Smoke and mirrors? NC advances federally-funded EV plan

North Carolina businesses can now apply for federal funds to install electric vehicle chargers along the state’s major highways, the NC Department of Transportation announced this week.

North Carolina received $109 million from the federal government’s 2021 infrastructure deal to build out EV infrastructure. The program provides a total of $5 billion to the states to develop a national EV charging network along major highways through the National Electric Vehicle Infrastructure (NEVI) program.

The NC DOT issued a request for proposals this week for companies interested in applying for the first round of North Carolina’s share. Phase one will focus on Interstate 40, U.S. 17, and I-77. Phase two will focus on increasing public access to electric vehicle charging infrastructure, particularly in historically disadvantaged communities.     

Decarbonizing transportation in North Carolina is a result of efforts led by both Gov. Roy Cooper and President Joe Biden. Last year, Cooper signed the North Carolina Clean Transportation Plan, which furthered the state’s green transportation strategy. He recently announced that North Carolina surpassed its initial 80,000 EV registration goals two years early, but his administration isn’t stopping there. Cooper aims for 1.25 million registered EVs in the state by 2030. At the national level, the Biden administration is still moving forward with efforts to slash gas-powered car sales by forcing more than half of new car sales to be electric by 2030. 

With stakeholders helping implement the NEVI program, Senator Vikki Sawyer, Chair of the North Carolina Senate Transporation Committee, is optimistic regarding a smooth rollout across the state. However, she sees the initiatives as ‘smoke and mirror’ campaign promises that don’t line up with the current market. In an interview, she said the goals are unrealistic when considering market saturation and the pain points consumers are uninterested in bearing. 

“What we’ve seen is that at least North Carolinians just aren’t there yet. And even with the push from Governor Cooper and from the feds and all of this other hoopla, I think a lot of it is just smoke and mirrors because we’re not ready. We’re just not ready,” Sawyer said. “I don’t think it’s realistic. I almost feel like it is a campaign promise or a nod to a certain industry that we are aligned with your thoughts. But it’s not based in fact. I mean, just factually, we don’t have that many EVs that are out here in North Carolina.”

Even with costs and accessibility supplemented through government intervention, Sawyer said that with how often she’s on the road, she can’t have an EV when considering inconveniences like range anxiety, charging time, and weather impacts on the battery. 

That sentiment rings true for many as industry giants such as Ford, General Motors, and Tesla have collectively opted to delay their expansion plans in the year 2024. Ford cut its planned production of the electric F-150 Lightning truck in half, citing “changing market demand.” On the other hand, Ford expects growth in the hybrid market, an area Toyota is keying on with its plans for a new battery plant in North Carolina.

gas tax

As North Carolina EV registrations rise, more drivers are avoiding the gas tax that helps fund North Carolina’s highways. Once a concern among state legislators, the issue has largely dissipated as the state population has grown, boosting the tax revenue. 

“The gas tax futures in revenue has actually stayed stable. In fact, it went up a little bit… So we haven’t had that fiscal cliff that was very ominous a few years ago,” Sawyer explained.

Virginia has recovered $60 million in unpaid gas tax revenue by imposing a road usage charge requiring drivers to pay based on miles driven instead of gallons of fuel consumed. North Carolina collects a highway use tax through a 3% tax on the total value of any new vehicle purchase. The estimated average gas tax that North Carolinians pay is between $240 and $260 a year. There is skin in the game for EVs, Sawyer noted, pointing to the vehicle registration cost of $214 starting in July when the price is adjusted for inflation. For regular passenger vehicles, registration costs $46 under the increased fees, a major contrast from EVs.

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Still, Sawyer doesn’t think additional EV tax collection is a bad idea. Some states like Oklahoma have implemented a method of collecting a charging tax at the time of energy consumption, something she could envision in North Carolina. 

electric grid

Reliability becomes an even greater question when turning to Duke Energy’s efforts to electrify the grid. State law requires public utilities in North Carolina to achieve a 70% reduction in emissions of carbon dioxide by 2030. By 2050, utilities are expected to be carbon neutral.

“Let’s just talk about the bigger scheme of this whole thing,” said Sawyer. “How are we going to continue to produce electricity to fuel all this stuff if the only thing that we can do – in some folks’ eyes – is wind or solar? That equation does not balance.” 

Duke has already pivoted from its initial plans after forecasting higher demand with increased economic development in North Carolina. The company filed a supplemental carbon reduction plan and revealed plans to build a new natural gas power plant in 2026, electing for a reliable energy source as demand growth accelerates and green energy options fall short.