Navigating Challenges in EV Charging Infrastructure Development

The rapid rise in EV sales in the U.S. has created an urgent demand for EV charging infrastructure, which is essential to support the growing number of EVs on the road. As the EV industry expands, “range anxiety” remains one of the key barriers to widespread adoption. With 20% of EV drivers unable to charge at home, the burden on public charging infrastructure intensifies.

Additionally, rural areas remain underserved, like cell phone coverage gaps of the 1990s, with 90% of charging infrastructure concentrated in urban regions. As demand grows, several legal, regulatory, and operational hurdles must be carefully managed to ensure sustainable development.

The EV Charging Ecosystem

The EV charging infrastructure ecosystem is complex and involves various stakeholders, including: 

• CP OEMs manufacture the physical and digital components of charging stations.
• CP Owners finance and own the charging stations and equipment, called Electric Vehicle Supply Equipment (EVSE). They contract with construction firms for infrastructure development.
• CPOs manage EVSE's operation, service, and maintenance. They also provide the backend software that enables customer service and billing.
• eMSPs facilitate services for EV drivers, such as locating charging stations and processing payments using proprietary software.
• DSOs are responsible for providing the electricity needed to power EVSE.
• EV OEMs play a significant role in developing charging infrastructure, often offering charging packages to customers.
• Site Hosts, such as stores, shopping centers, and office buildings, provide the physical space for charging stations and sometimes actively seek out partnerships for installations.
• EV Contractors handle the construction and connection of EVSE to the electricity grid.

This interconnected landscape of stakeholders creates a labyrinth of roles, responsibilities, and transaction structures. For example, a DSO may also be a CP Owner, while Site Hosts may engage in eMSP activities to attract business.

Legal and Regulatory Challenges

The sale and provision of electricity are heavily regulated at the federal and state levels. At the federal level, the Federal Energy Regulatory Commission (FERC) regulates the wholesale sale of electricity, while state Public Utility Commissions (PUCs) oversee the retail sale. CPOs must navigate these regulations carefully, as selling electricity on a retail basis could classify them as public utilities subject to additional regulatory scrutiny.

In some states, CPOs are seen as providing services rather than selling electricity, reducing regulatory burdens. However, this classification is not universal, leading to ambiguities that require careful regulatory environment analysis. In deregulated markets, CPOs can set prices based on market rates, while in regulated markets, they must adhere to published tariffs.

Data Privacy and Security

The expansion of EV charging infrastructure raises significant data privacy and security concerns. Multiple stakeholders process sensitive personal information, such as EV drivers’ contact details, vehicle information, and charging habits.

Ensuring compliance with data protection laws and safeguarding this data is crucial. To mitigate risks such as identity theft and unauthorized access, stakeholders must implement robust cybersecurity measures, including end-to-end encryption and secure data storage.

Incentives and Funding Opportunities

Various federal, state, and local incentives support the development of EV charging infrastructure. Key federal incentives include:

• Bipartisan Infrastructure Law (BIL): Signed into law in 2021, this law allocates $7.5 billion for EV charging projects, including the National Electric Vehicle Infrastructure (NEVI) Formula Program and the Charging and Fueling Infrastructure (CFI) Program.
• Inflation Reduction Act (IRA): Passed in 2022, this law offers a 30% tax credit for EV charging installations in non-urban and low-income areas. The tax credit covers up to $100,000 for large-scale projects and up to $1,000 for residential installations.

State and local governments also provide grants, rebates, and other financial incentives, often tiered based on the charging infrastructure’s capacity.

Download the latest report from Troutman Pepper for a more in-depth look at navigating legal, regulatory, and operational challenges in EV infrastructure.