The start of 2023 is upon us, and this could be a notable year for the future of transportation. With the passage of the bi-partisan $1.2 trillion Infrastructure Investment and Jobs Act (IIJA) in late 2021 and the Inflation Reduction Act (IRA) in 2022 and an increased national focus on incentives for alternatives to carbon fuel-powered cars and equity for communities negatively impacted by transportation infrastructure, there are several exciting things to be thankful for and to watch in 2023 and beyond that can have significant impacts on the future of transportation.
Man inserting electric plug into car for charging at electric vehicle charging station
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Electric Vehicle (EV) Tax Credits and Impact on Vehicle Sales
Despite rapid growth in recent years, only about one percent of all vehicles on U.S. roads are EVs. And while EV sales have improved from two percent of all new car sales to about six percent in 2022, on the current trajectory, it will still take many years for EVs to reach parity with combustion engines since about 17 million new cars are sold each year.
As of January 1, 2023, certain Americans will qualify for a tax credit of up to $7,500 for buying an EV, thanks to the IRA. While there have been tax credits in the past for EVs, many of them have been capped by the 200,000-vehicle caps, so more widely known EVs were no longer eligible. Commencing in 2023, the 200,000-vehicle cap will be eliminated, allowing EV makers capped out of the tax credit to promote its use once again to potential purchasers.
Even more exciting is a new $4,000 tax credit for the purchase of a previously owned EV, which could be a potential boon for car buyers priced out of the new EV market but are still hoping to switch to a less polluting vehicle.
One negative that commenced on January 1, is that the credits will be capped to an income level of $150,000 for a single-filing taxpayer and $300,000 for joint filers. An additional and related negative with respect to the tax credits is that the eligibility requirements are causing mass confusion because of various price requirements, supply chain requirements and the timing and overlap of old and new credits. Potential purchasers of EVs (new and used) should do their respective research to determine if the EV they purchase will be eligible for a federal tax credit. They should also check what credits their respective states may offer. For California residents, a helpful website listing various statewide incentives is the California Air Resources Board site known as DriveClean.ca.gov.
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EV Charging Infrastructure
The expansion of tax credits and the lifting of caps for existing EV makers that has commenced in 2023 should (hopefully) lead to even more EVs on U.S. roads. With more EVs comes the need for even more chargers. The IIJA included billions in funding for the necessary buildout of the U.S.’s electric vehicle charging infrastructure, which should help to meet President Biden’s goal of installing 500,000 EV chargers by 2030. In furtherance of this goal, the IIJA established the National Electric Vehicle Infrastructure Formula Program (NEVI Formula) to provide funding to states to deploy EV charging infrastructure, among other things.
In September 2022, the federal government approved NEVI deployment plans for all 50 states, the District of Columbia, and Puerto Rico. With this approval, all states now have access to NEVI Formula funding in 2022 and 2023, totaling more than $1.5 billion to help build EV chargers covering approximately 75,000 miles of highway across the country.
However, the IIJA also included the “Build America, Buy American Act,” which requires all iron, steel, manufactured products, and construction materials used in covered infrastructure projects to be produced in the United States for all federal financial assistance obligated for infrastructure projects after May 14, 2022. There currently is a January deadline to have all the chargers built domestically, which could significantly delay the EV-charging rollout since most of the EV-charger materials are still made overseas. A proposed waiver of this requirement is currently in the works, though it has not been finalized.
Broadband Expansion
The IIJA dedicated $65 billion for improving the country’s broadband capabilities, and states are already rolling out plans to expand broadband in areas that currently receive none or insufficient coverage. Once broadband is built and coverage is expanded, the resulting better broadband capabilities should have a positive impact on transportation and highway operations, including through applications that centrally manage signal systems and variable speed limits and cameras that improve incident response and timing, among others.
While driverless cars are already being used as robotaxis in certain U.S. cities, to maximize the potential of autonomous vehicles, vehicle-to-vehicle (V2V) and vehicle-to-infrastructure (V2I) upgrades coupled with reliable broadband will be needed to connect all vehicles, apps, and humans to each other. Once connected and supported by sufficient broadband, such driverless vehicles will be better able to communicate with the other cars they travel with, the roads they drive on, the bridges they traverse, the cross signals they pass, and the bicyclists and pedestrians they are constantly in danger of striking.
Incentives for Electronic Bicycles (ebikes)
Ebikes continue to be popular, not only among children and teens but also as a commuting option for adults. By 2023, the total number of ebikes around the world could reach 300 million, which is a fifty-percent-increase compared to 2019’s 200 million. And, while ebikes are much less expensive compared to a personal vehicle, ebikes are not cheap. Thankfully, states are taking notice of the rise of ebikes and the benefits they provide to a cleaner climate and mobility options, and several either have or are working on incentives.
For example, the California Air Resources Board is currently outlining an ebike incentive program that would provide qualifying applicants with a voucher of up to $750 for a regular e-bike and up to $1,500 for a cargo ebike. Some cities, like Denver, and counties have their own incentive program as well.
Implementing Transportation Equity
In 2021, the IIJA established a new $1 billion discretionary grant program to reconnect communities divided by transportation infrastructure like large highways, overpasses, bridges and other concrete and noisy barriers. Historically, the communities most impacted by such infrastructure are predominantly populated by people of color, immigrants, and lower-income individuals. These divisions have caused other inequities, including transportation inequities that city planners are focusing on.
In the transportation world, “transportation equity” is a hot topic. Indeed, a study conducted by the University of Michigan found that increasing equitable access to transportation is a top priority for transportation practitioners. But just because something is “hot” doesn’t necessarily mean it is well-defined. In fact, it is fair to assume that most people (including the author prior to writing this post) don’t really know what “transportation equity” means. Hopefully that will now change.
Check the word “equitable” in a dictionary, and it will be defined simply. Equitable means “fair and impartial.” Check the word “transportation” in the dictionary and one of the many definitions is that transportation means “the act of transporting (which itself means to carry, move or convey from one place to another).” Combing the two terms into the phrase “equitable transportation” and applying it to the movement of people should therefore mean to carry, move, or convey people in a fair and impartial way.
What should “fair” mean in the context of transportation? After reading numerous studies and articles, “fair” indicates having access to high-quality, reliable, and safe transportation. And what about the meaning of “impartial” in the context of transportation? Impartial should at the very least mean that anyone, no matter their physical attributes, wealth, education, race, religion, sexuality, etc. has “equal” access to high-quality, reliable, and safe transportation. Even though there may be at least one option available, which is typically a car (either owned by the traveler or by someone else), the focus of transportation equity perhaps should be on the amount of time it takes an individual to travel safely from point A to point B. After all, the “haves” can always pay more to gain access to toll lanes or other faster modes of transportation, while the “have nots” are stuck traveling longer distances.
There are many methods of transportation available today, depending on one’s means and abilities. The most basic is walking if one can walk. Then there are non-motorized wheel-based options (i.e., wheelchairs, walkers, skateboards, rollerblades, scooters, bicycles), as well as motorized wheel-based options (i.e., electric skateboards, wheelchairs, scooters, bicycles) and trains (both light rail and other options). The method that has been the primary beneficiary of transportation funding for nearly 100 years is the personal vehicle. And even though most people will say that a personal vehicle is a necessity to succeed in most places in the U.S. today, a personal vehicle is still an expensive luxury that many people cannot afford.
With a focus on transportation equity, the hope is that everyone will soon have access to high-quality, reliable and safe transportation options that are not always so car-focused. And with better access, perhaps everyone will have more of the one resource no one is able to buy: time.