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‘Buy America’ takes a back seat in drive to build EV charging stations

Made-in-America requirements are already being bypassed as contracts are awarded for new infrastructure projects

The bipartisan infrastructure law has provisions requiring that much of the steel and other components of highway projects be made in America.
The bipartisan infrastructure law has provisions requiring that much of the steel and other components of highway projects be made in America. (Tom Williams/CQ Roll Call file photo)

It’s been a year since Congress ramped up domestic production mandates as part of its sweeping infrastructure bill. But its made-in-America requirements are already being bypassed for one of the biggest transportation projects since the construction of the interstate highway system — the Biden administration’s plan to build a national network of charging stations for electric vehicles.

The “Build America, Buy America” provisions of the bipartisan infrastructure law mandate that federal infrastructure projects obtain at least 55 percent of construction materials, including iron and steel, from domestic sources and have all manufacturing done in the U.S.

But soon after the administration issued “Buy American” requirements in May, the Department of Transportation and other agencies requested waivers, including for production of EV charging stations included in a $5 billion program created by the infrastructure law.

The waiver requests, now totaling more than 30 according to tracking by the Alliance for American Manufacturing, have lawmakers who pushed for the Buy American requirements worried that federal agencies are again ignoring domestic production mandates as they have for decades.

“For a long time, the federal government has quietly skirted Buy American requirements and spent taxpayer dollars on goods made overseas,” said Sen. Christopher S. Murphy, D-Conn. “But loopholes still exist, and I’m working to make sure we tighten our laws to protect American workers.”

The Buy American provisions allow agencies to apply for waivers if domestic procurement would increase costs by 25 percent, is “inconsistent with the public interest” or if the product is not made in the U.S. in “sufficient and reasonably available quantities,” according to the White House guidance. 

EV chargers require iron and steel for some of their most crucial parts, including the internal structural frame, heating and cooling fans and the power transformer. Chargers with cabinets that house the product require even more steel, making up to 50 percent of the total cost of the chargers in some cases.

Global competition

As the market for EV charging equipment is expected to reach $2 billion by the end of 2022, the industry is growing rapidly across the planet. And compared to other manufacturing giants, the U.S. lags.

China accounted for over half of the global steel output in 2020, towering over the U.S.’ 4 percent, and the Asia Pacific region is expected to dominate the market for metals used in EV chargers. Countries across Europe are also setting up networks of fast EV chargers, and market research firm Fact.MR estimated the continent is on track to hold 30 percent market share for metals used in charging infrastructure.

By comparison, the U.S. is only the fourth-largest steel producer in the world, according to 2020 volumes, and is the second-largest steel importer. And DOT’s Buy American waiver further signals that U.S. domestic iron and steel production isn’t sufficient to rise to the EV boom.

Although 11 manufacturers have said they can produce EV chargers that comply with Buy American standards, only three of them — ChargePoint, FreeWire Technologies and Rhombus — said earlier this year that they could produce direct current fast charging (DCFC) products. Those chargers, which can power some electric vehicles in 15 to 45 minutes, are critical to green infrastructure goals to cut down on charging time and make EVs more appealing for long-distance drivers.

FreeWire told the Federal Highway Administration it can produce 140 DCFC chargers in 2022 that meet Buy American requirements, and Rhombus promised nearly 3,000 annually. And although other companies like charging manufacturer Tritium and German-based Siemens have discussed plans to produce fast chargers that meet the requirements, FWHA said in its proposed waiver that “uncertainty remains” about their ability to immediately meet demand for buy America-compliant DCFC chargers.

The agency proposed the waiver at the end of August, claiming that implementing Buy American requirements for the chargers would be “inconsistent with the public interest because it is likely to delay immediate implementation of [bipartisan infrastructure law] programs providing funding for EV chargers.”

The proposed waiver would halt Buy American requirements for the chargers through the rest of 2022 and then slowly restore them in 2023 and 2024.

“Following an initial period for American EV charging manufacturing to ramp up, FHWA proposes to transition and minimize the scope of the waiver over time to ensure the maximum utilization of goods, products, and materials produced in the United States,” the agency said in an emailed statement. “The comment period for the proposed waiver ended on September 30, giving States, labor, and industry leaders time to share their perspective. FHWA is carefully reviewing all of the public comments it received and will make a determination on a final waiver soon.”

Domestic manufacturing advocates are arguing that DOT, which has been subject to made in America mandates for over 40 years, is just continuing a trend of sidestepping efforts to ramp up domestic production.

“Nearly a year has passed since the infrastructure bill became law and some federal departments are still dragging their feet,” said Scott Paul, president of the Alliance for American Manufacturing. “At risk are vast amounts of U.S. taxpayer dollars intended for public works that contractors could send offshore rather than reinvest in the U.S. economy.” 

Paul said he expected some agencies that have not had to abide by made-in-America preference in the past to struggle to implement the infrastructure law’s mandates. The Commerce, Treasury and Education departments have approved six-month made-in-America waivers that cover the bulk of their materials. 

But DOT’s delay is different, as many of the agency’s made-in-America mandates also deal with domestic production and manufacturing of iron and steel. And they’ve overused waivers along the way, critics say.

For example, FHWA enacted a 1983 blanket waiver for products that contained less than 90 percent of domestic steel or iron, which the U.S. District Court for the District of Columbia struck down in 2015 for being “arbitrary and capricious.” 

Regardless of the court decision, FHWA still has a general applicability waiver for manufactured products in place, meaning that the made-in-America laws for those products do not apply to federal aid highway projects.

‘Plenty of time’

Besides that, Paul argued that there are already well-established domestic supply chains for iron and steel — products that Buy American laws specifically target — and that 11 months “should be plenty of time.”

“Companies are already responding to the Buy America policy and the historic funding by making capital investments in the U.S. market to create and expand U.S. manufacturing capabilities in this emerging and critical sector,” he said. “The combination of a massive new investment coupled with strong domestic preferences will encourage new market participants in serving the domestic procurement market, unless Buy America waivers are overly broad or overly long.”

Although some lawmakers and domestic manufacturing advocates are growing impatient, the industry has largely praised the waivers, which are buying companies more time to reconfigure the supply chain during a period of inflation. 

And they might even need more time, said Genevieve Cullen, president of the Electric Drive Transportation Association.

“The fact is, this is an emerging industry and there are still kinks in the supply chain,” said Cullen. “In the wake of all of the disruption of the last couple of years, in order to build out infrastructure, they’re gonna have to create a little more room in this waiver process.”

Sen. Sherrod Brown, D-Ohio, is still hopeful the DOT will transition from leaning on waivers, according to his spokesman, who added that it was a good sign that FHWA included a phaseout in its proposed waiver for EV chargers, as many agencies issue a blanket waiver without a plan to restore the requirements.

“The Department of Transportation has far more experience with Buy America policies in the transit space,” where Made in America mandates have been in place for years, Brown’s spokesman said. “This will help the department move much faster in terms of implementation and will help bolster domestic manufacturers, domestic industrial producers.”

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