Demystifying BABA/NEVI for e-mobility infrastructure: how to capitalize on infrastructure investment

Dave Kaminski

As the world becomes more sustainable and electrified, people around the world are looking for ways to reduce their impact on the environment. One of the major ways consumers are looking to encourage a more sustainable future is through the use of electric vehicles (EVs). EV technology has improved dramatically over the last decade, and adoption continues to grow. The International Energy Agency estimates that by 2030, 50% of the cars sold globally will be EVs. However, it is common knowledge that the biggest issue standing in the way of widespread EV adoption isn’t the production of vehicles themselves but in the development of supporting infrastructure.

With this in mind, many governments around the world have introduced funding programs and incentives to support the expansion of EV infrastructure. This includes $7B in funding in the United States (U.S.) under the Build America, Buy America (BABA) and National Electric Vehicle Infrastructure (NEVI) programs. These programs are still relatively new, and many manufacturers are trying to figure out how to take advantage of this funding to grow their businesses alongside America’s sustainable and electrified infrastructure. 

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What is BABA/NEVI?
BABA and NEVI are a pair of programs designed to encourage and fund sustainable infrastructure investments that support the American economy. BABA is a part of the 2021 Infrastructure Investment and Jobs Act and sets expectations that contractors using government funding for infrastructure projects must use iron and steel products, manufactured products, construction materials, and Section 70917 © materials that are manufactured in the U.S. Each of the four categories has a set domestic content criteria which must be met or exceeded to comply. NEVI is more specific to the EV industry, and “provides funding to states to strategically deploy electric vehicle (EV) charging stations and to establish an interconnected network to facilitate data collection, access, and reliability.” NEVI is administered by the Federal Highway Administration (FHWA).

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These two programs work together to offer significant funding for EV infrastructure projects in the U.S., as long as they use manufactured product, and construction materials manufactured in the U.S. of primarily domestic sourced materials, and iron, steel, or predominantly iron and steel products which have U.S. produced, from melting to finish process, iron and steel.

What are the requirements under BABA/NEVI?
BABA requires manufactured products and construction materials to be manufactured in the U.S. and have a minimum of 55% domestic content. NEVI imposes more rigorous requirements that mandate American-made materials further down the supply chain. Projects that are leveraging NEVI programs require all the manufacturing processes on iron or steel products or components to be performed in the United States. This includes using U.S.-made U.S.-sourced steel and manufacturing subcomponents in the U.S. Public EV infrastructure projects seeking government funding will need to follow both BABA and NEVI, but any projects that are NEVI compliant will also meet the threshold of BABA.

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It is important to remember that not all EV projects fall under NEVI. In addition to regulating where materials, components, and final products are produced, NEVI also specifies which kinds of projects are eligible for funding. For charging projects to fall under the program they need to be publicly accessible (such as service stations, roadways, and retail) and accept open access payments. They also need to be located in areas that states have designated for alternative fuel projects. This is to encourage the creation of extended corridors where EV drivers can expect to find charging options along their trip, as opposed to isolated pockets of charging stations around the country. Fleet vehicle electrification projects, while a major driver of decarbonization and EV adoption as a whole, do not fall under BABA/NEVI since they are not accessible by the public.

For eligible projects, BABA and NEVI apply to all components of EV installations, not just the parts consumers can see. That means that inverters, transformers, battery enclosures, and connection solutions must be compliant, not just charging pedestals.

How should companies approach BABA/NEVI compliance?

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Manufacturers should view BABA/NEVI as an opportunity to contribute to the electrification of America and a more sustainable future, while supporting U.S. job creation. With the investments being made in EV infrastructure under BABA/NEVI, there are many opportunities for U.S. manufacturers to grow alongside EV infrastructure expansion.

One thing manufacturers need to remember is that the specifics of the BABA and NEVI programs are essentially guaranteed to change over time. Becoming familiar with these regulations once is not enough—manufacturers need to keep an eye on changes and make sure they have the proper controls in place to adapt as needed. Good supply chain management and data governance are also critical. Manufacturers need to have a window into exactly where their raw materials and subcomponents are being produced all the way through their supply chain. Manufacturers that provide subcomponents to NEVI projects need to be ready to answer questions and provide documentation to their customers when needed.

BABA and NEVI may seem intimidating, but it is worth the effort for manufacturers to explore developing compliant products to take advantage of the government funding available and support the growth of clean energy infrastructure in the U.S.

About the Author: Dave Kaminski is the Automotive and E-mobility vertical growth leader for nVent, a global leader in electrical connection, protection, and cooling solutions. Dave takes great pride in developing products and solutions for new market opportunities. He is a graduate with a B.A. in communications from the University of Mount Union in Alliance, OH. Prior to nVent he spent over 15 years in Industrial Lighting and Controls.  In his spare time, he enjoys kayak fishing, cooking BBQ, and playing with his dog, Tobin. He also volunteers as the marketing coordinator for the Northern Ohio Chapter of the Surfrider Foundation.