Scarcity of Charging Stations May Leave Electric Vehicles Dead on the Road | SoFi

EV Explosion

On the heels of Tesla’s (TSLA) extraordinary success in the electric vehicle space, there is a global push to embrace this new technology and move away from gas-powered engines. Big domestic automakers General Motors (GM) and Ford (F) are ramping up their production capabilities to bring more of these cars to market.

Meanwhile, President Biden has signed an executive order to make half of all cars sold in 2030 either electric or powered by alternative fuels.

Charging Problem

Many applaud the move to electric and the possibility of making a difference by slowing harmful climate change. As competition heats up EVs will grow in availability and prices may come down. With these dynamics at play, more Americans may be willing to ditch their gas guzzler for an EV. The problem is, industry observers say the number of charging stations in the US isn’t even close to what is needed to meet the coming tsunami of demand.

Currently, there are an estimated 93,000 public chargers in the US and most require a vehicle to be plugged in for hours to fully recharge. While the Biden administration said it wants to increase that number to 500,000, consulting firm McKinsey estimates more than double that amount will be needed.

Slow Start

About four years ago, $424 million was paid out to states as part of a pollution lawsuit settlement with Volkswagen (VWAGY). The money was tagged to mitigate harmful emissions from the German cars’ diesel vehicles, and many states said they planned to use the proceeds to build a network of charging stations. However, only 48% of these funds have been spent, even as President Biden is preparing to disburse another $7.5 billion for new charging stations.

Still, there are signs that mistakes involving poor coordination, uneven distribution of dollars, and red tape are being resolved so that projects may move forward.

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Scarcity of Charging Stations May Leave Electric Vehicles Dead on the Road | SoFi