Start-up companies are immediately bearing the brunt of the Trump administration’s order to freeze billions of dollars in federal funds for electric vehicle charging.
Many companies were created in response to the Bipartisan Infrastructure Law, which included $5 billion to build EV chargers along the interstate highway system. The money is federally funded but planned for and administered by the states. Now that the Trump administration has rescinded the states’ charging plans, the small business owners and entrepreneurs that formed in response to the program are already feeling the pain.
“We have won all of these sites in all of these states, and not a single dollar has yet to be obligated to our company,” Josh Turner, who is the CEO of PowerUp America, one such company, told NOTUS on Friday evening. PowerUp America, which is based in Tennessee, was supposed to finally begin signing contracts for charging sites across the Southeastern U.S. in the coming months.
The first few years of the $5 billion National Electric Vehicle Infrastructure program rollout had been slow under the Biden administration because states had to submit plans for federal approval, but business began to pick up over the last year once states could sign contracts and issue new rounds of awards.
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“We can’t do anything until the federal government provides that clarity. All of our awards are sitting in standstill,” Turner said.
Meanwhile, larger companies with bigger business portfolios — like Elon Musk’s Tesla — are unlikely to be seriously affected.
“The biggest impact is on the companies that were founded, formed, designed and built specifically to take advantage of the NEVI program and funding. And there are some of those that are potentially in a lot of pain right now,” industry analyst Loren McDonald, who is the chief analyst at EV data services firm Paren, said.
By contrast, Tesla, which is one of the largest recipients of NEVI awards thus far with about $30 million, likely views NEVI as a “nice to have,” Paren said.
The administration’s memo freezing the funds has resulted in mass confusion between state officials and small business owners. Some states have paused nearly all programs except those with shovels in the ground, while others (including Maryland, which confirmed its status with NOTUS) are continuing with every project they define as “obligated.”
Projects that have been “awarded,” like PowerUp America’s, but are not yet under contract, are frozen under the memo as it is currently written.
NEVI was designed to give people confidence that they can drive EVs on long stretches of remote, rural highway without worrying about where to charge next. It did so by subsidizing the construction of charging stations that would otherwise not be financially viable for businesses, since chargers on rural highways don’t get the same demand and aren’t as profitable as ones in metro areas.
So, by attacking NEVI in such dramatic fashion, the Trump administration has hurt the effort to give average consumers confidence in EV range significantly more than it hurt the actual business of EVs and charging, said Abass El-Hage, the CEO of Red E Charge.
“The biggest challenge is just uncertainty, people not knowing and raising questions. It just creates more of a confidence issue,” he said. He’s confident that Red E Charge’s business won’t be seriously affected because the company doesn’t depend on the NEVI funding in its business plans and isn’t structured primarily around rural charging.
But the NEVI freeze has exposed the vulnerability of smaller companies under Trump’s anti-EV regime. Red E Charge has been awarded about $18 million through NEVI to build chargers, while PowerUp America has so far been allocated about $10 million, according to Paren data. That $18 million is just a small drop for Al-Hage’s company, but the $10 million is nearly the whole business proposition for Turner.
The legality of the Trump administration’s memo is already under scrutiny. The courts have already blocked efforts to freeze all federal grants and loans, but this freeze is structured somewhat differently: It’s written under the guise of the federal government revisiting guidance for the charging program.
The government is entitled to revisit and rewrite that guidance, according to Andrew Wishnia, a former Biden administration official who was also one of the primary authors of the NEVI program. But the Trump administration is likely violating several laws by rescinding state plans that have already been approved, he said.
Wishnia said the administration did not follow any identifiable legal process for rescinding the funds, citing the law’s text, which does not outline any process to rescind already approved plans unless states violate their own plans.
But ahead of any possible legal action, the consequences for companies like PowerUp America are more than just frozen projects.
The state of Georgia informed Turner Friday evening that upcoming awards under the program, which his company had applied for, would be delayed indefinitely. Louisiana, where Turner was preparing to submit proposals, has also frozen projects.
At the same time, Turner said he is optimistic that the Trump administration won’t be able to actually prevent the funds from eventually going out. He added that he wouldn’t mind the administration removing some environmental regulations — which would make it easier to build chargers.
“There’s only a certain amount of delays that can be done because these are allocated by Congress,” he said, adding that he thinks that there’s too much economic benefit in red-leaning states in the Southeast for any funds to actually be stopped.
“But if I were in a perfect situation, all of the sites awarded would be allowed to be continued,” he said. “I hope they just don’t halt and restart and wait two years on a site that we’ve already been dragging along for a year on.”
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Anna Kramer is a reporter at NOTUS.
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