On February 6, 2025, the Federal Highway Administration (FHWA) released a memo suspending the ability of states and tribes to spend previously approved grants for electric vehicle (EV) charging infrastructure. Regional media has speculated that the suspension is part of a widespread effort by the Trump administration to roll back or freeze dollars allocated to environmental and clean energy projects by the Biden administration.
Electric vehicle (EV) incentives, in particular, have been a focus of the new administration’s ire, despite the auto industry noting that thousands of jobs nationwide depend on electric vehicle and EV battery manufacturing. Eliminating or freezing previously approved funding creates significant uncertainty—a ‘rug pull’ of sorts—and disrupts the planning of thousands of private sector businesses.
How do we quantify the economic consequences of freezing over $420 million in funds that were previously approved for four Ohio River Valley states? In this post, I use US Department of Transportation data, alongside National Electric Vehicle Infrastructure (NEVI) plans submitted by Kentucky, Ohio, Pennsylvania, and West Virginia, to model the potential lost job opportunities for the region. The purpose of this post is not to forecast or predict an exact number but rather to illustrate that the suspended federal NEVI funds represent a significant lost economic opportunity for the region.
How does federal funding for EV charging stations under NEVI work?
The 2021 Bipartisan Infrastructure Law (BIL) created the National Electric Vehicle Infrastructure (NEVI) Formula Program. Under this program, the US Department of Transportation reviewed “State Electric Vehicle Infrastructure Deployment Plans” submitted by states to build and operate public EV charging stations. After these plans were approved, the Department of Transportation then awarded grants to states according to a funding formula set in law. The Bipartisan Infrastructure Law includes $5 billion in total NEVI grants to be awarded over five years, from 2022 to 2026. The first three years of NEVI funds have already been approved though not all of the funds have been obligated.
To be eligible for funding, projects need to use non-proprietary chargers (i.e., not specific to one brand of electric vehicle), accept open-access payment methods, and be publicly accessible, with the goal of building a charging station every 50 miles along US highways. Funding can cover up to 80% of the acquisition, construction, and ongoing operation and data monitoring of the charging stations. States can use the NEVI funds to partner with private companies to do the construction and operation of the charging stations.
States accordingly invested time and money to develop plans and private partnerships to build and operate EV charging stations with their NEVI funds. Ohio River Valley states’ NEVI plans submitted to and approved by the federal government can be viewed here:
How much money and how many jobs could Kentucky, Ohio, Pennsylvania, and West Virginia miss out on?
The new memo places all of the funds for EV chargers in jeopardy— including previously approved unspent funds—as the new administration reviews the program to make sure it aligns with “current US D.O.T. policies and priorities.” The result could mean that our region misses out on over $400 million—roughly 8% of the total $5 billion NEVI funds nationwide.
Ohio River Valley states have been leaders on EV infrastructure. Kentucky, Ohio, Pennsylvania, and West Virginia have currently, according to their own public announcements, planned 199 EV charging projects relying on previously approved NEVI funds. This map tracks NEVI projects, showing the number that are online (“Energized”) and hundreds of announced projects across the country. Ohio, in particular, has been an early leader in bringing NEVI projects online.
These projects represent somewhere between 30% and 50%, depending on the state, of the total NEVI formula funding that would have been available over the full five years of the NEVI program. [1] Using each state’s total funding amount, I use the commercially available input-output modeling software IMPLAN to model estimates that the entire NEVI program could have been responsible for creating. This input-output modeling approach, which uses linkage data between industries to estimate economy-wide impacts, suggests that the NEVI funding could create 2,532 direct jobs across the region over five years and longer, with over 1,200 additional supply chain and induced jobs in the economy. [2]
The jobs created by EV charging infrastructure would include several high-paying fields, such as electricians, electrical engineers, skilled construction labor, as well as project management staff and computer scientists to monitor usage data and maintain system compliance with federal requirements. The same model estimates that total labor income from the lost federal funding would have represented an average of roughly $77,900 per job year.
Lost Opportunity in the Broader Economy
But the lost economic impact doesn’t just end at the direct job losses. Each job supported by the $426 million in NEVI funds would have had a further impact across the regional and national economies. Industries that support the charging station buildouts (electronic equipment manufacturers, rubber and wire manufacturers, transportation and trucking companies, cement manufacturers, etc.) would have experienced increased demand and, thus, more business.
Additionally, new peer-reviewed studies have shown a positive link between charging station availability and EV purchases by consumers who want to be sure that they can reliably recharge during road trips before switching to an electric vehicle. As such, losing out on EV charging station funding and the cancellation of these projects may lead to a decline in demand for electric vehicles overall, impacting automakers from Ford to Tesla. These shifts ultimately shrink future demand for the steel, rubber, electrical hardware, engineering, and software jobs associated with manufacturing electric vehicles. And, on top of all of that, each of these lost supply chain jobs represents income that would have been spent on daily life activities, supporting jobs in a wider collection of industries such as retail, real estate, financial services, entertainment, restaurants, and more across the region. These wider effects—the creation of indirect supply chain job creation and income spending-induced jobs—are what economists call “the multiplier effect.” In essence, each of the 2,532 estimated jobs created by federal EV charging funds “multiplies” in the economy to create additional jobs.
IMPLAN, however, is less reliable for forecasting these indirect and induced job multipliers for a variety of reasons. These reasons can be explored in greater detail in some of our previous work at the Ohio River Valley Institute, but in essence, the type of model IMPLAN uses to estimate the impact of one industry on other industries makes a variety of assumptions that are not always realistic and often exaggerated.
For a more reliable estimate of indirect and induced jobs, I use a modest, more conservative multiplier from Tim Bartik, a well-respected economist at the W.E. Upjohn Institute for Employment Research. Bartik’s multipliers are based on empirical, “real life” jobs data observed after actual investment and development. I apply the lowest multiplier from the Upjohn studies here, to be safe: a total job multiplier of 1.5.
Effectively, this means that each job created directly by EV charging station funds has an assumed “ripple effect” of 0.5 additional jobs in the broader supply chain and economy. This conservative approach (as opposed to using 2.0 or 2.5 multipliers) also helps to account for the fact that not every lost job opportunity would be located in our region. For example, Tesla’s EVs are made in Texas. If charging stations are less available than they otherwise would have been with NEVI funding and, correspondingly, a fewer number of people decide to buy EVs like Teslas than otherwise would have, those lost job opportunities for potential new Tesla employees would occur outside of our region.
Conservatively, then, our model estimates that the suspended EV charging station funds are associated with the loss of another 1,266 indirect and induced job opportunities across our region in all manner of industries.
In full, Kentucky, Ohio, Pennsylvania, and West Virginia stand to potentially lose out on over $426 million in federal EV charging station funds and over 2,500 direct jobs that were already promised (to say nothing of the long-term environmental impact of delaying more EV adoption). It is estimated that these suspended funds are associated with an additional 1,200 lost job opportunities across our region.
We’ll continue to monitor developments with NEVI for our region. The new FHWA memo notes that the agency will post new draft NEVI guidelines for public comment in the spring of 2025 before issuing new guidelines for the program and the associated funds. Until then, it seems that the states, workers, and EV drivers will be left in limbo.
[1] There is significant uncertainty about the FHWA memo’s claim that “obligated funds” will still be available. As of the time of this post, states have yet to receive clarity on what constitutes obligated funds for reimbursement. The memo also notes that obligations will be honored “until new guidance is issued” in the spring of 2025, which may suggest that future announced partnerships that have yet to actually break ground funds may not qualify as “obligations”. Rather than try to assume how much of each state’s funding the FHWA considers to be “obligated” (and therefore, allegedly, not frozen), this post assumes uncertainty in all funds until Spring 2025 to estimate maximum lost economic impact.
[2] IMPLAN’s model estimates as if the full investment occurs over a 12-month period, so this should be technically interpreted as “job years.” In essence, this would mean that the estimate could be interpreted as supporting approximately 506 workers for five years of work. In reality, the actual number of workers is likely somewhere between 506 and the estimated 2,532, with variations between regions depending on the local availability of skilled workers and unique geographic challenges at each construction location.