WION published February 10, 2022: US unveils $5 billion plan to fund Electric Vehicle (EV) charging network. Biden administration has unveiled its plan to award nearly five billion dollars. The money will be used over five years to build thousands of electric vehicle charging stations.
Fox News published November 18, 2023: Study reveals the hidden costs of electric vehicles. Former OMB director Russ Vought explains how the higher purchasing cost of electric vehicles, the cost to the electrical grid, and President Biden’s policies contribute to higher prices.
My Tesla Weekend published November 17, 2023: Is Gas Business OVER EV Revolution! - Oil companies move big into EVs.
Bloomberg News
written by Ryan Fisher
Tuesday November 14, 2023
Thanks for reading Hyperdrive, Bloomberg’s newsletter on the future of the auto world.
Where EU and US Funds Are Going
More than $10 billion of government funds have been awarded or are in the process of being doled out across Europe and the US toward highway electric vehicle charging. BloombergNEF has analyzed these programs and their many subplots, from Tesla’s success in winning funds to the focus on facilitating EV adoption in rural America and Eastern Europe.
One element that continues to stand out is the extent of the influence of oil and gas companies. The industry is both trying to preserve some semblance of the status quo through existing network contracts and diverting some funds away from EV charging.
We’re seeing this come into play with hydrogen refueling stations, which the European Union is devoting far more funds to than would seem to be warranted based on how little traction fuel cell vehicles have managed to gain in the market.
Hydrogen Stations Gain 29% of EU Funds Despite Few Vehicles
Awarded funds by fuel category for EU CEF infrastructure funding
The EU’s alternative transport infrastructure fund has awarded €284 million ($304 million) to hydrogen fueling stations, almost a third of its total funding disbursed so far.
It’s clear why oil and gas companies want to switch to hydrogen — it suits their current infrastructure model better than moving to electricity. But that better fit hasn’t kept some companies, including Shell in the UK, from shutting down some hydrogen stations due to the lack of vehicles using them and inferior economics.
More government funding seems a waste, particularly for passenger vehicles. Automakers only managed to sell around 15,000 hydrogen cars globally last year, compared to 7.5 million battery-electric vehicles. That’s 500 times more sales.
Even hydrogen trucks are expected to be niche in the future, representing less than 5% of BNEF’s sales forecast out to 2040.
If you want zero-emission vehicles to proliferate quickly, as policy dictates, infrastructure funding needs to align with the trajectory of vehicles being sold. This is a point I’ve made previously in comparing the $30 billion a year that the US spends on biofuel subsidies with the government’s $7.5 billion five-year program for EV charging infrastructure.
We’re also seeing incumbent fuel providers play a prominent role in the rollout of EV charging.
In Germany, Tesla and fast-charging operator Fastned have brought a case against the federal government to challenge the addition of EV charging to already-existing motorway concessions on the Autobahn.
Tank & Rast, the closely held operator of motorway services including petrol and gas filling stations, lays claim to more than 90% of concessions and around 360 gas stations through agreements with the likes of Shell and OMV.
Tesla and Fastned argue that extending current concessions to EV charging effectively blocks competition and want the government to run a separate tender process. The case was referred to the European Court of Justice.
Similar issues can be expected to bubble up elsewhere. In the Netherlands, for example, many cities tender land for gas stations in return for fees, including annual leases and charges based on the amount of fuel distributed. These can generate substantial funds and cost real money — Shell won a bid for a single site in Rotterdam for €10 million last year.
Governments have their work cut out introducing EV charging to these systems, particularly in the middle of existing contracts.
Oil and Gas Companies Win 24% of EU Highway Charging Funds
EU CEF funding for highway charging by sector of company
While oil and gas companies are well positioned with existing fueling stations, they aren’t mopping up all the government charging funds. In the first four rounds of the EU’s Connecting Europe Facility funding directed to highway charging, automotive companies led by Tesla won the biggest share, at 33%. Oil and gas companies received 24% of the funds.
Interestingly, in the case of Germany’s flagship grant of around €2 billion toward 900 fast-charging sites for a network called the Deutschlandnetz, TotalEnergies was the only winner from the oil and gas sector, getting 14% of funds. The rest was won by utilities, infrastructure investors and pure-play charging companies.
The tender included a scoring mechanism based on cost, meaning companies could essentially price competitors out. The makeup of the victors shows that sectors other than oil and gas are determined to muscle in.
Moving forward, this competition will eat away at oil and gas companies’ share of sales. Tensions that largely have remained below the surface thus far will become more prominent.
With over 4,000 motorway service areas that Fastned estimates will come up for concessions in Europe soon, there’s no time to rest for companies wanting to win fresh funding for charging stations.
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