Analysis: Diesel at Risk Despite Hit to U.S. EV Chargers


   
Barani Krishnan
DTN Refined Fuels Market Reporter

   SECAUCUS, NJ (DTN) - The U.S. highway charging network for electric vehicles 
(EV), deemed a threat particularly to diesel demand, has been fragmented by 
federal policy overhauls aimed at protecting fossil fuels. But diesel refiners 
and distributors are still at risk as states aggressively pursue 
electrification plans.

   The stalling of the highway charging network project pushed by the Biden 
Administration began with an executive order signed by U.S. President Donald 
Trump in January that froze the National Electric Vehicle Infrastructure (NEVI) 
Formula Program. This project has dedicated $5 billion to building 
fast-charging corridors along major U.S. highways.

   The freeze, lasting several months, led to lawsuits from more than a dozen 
states, including California, New York and Illinois.

   In August, the Department of Transportation (DOT) unveiled revised NEVI 
guidance, allowing states to resume accessing funds for the EV corridor. 
However, the new rules removed the requirement for charging stations to be 
spaced every 50 miles.

   The DOT stated that the goal was to allow states to build charging 
infrastructure independently instead of a federally mandated corridor map.

   Two-Speed System for EV Chargers

   That led to a 'two-speed system' for the highway charging network -- a 
market divergence where "fast-track" states with strong EV mandates, like 
California, continue rapid deployment, while "slow-track" states deprioritize 
charging infrastructure in favor of traditional fossil fuel support.

   Pennsylvania announced by September that it had achieved "full build-out 
certification" for its core corridors -- a regulatory milestone that allows it 
to spend on projects beyond just major highways. As of October, over 121 
NEVI-funded stations were operational across 16 states, and new charging sites 
began to take shape despite federal uncertainty.

   But the EV charging community was hit by a new surprise in November by 
another Trump executive order that imposed a 25% tariff on imported medium- and 
heavy-duty vehicle parts, which had a secondary but significant impact on 
highway charging.

   Large-scale charging hubs designed for commercial trucks -- which require 
massive transformers and specialized components often sourced globally -- were 
also hit by other tariff-related price spikes in charging hardware.

   Several states reported in late November that private contractors were 
pausing bids largely because of tariffs that made the 80% federal cost-share 
insufficient to cover rising equipment costs.

   For many regional EV charger projects, the math for federal cost-sharing 
"essentially broke" with the new tariffs, noted Emil Koenig, senior research 
analyst at Wood Mackenzie. He was referring to the 80% federal cost-share that 
was no longer enough to cover the inflated equipment costs.

   Some states also reported that DOT had stopped approving new funding for the 
Charging and Fueling Infrastructure discretionary grant that had billions of 
dollars left in unallocated NEVI funding.

   While the federal actions had fragmented the charging network that would be 
the backbone for the conversion of regular trucks to electric, the diesel 
market hasn't been spared of anxiety.

   For companies involved in diesel refining and distribution, the uneven pace 
of construction in the highway charging network means a risk of not knowing 
which highway corridors might suddenly see a spike in charging facilities.

   Diesel Still at Risk 

   Eliminating the threat of "range anxiety" --the fear that an electric truck 
will run out of power before reaching a destination -- has always been a focus 
of the EV industry.  That target is now concentrated geographically as states 
like California and Georgia continue pushing their EV agendas aggressively 
despite the crippling of many Biden-era incentives.

   The California Energy Commission, the lead state agency overseeing 
investments in electric vehicle charging infrastructure, is deploying up to 
$100 million annually through its Clean Transportation Program to support 
cleaner transportation and alternative fuels. The state also has set goals of 
placing 1.5 million zero emission vehicles on California roads by 2025 and 5 
million by 2030. These targets would ultimately require a streamlined charging 
network.

   Georgia is utilizing $135 million in NEVI funds secured earlier to develop 
"Alternative Fuel Corridors" along major interstates to support commercial EV 
adoption. The Georgia State Transportation Board announced on November 20 that 
it has approved $24.4 million for 26 new charging locations, signaling that the 
Southeast's momentum remains unphased by federal shifts.

   The diesel market is also at risk from private sector initiatives like 
Hyundai's plan to start by 2030 construction of body-on-frame midsize pickup 
trucks at its $7.6 billion Metaplant America in Bryan County, Georgia.

   By producing midsize electric pickup trucks and deploying hydrogen fuel-cell 
heavy-duty trucks for its own logistics, Hyundai is reducing the captive diesel 
demand usually generated by manufacturing and regional freight. This represents 
a structural shift: as the vehicles moving goods become electric, local demand 
for diesel supply inevitably shrinks.

   In California, diesel is 33% more expensive than the national average at 
$4.71 gallon, providing a powerful cost advantage for commercial fleets that go 
electric. Cost-per-mile for a typical heavy-duty truck in California is $0.74 
for diesel and $0.50 for electric, state data shows.  

   In Georgia, diesel is 1.6% below the national average at $3.55 per gallon, 
yet cost-per-mile of a typical heavy-duty truck is $0.55 for diesel and $0.22 
for electric.

   California distillate inventories are roughly 4% lower than a year ago but 
that is mainly due to the permanent conversion of major facilities like the 
Phillips 66 Rodeo refinery to renewable diesel rather than demand. Diesel 
stockpiles in Georgia are nearly 6% higher year-on-year, driven by a regional 
supply imbalance where cooling industrial demand has allowed stocks to build up 
despite stable import levels from the Gulf Coast.

   In summary, the elimination of diesel refiners' anxiety over EV corridor 
deployment will depend increasingly on state action, private-sector commitments 
and market dynamics, even with the federal agenda to protect fossil fuels.




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