Legislation recently introduced in the U.S. Senate may result in the increased construction of vehicle electric charging stations nationally.
Introduced by Oregon Senator Jeff Merkley, the Electric Credit Access Ready at Sale Act of 2019, otherwise known as the CARS Act, will offer a federal tax credit over a period of the next ten years for what is described as “alternative vehicle refueling property.”
The previous credit, set at around 30 percent of the cost of the property in question, expired in 2017.
First established in 2005, the credit has since been extended six times.
According to a new study just released issued by the Congressional Research Service called Vehicle Electrification: Federal and State Issues Affecting Deployment, an attempt to reinstate that credit may not be without problems.
“The uncertainty surrounding temporary tax incentives that are often retroactively reinstated diminishes their effectiveness as investment incentive,” the study says.
Even so, the development and building of electric vehicle infrastructure is clearly a matter that is increasingly gaining the attention of investors and policymakers who continue to explore new routes to funding such projects.
One of those routes, the study suggests, could come through tax-preferred bond financing options: “State and local financing for infrastructure solely or partially dedicated to electric vehicle charging projects may use tax-empty bonds.”
But those bonds can only be applied if the project in question is strictly classified as a “public purpose” under the federal code.
Another funding option, according to the study, may come through the existence of a federal infrastructure bank, or what is known as a “green bank,” geared in particular to support electric vehicle infrastructure investment.
That the need for such infrastructure may eventually prove great, the study suggests, may be seen in the simple dynamics of how such technology is used: “If electric vehicles are to be widely used for long-distance trips, a network of direct-current fast charger infrastructure is likely necessary.”
The CARS Act legislation is currently under review in the Senate Committee on Finance.
By Garry Boulard
Get stories like these right to your inbox. Sign up for our newsletter