2021 Minnesota Legislative Priorities: Electric Vehicles

Drive Electric Minnesota has been working hard to pass supportive electric vehicle (EV) policy during the Minnesota 2021 legislative session, which began on January 5. Our policy agenda supports actions that could increase EV adoption in the state: financial incentives, investment in utility EV programs, EV infrastructure expansion, growth of EVs in state fleets, and more. It also includes a priority to keep EV taxes low since EV owners already pay their fair share of road maintenance through a combination of Motor Vehicle Sales Taxes and registration fees—an important priority as there have been several proposals this session aiming to increase the fee.  

As we continue to pass supportive policy in the state, we are thankful for the efforts of our coalition members that strengthen our advocacy work. The policy statements below reflect member priorities for the 2021 legislative session and are supported by the following members:

American Lung Association in Minnesota
Connexus Energy
Dakota Electric Association
Elk River Municipal Utilities
Fresh Energy
General Motors
Great River Energy
Minnesota Electric Vehicle Owners
Minnesota Municipal Utilities Association
Minnesota Power
Otter Tail Power Company
Plug In America
Shift2Electric
Xcel Energy
ZEF Energy

2021 Policy and Regulatory Positions for Increasing Electric Vehicle Adoption in Minnesota

Legislative Action:

• Offer an EV purchase incentive. A challenge in encouraging EV adoption is higher purchase price, despite much lower fuel and maintenance costs. Recognizing the economic, energy security, and environmental benefits of EVs, twenty states are advancing sales through financial incentives according to data from the US Department of Energy’s Alternative Fuels Data Center. These include tax credits, sales tax relief, or rebates. Studies of similar policies in other states make clear that this approach is effective in increasing EV sales. Drive Electric Minnesota supports rebate programs and other financial incentives to catalyze increased sales and supports phaseout once the technology matures and upfront costs come down.

• Encourage utility investment in EV programs. Electric utilities can support increased adoption and beneficial integration of EVs into the electric system to benefit their customers. Several studies, as noted in the Great Plains Institute’s Analytical White Paper: Overcoming Barriers to Expanding Fast Charging Infrastructure in the Midcontinent Region, demonstrate that public charging infrastructure availability can accelerate adoption of EVs. Utilities, in partnership with charging companies, state and federal government, automakers, and other partners, can work to close the infrastructure gap. They are a trusted source of information about charging solution choices, have established relationships with their customers, and can communicate and educate on the benefits of EVs. Drive Electric Minnesota supports legislation making clear that investment by investor-owned electric utilities, along with continued private investment in EV charging infrastructure and promotion, benefits vehicle owners and utility customers.

• Fair EV tax. According to analysis by the Great Plains Institute, EV drivers contribute more to the Highway User Tax Distribution Fund than drivers of equivalent gasoline-powered vehicles through higher motor vehicle sales tax and tab fees based on the currently higher up-front cost of EVs. Furthermore, any EV tax should reflect, like the gas tax, the higher fuel efficiency of EVs. Over-taxing EVs today will discourage adoption and slow the development of this new market. Drive Electric Minnesota supports comprehensive solutions to roadway funding challenges and calculation of fair vehicle taxes that takes into account the fuel efficiency of EVs and vehicles of varying efficiency levels.

• Increase EV adoption through a Minnesota clean fuels policy. EVs are powered by electricity, which is a low carbon fuel in existing clean fuels policy markets. Clean fuels policies work to decarbonize the transportation sector by incentivizing fuels and technologies with lower carbon intensities than the baseline standard. Modeling conducted by the Great Plains Institute, shown during its “Part 2—Benefits for Electric Vehicles in a Midwestern Clean Fuels Policy” webinar, indicates that a light-duty EV could generate up to $6,000 and a heavy-duty EV could generate up to $200,000 in credit revenue over a period of 10 years, depending on the electricity grid mix and vehicle type. In existing markets in California and Oregon, credits earned by fleet managers and utilities have played a critical role in building out additional EV infrastructure, increasing EV adoption, and offering EV rebates to residential customers. A Minnesota Clean Fuels Policy could similarly move the needle toward increased EV adoption. Drive Electric Minnesota supports the adoption of a Minnesota Clean Fuels Policy.  

Administrative Action:

• EVs in state fleets: EVs make economic sense for fleets through reduced fuel and maintenance costs over the vehicle life and will help to meet state goals. Minnesota has a goal, established through executive order, of 30 percent reduction in state fleet consumption of fossil fuels, and 20 percent of state vehicles being electric, by 2027. By purchasing EVs for fleets, state and local governments can move the needle toward accomplishing these goals. Additionally, having EVs on the state contract supports availability of EVs at more dealerships and makes it easier for local governments to procure EVs. Drive Electric Minnesota supports the adoption of EVs by state and local government fleets and the efforts of state agencies to continue working toward achieving state goals.

• Electric transit buses: Metro Transit has committed to increasing the adoption of electric buses and has already purchased electric buses for one bus line. New Flyer manufactures electric buses in St. Cloud and Crookston and employs nearly 1,200 Minnesotans. Electric buses can benefit communities throughout the state through lower emissions, improved air quality, and manufacturing jobs. Drive Electric Minnesota supports increased purchasing of electric buses for transit statewide and increased electric bus manufacturing in the state.

• EV infrastructure: The Minnesota Pollution Control Agency has made strong commitments to invest funding from Appendix D of the Volkswagen settlement to increase public EV charging stations in the state. Drive Electric Minnesota supports investment by the state, through the Volkswagen settlement and other sources, in making public EV charging stations available to all Minnesotans.

• Regional collaboration on EV corridors: To assist in increasing the adoption of EVs in the state and providing convenient travel to neighboring states, Drive Electric Minnesota recognizes the critical roles that completing EV corridors can play in enabling travel throughout the region and beyond Minnesota’s borders. Drive Electric Minnesota supports regional collaboration with the private sector and among Midwestern states to build out EV charging corridors.

Our coalition is working to achieve a successful legislative outcome, and we look forward to continued progress for the remainder of the legislative session.  

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