Yahoo Finance's Pras Subramanian discuss the challenges President Biden's $5 billion electric vehicle plan might face.
EMILY MCCORMICK: The Biden administration has unveiled a new five-year plan to make $5 billion available to states to build out an electric vehicle charging network. Yahoo Finance's auto reporter, Pras Subramanian, is here now with the breakdown. And Pras, what specifically is included in this plan, and how would electric vehicle companies potentially be affected by this?
PRAS SUBRAMANIAN: So Emily, it's mostly for the states and local governments to actually spend money to build a public EV infrastructure. It's part of a $7.5 billion plan, $5 billion which is available right now to states, to build out a network of EV charging stations along the Interstate Highway System that covers 49 states and-- and DC.
Now, to access those funds, the state must submit an EV charger deployment plan by August 1 to the federal government, and the plans will be approved by September 30. Plans filed earlier will be approved on a rolling basis, and note, the government will pay 80% of the projects under the plan. Also, funding must be consistent with the White House's environmental justice guidelines that call for 40% of all benefits to flow to disadvantaged communities.
But this doesn't really solve everything, right? Because it-- it takes time to build out all these chargers and the majority of which will be the slower Level 2 chargers, which can only do about 25 miles of charge per hour. And that's because Level 2 chargers cost a lot less. They're a few thousand dollars cheap-- a few thousand dollars to make, whereas DC fast chargers that you might have seen here and there across different communities can be 50 to 100 times more expensive.
So the big picture is, most EV buyers will likely be getting most of their charging done at home. But officials hope that this funding will act as a-- as a catalyst to encourage more buildout that's going to be needed. Research firm AlixPartners says that $50 billion additional will be needed to-- in the US alone just to build out a full EV infrastructure charging situation there. And compare that to the fact that, guys, that we have 41,000 public charging stations right now in the US versus more than 136,000 gas stations in the US, guys.
BRAD SMITH: Wow. OK, so those are astounding numbers to figure out exactly how we are going to get the EV charging up to speed, Pras, but we do know that Tesla has been building out its supercharger network for years now, and they're going to continue to move that forward. And so how have they gone about kind of taking this on by themselves thus far and even into the future?
PRAS SUBRAMANIAN: You know, Brad, about 10 years ago, when the Model S came out after the Roadster, you know, Tesla knew that they needed to build out their own EV infrastructure because the US government and other state municipalities couldn't do it. It was going to cost them too much money. They didn't see the value in it. So they did it alone. They went out, and they built out their Supercharger high charging network. We're talking about almost 40,000 of these chargers across the country. And obviously, now they're global too, building out in places like-- like Europe and South America too.
So it tells us sort of-- it's showing how manufacturers can do it alone, but I-- I fail to see how the GMs of the world and Fords of the world would want to-- would want to implement that kind of plan, given the amount of money it would take to do that when the federal government might actually do it for them. So I think that's sort of where Tesla-- They did it on their own, but it also gave them a huge first-mover and natural advantage versus the other EV companies because you have this massive network to-- to rely on when you're outside the home.