Recently, the U.S. Senate passed a Congressional Review Act (CRA) measure sponsored by Senator Marco Rubio (R-FL), which would overturn a recently finalized U.S. Federal Highway Administration (FHWA) waiver of Buy America policies for electric vehicle (EV) chargers. Sen. Rubio is posturing himself as a champion for manufacturing workers and communities here in the United States. However, his measure actually harms manufacturing workers and communities.
To unpack why this CRA is so threatening to U.S. manufacturing, BlueGreen Alliance Senior Policy Advisor Reem Rayef breaks down what Buy America policies do, why they are important, and how waivers can be strategically used to maximize the impact of such policies.
Q: What Is Buy America?
A: Buy America laws require that infrastructure projects funded with federal tax dollars use iron and steel, construction materials, and manufactured products made here in the United States, and that taxpayer dollars support domestic manufacturing jobs and responsible manufacturing practices. Federally funded infrastructure projects, like highways, bridges, trains, and hospitals, have market-shaping potential. Projects that use U.S. materials and products help create a powerful demand pull for U.S. manufacturing, rather than corporations that outsource production to countries with lower labor and environmental protections. This demand pull creates and protects domestic manufacturing jobs and reduces U.S. reliance on foreign sources for the materials and technologies essential to building the infrastructure supporting our economy.
Q: What is a Buy America waiver, and what does FHWA’s Buy America waiver for EV chargers actually do?
A: Buy America is a tool to incentivize domestic production of critical goods, but it is also a mechanism to identify supply chain gaps and alert investors and manufacturers of new market opportunities. To that end, Buy America policies are effective tools to incentivize capital investments in new U.S. manufacturing capacity and capabilities. But the market signals only work if Buy America policies—and their waivers—are applied and administered transparently in ways that actually provide information about U.S. industrial capacity.
Congress provided waiver authority to federal agencies to overcome short-term market limitations, allowing Buy America preferences to begin working without delays. Agencies typically issue waivers for essential materials and products for which the domestic supply chain is limited, non-existent, or where the cost of procuring those materials and products would be exorbitantly high. By exempting these materials and products, waivers permit agencies to implement programs and complete projects, while communicating to domestic manufacturers that there is urgent demand for a U.S.-made material or product. Bad waivers are very broadly defined, and/or lack timelines or clear phase-ins. Good waivers are narrowly tailored with clear timelines and phase-ins to allow for continuous installation of essential infrastructure projects, but still send clear market signals to manufacturers to begin to invest in their domestic supply chains.
The FHWA Buy America waiver for EV charging infrastructure—which would be revoked by the passage of the CRA—is a good waiver. It is a time-bound, temporary, public interest waiver that strikes a critical balance between two essential priorities:
- Onshoring the EV charging infrastructure supply chain and
- Facilitating the rapid installation of EV charging infrastructure to keep pace with EV deployment.
From the issuance of the waiver in March 2023 through its conclusion in July 2024, federal funding may be used to purchase any available EV charging infrastructure that undergoes final assembly in the United States. Beginning in July 2024, federal funding may only be used for EV charging infrastructure that is assembled in the United States and where at least 55% of the value of the components are attributable to U.S.-made components—essentially “full” Buy America compliance. Components of the EV charging infrastructure housing—or the protective casing of the electrical components—that are predominantly steel or iron must also be made in the United States, effective March 2023.
The waiver indicates to EV charger manufacturers that they should move quickly to onshore their supply chains by the July 2024 deadline, which means opening and investing in new facilities that build the parts they need to meet Buy America policies. At the same time, it allows U.S. EV charger assemblers ample time to continue to sell infrastructure to generate the resources they need to make those investments.
Revoking the waiver, as proposed by Sen. Rubio’s CRA measure, would remove EV chargers from the umbrella of technologies subject to Buy America policies, eliminating the market signal to the industry and permitting manufacturers to move their supply chains—and the jobs that accompany them—abroad.
Q: Is the FHWA’s market signal working?
A: Research from the BlueGreen Alliance and Atlas Public Policy finds that there are currently 44 manufacturing facilities in the United States dedicated to building EV chargers and their components, amounting to a combined investment of $313 million and approximately 6,000 manufacturing jobs (Figure 1). Of these 44 facilities, 29 of them were announced in the course of the approximately two years since the passage of the Bipartisan Infrastructure Law, which first indicated to the industry that federally-funded EV charging infrastructure would be covered by Buy America policies. FHWA’s waiver provides the industry with essential specificity and clarity about how Buy America policies apply to EV charging infrastructure. The map below shows that the market signal is working. All of these facilities will be essential to meeting demand for Buy America-compliant EV charging infrastructure in the coming years and ensuring that the transition to clean vehicles protects and creates domestic auto manufacturing jobs.
Figure 1: EV Charging Infrastructure Assemblers and Suppliers
Dot size represents scale of investment in dollars.
The Biden administration has been clear: We need the clean technologies of the future to be built in the United States with high quality, community-sustaining, union jobs. We also need historic infrastructure investments to help support the transition to clean vehicles. FHWA’s Buy America waiver for EV charging infrastructure strikes the right balance to achieve both.