EV charging stations are required to source a minimum of 55% of construction components, inclusive of iron and steel, from local sources. Furthermore, they should be fully manufactured within the country.
The regulations adopted in February postpone this 55% stipulation until July 2024 so that chargers can be assembled in a U.S factory.
Supply Chain Constraints
Essential parts of the EV chargers such as the internal structural framework, heating-cooling fans, and the power transformer necessitate iron and steel. Notably, chargers with housings make use of even more steel, accounting for up to 50% of the unit's total cost in some instances.
Warnings have been issued by American companies and states about the pressure on the supply chain owing to the worldwide demand for EV chargers. Struggling to keep up, these entities have voiced concerns about the feasibility of adhering to the Buy America norms and hastening the rollout of new chargers.
