ELECTRIC VEHICLES IN ILLINOIS
The pieces are falling into place
The goal for the State of Illinois: 100% clean energy by 2050. How do we get there? In part, by setting another goal of having one million electric vehicles on Illinois roads by 2030.
The question is whether that’s doable. The popularity of electric vehicles in Illinois is growing, but is the industry growing fast enough? As of February 2024, The Secretary of State’s Office reports 96,448 electric vehicles in Illinois. That’s a 51% increase from the number of EV’s registered in February 2023. Counties with the most EVs in January include Cook, DuPage and Lake. Less than five EVs are registered to drivers living in Brown, Calhoun, Gallatin, Hardin, Henderson, Jasper, Pope, Pulaski, Schuyler, and Wabash Counties.
Hybrid vehicles are already a hit because of how much they save drivers in gas money while offering the unlimited range of a gas- powered car, and their relative affordability compared to completely electric cars.
Numbers compiled by the National Renewable Energy Laboratory with data from Experian Information Solutions show that as of 2022, Illinois had the 6th-highest number of hybrid vehicles on the road — 244,100, following California, Texas, Florida, Washington state and New York state.
There is an incentive for drivers considering making the leap to an all-electric vehicle in the form of tax rebates so that may be spurring the increase, but the rebates are limited and aren’t available to everyone
who purchases an EV. There’s also a federal tax credit of up to $7,500 for qualifying buyers and vehicles, although the list of eligible vehicles was cut by more than half on January 1st because of tightened rules regarding battery sourcing, price and where the vehicle was manufactured. The new requirements are designed to entice auto makers to get parts and produce cars in the U.S. The good news is that buyers can now use the federal credit at the time of sale, essentially giving them cash on hand instead of having to wait for the following year’s tax return.
Besides getting more zero-emission vehicles on the road, the state is working to make Illinois a manufacturing hub for EVs and EV components.
Illinois logged some big wins in 2023, landing new companies and seeing others expand.
Driver Incentives
A buyer incentive program was created under the Climate and Equitable Jobs Act (CEJA), which was signed into law in the fall of 2021. It offers a $4,000 rebate for the purchase of an electric passenger vehicle and a $1,500 rebate for the purchase of an
electric motorcycle. To qualify, the EV must be bought from a licensed dealer in Illinois and under state law, priority for the rebates is supposed to be given to lower-income drivers.
Company incentives — REV Illinois
In November 2021, the Governor signed the Reimagining Energy and Vehicles in Illinois Act (REV Illinois) in hopes of jumpstarting the state’s EV industry. It created incentives designed to attract and retain businesses in the clean energy sector, create new jobs, push companies to invest in continued employee training and build a strong, skilled workforce in the renewable energy field. Eligible companies include those that manufacture EVs and chargers, supply parts for EVs and more.
Some of the incentives listed on the state’s electric vehicle website include:
Businesses are Responding
TCCI
The first company to take advantage of the REV Illinois program was TCCI Manufacturing in Decatur. In 2022, TCCI secured a credit worth more than $2.1 million. TCCI specializes in compressor manufacturing and began developing electric compressors for EVs in 2018.
In August of 2023, TCCI broke ground on a new EV Innovation Hub in Decatur. The hub is a partnership with Richland Community College and the Illinois Department of Commerce and Economic Opportunity. It includes the Climatic Center for Innovation and Research — a state of the art research and development initiative as well as a new electric compressor production facility — one of the first in the U.S. A third important component of the hub is the EV Workforce Academy, which will provide students with an immersive learning experience, working side-by-side with industry experts in a real- world setting. The goal is to prepare the next generation for a career in electric vehicle manufacturing.
The REV incentives and $21.3 million in capital grants that were appropriated to the City of Decatur and Richland helped fund the project. In return, TCCI is making at least a $20 million investment in its Decatur facility, retaining 103 jobs and creating 52 new jobs in five years.
Lion Electric
Another big development came in July, when Lion Electric in Channahon opened a 900,000 sq. ft. facility, making it the largest all-electric U.S. plant dedicated to medium and heavy-duty commercial vehicle production. At full scale, the plant has an estimated production capacity of 20,000 vehicles per year, including both buses and trucks. The company says production will require around 1,400 skilled workers.
Lion is the first company in Illinois to make electric buses, including school buses and urban transit buses. Argonne National Laboratory and Joliet Junior College are partnering with Lion on research programs and workforce training. The company says that transitioning to all-electric vehicles will lead to major improvements in society, the environment and overall quality of life.
Prysmian Group
A week later, with Comptroller Susana Mendoza and Governor JB Pritzker on hand, the Prysmian Group announced plans to expand its facility in DuQuoin. This nearly $64 million investment includes 100,000 sq. ft. of new space and will create 80 new manufacturing jobs, expanding the plant’s workforce by one third. Prysmian Group makes cables for electric vehicles and charging stations as well as for other clean energy equipment. REV Illinois incentives came into play here, worth nearly $15 million and carrying an expectation of Prysmian retaining about 225 jobs.
“Illinois welcomes you and your expansion with open arms,” said Comptroller Mendoza at the event. “We’re proud to be a part of your world class operation that includes 50+ countries. It’s a reminder that Southern Illinois has an important role in the global economy.”
In September, Gotion announced plans to locate its new state-of-the-art $2 billion electric vehicle lithium battery manufacturing plant in Manteno. Governor JB Pritzker has said it’s the largest new plant coming to Illinois in 30 years. Again, incentives provided by the REV Illinois program helped shore up the deal. REV and other incentives are valued at $536 million, including a tax benefit totaling $213 million over 30 years. As part of the agreement, Gotion pledged to make a company investment of at least $1.9 billion and create 2,600 full-time jobs that are paid at least 120% of what workers in similar jobs in Kankakee earn.
Gotion is also the first recipient of Invest in Illinois funding, worth $125 million in capital dollars. This is part of a “closing fund” approved early last year for the state to use to further entice companies to come to Illinois. The company was also granted property tax abatement for 30 years by local leaders. The plant is expected to begin production this year, producing 10 gigawatt- hour (GWh) of lithium-ion battery packs and 40 GWh of lithium-ion battery cells. Gotion says this will bolster the EV battery supply chain in the U.S. The site will cover about 150 acres.
EV Box
Then in late October, EVBox, based in Libertyville, launched its new DC fast charger. The Illinois-built Troniq Modular charging station can charge multiple EVs at once, reducing wait times for drivers. The company says their target audience is businesses looking to invest in EV charging infrastructure and maximize their revenue stream.
Stellantis
A big turnaround for Illinois was the Belvidere Assembly Plant, owned and operated by Stellantis North America. It opened in the 1960’s but had been on the decline in recent years. The plant was idled on February 28, 2023, indefinitely furloughing about 1,300 workers. The last vehicle to be produced there was the Jeep Cherokee. That same day it was announced that the company would be investing $155 million into three plants in Kokomo, Indiana to produce electric drive modules, which help power EVs. Ironically, Stellantis said shuttering the Belvidere plant was necessary in part because of the increased cost of the electrification of the auto market. Other reasons given were the COVID-19 pandemic and chip shortage.
The State of Illinois stepped in to help the workers and to try and find a new opportunity for the plant. New hope for the facility emerged during last year’s United Auto Workers strike. The labor dispute involved the UAW and three automakers: Ford Motor Company, General Motors and Stellantis.
The strike began in September and one point of contention besides wages, overtime and retirement benefits was the closure of the Belvidere plant. Negotiations concluded with an agreement, which according to the UAW includes a nearly $5 billion dollar investment by Stellantis into the plant. Starting in 2027, Belvidere will produce a mid-size truck on two shifts and Stellantis will locate a new EV battery plant in the city as well as a “megahub” for parts distribution. It’s estimated this will at least double the Stellantis workforce in that area.
Rivian
Illinois is already home to Rivian, which acquired the former Mitsubishi plant in Normal in 2017. There the company builds electric trucks and SUV’s. In late October 2023, Rivian announced that all vehicles manufactured at the Normal plant would get their initial charge solely from wind and solar power. The R1T truck and the R1S SUV retail for more than $70,000. Just this month, Rivian announced that its new SUV, the R2, will be manufactured at the plant in Normal.
Wieland North America
In January, Wieland North America announced a $500 million investment in modernizing its East Alton facility, which is one of six in Illinois. The expansion retains 800 jobs across the state and will help the company boost production of copper and copper alloy components that are used in EVs and charging stations. The REV program played a role here and is part of an estimated $231 million dollar incentive package awarded Wieland by the state.
Other Incentives
Besides REV Illinois and the Invest in Illinois programs, the state has awarded other incentives such as grants to build EV charging infrastructure. Back in June, the IEPA awarded $12.6 million in grants for public, light-duty charging stations.
The money went to 10 applicants, funding 348 new Direct Current Fast Charging ports at 87 locations across the state. Sites include gas stations in Champaign, Cook, Sangamon and DuPage counties, truck stops in Madison, Will and St. Clair counties and hotels in Winnebago, DeKalb, Lake and McLean counties. Funding comes from Illinois’ portion of a federal settlement with Volkswagen over clean air violations with some of its diesel vehicles.
There are other programs under the state’s Driving a Cleaner Illinois initiative, with funding for charging systems available periodically.
The federal government also has several incentives including the Clean School Bus Rebate Program and grants for new electric charging stations and alternative fuel corridors. In January, Peoria Public Schools District 150 was awarded a $6 million federal grant for 15 new all-electric school buses.
Some Criticisms
EV rebates
Despite the excitement over the seemingly increasing popularity of electric vehicles, there have been concerns. The two main criticisms are the cost and accompanying limited amount of EV rebates, and whether enough infrastructure will be in place.
The rebates were discussed at an October Senate hearing, where it was pointed out that the public may not know there are only so many rebates available. There reportedly have been problems with people purchasing an EV in Illinois, assuming they will automatically get a credit.
“A lot of people bought electric vehicles hoping to get some relief from the State of Illinois, it was a big news story, and a lot of my constituents who called in to get those rebates were told that the fund had already expired,” said Senator Steve McClure of Springfield. “I think it’s unfair for people to purchase electric vehicles thinking they are going to get this benefit from the state and then after the purchase is completed, they get no benefit at all.” McClure recommended the state do a better job of letting the public know that not everyone who buys an EV will get a rebate.
Senator Mattie Hunter of Chicago agreed, saying, “the rebate issue is a problem, because it presents a problem for us as legislators because if we did not inject enough money into that rebate program then it makes it look like we aren’t keeping our word.”
IEPA EV Coordinator Megha Lakhchaura responded that public interest in EVs is high, and that the state can’t afford to give everyone a rebate.
Lawmakers on the committee reiterated the need to make it clearer that the state rebates aren’t for all electric vehicle purchases.
Lack of Infrastructure
The other main criticism is a lack of charging infrastructure. According to the U.S. Department of Energy, as of March 10, 2024, there were 1,335 public EV charging stations across Illinois, including 3,449 ports.
The problem is the lack of consistency statewide, and some chargers are limited to only Tesla drivers. Still, Illinois is ahead of the game compared to bordering states.
In January 2024, the state secured nearly $15 million in federal grants to support the expansion of EV charging infrastructure in Illinois. The funding will be used to install electric charging stations in 273 new locations across the state, with an emphasis on disadvantaged communities.
Additionally, The Illinois Department of Transportation (IDOT) awarded $7.1 in federal funds to several communities to repair, replace or upgrade more than 100 ports.
IDOT is currently implementing the National Electric Vehicle Infrastructure (NEVI) program which includes $148 million over five years in federal funding to set up an EV charging network. The focus at first is
on chargers along the interstate highway system, creating EV “corridors.” And the agency’s latest EV Infrastructure Deployment Plan was approved by the Federal Highway Administration this past fall. IDOT has been gathering public input on an interconnected charging system for the state.
Under the plan, charging stations must provide a quick charge, have at least four ports, be no more than 50 miles apart and less than one mile from the highway.
According to the document, Illinois has 558 EV corridor-ready miles and 1,963 EV corridor-pending miles.
Battery disposal
Other issues include the disposal of EV batteries. In that same Senate hearing, Senator McClure asked “what do you do with the batteries once they no longer function?” Illinois Department of Environmental Protection Agency (IEPA) EV Coordinator
Megha Lakhchaura said it’s a very important question, and that more research nationwide is needed to see how the battery or parts of the battery can be recycled.
“It’s a problem that the world is facing in how to grapple with it and it’s going to grow in enormities,” Lakhchaura said.
Winter
Another battery related issue surfaced in January when frigid temperatures hit the state. The cold weather reduces the efficiency of EVs, so you can’t drive as far, and some drivers reported completely dead batteries and chargers, or charging stations taking hours to power up their vehicles.
Lost tax revenue
There’s also the matter of the state and local motor fuel taxes, which EV users don’t pay since they aren’t purchasing gas. Additionally, drivers with hybrid vehicles aren’t using as much fuel. That means less money is coming into the state for transportation projects like building and maintaining roads and highways.
In a January 2023 policy brief from the Illinois Economic Policy Institute, the group determined that “state transportation revenue will be negatively impacted as the state aims to have one million EVs by 2030 and fuel efficiency continues to increase.”
In its report, the Institute recommended policymakers look into raising the EV annual registration fee and implementing a hybrid registration fee.
Between 2021 and 2030, it is estimated that Illinois will lose $765 million from transitioning to EVs over traditional vehicles. The combined loss of state and federal revenue is $1.1 billion.
Between 2021 and 2030, it is estimated that Illinois will lose $3.3 billion from increased fuel efficiency of light-duty vehicles, taking into account increased EV and hybrid use. The combined loss of state and federal revenue is $4.3 billion.
The state already charges more for vehicle registration for drivers with an electric vehicle. Starting in 2020, EV owners were charged an extra $100. It could be worse… there was legislation back in 2019 that would have raised the EV registration fee to $1,000.
Another suggestion is a kilowatt-per-hour tax. According to the nonpartisan policy group the Tax Foundation, at least six states have recently passed laws implementing a tax at charging stations. This requires chargers to have a meter measuring the kilowatts used. Some of these states have levied a 3¢ per kilowatt-hour tax. The idea is to generate a revenue stream for transportation projects just like the motor fuel tax. The problem here is that this tax is only levied at public charging stations, and most drivers reportedly charge their EVs at home.
Additionally, the Infrastructure Investment and Jobs Act of 2021 required the U.S. Secretary of Transportation to establish a Vehicle-Miles-Traveled (VMT) Fee pilot program. That hasn’t happened yet, but the idea isn’t new to Illinois. In 2016, then- Senate President John Cullerton suggested charging drivers 1.5 cents per mile via a vehicle transponder but quickly shelved the proposal after much public opposition. Similar plans have emerged periodically including a House bill in 2018 that set up a trial VMT program but that was also dismissed.
Reliability and other factors
Consumer Reports Annual Auto Reliability Survey released in November 2023 found that there are more complaints about most EVs and hybrids compared to traditional gas-powered cars. The survey gathered data on more than 333,000 vehicles from model years 2000 to 2023, and a few 2024’s as well. Some common complaints included issues with the battery and charging the vehicle Electric pickups were found to be the least reliable.
According to the report, hybrids have 26 percent fewer problems than gas vehicles, but plug-in hybrids and EVs are more troublesome. The report says that EVs have 79% more problems than gas powered vehicles and plug-in hybrids have a whopping 146% more problems than gascars.
Auto dealers are also sounding an alarm. A group of nearly 4,000 car dealerships nationwide, including more than 170 in Illinois, sent a letter to President Biden on December 1, 2023, expressing concerns about proposed EV regulations. Dealers say while they are selling electric vehicles, sales aren’t keeping up with the pace of EVs arriving at their lots. They are asking the President to ease up on any proposed EV mandates.
The hesitancy seemed apparent on January 2nd when Rivian announced that its plant in Normal produced 17,541 vehicles during the fourth quarter but delivered less than 14,000 to customers during that time. Rivian’s report showed a continued increase in production last year, but deliveries dipped in the last few months. This caused stock prices to drop more than 9% on the first day of trading in the new year.
Laws
The Illinois Legislature has been looking ahead to the future of electric vehicles. A law signed in June of 2023 requires new homes and multi-resident buildings to include the basic infrastructure for EV charging.
The goal of the law is to increase access to charging stations, since some areas are considered “charging deserts” with little to no infrastructure to power up EVs. That’s especially true in rural areas. Supporters also say it’s much less expensive to put in chargers when a home or building is ready to be equipped with the chargers.
When the legislation passed the Senate in March of 2023, bill sponsor, Sen. Sara Feigenholtz of Chicago stated in a press release “electric vehicle adoption is growing dramatically, but many people don’t have access to charging stations at their home parking spaces, including the one-third of Illinoisans who live in multi-family housing. This bill establishes a path for new housing to be constructed with infrastructure for EV charging stations in mind, so more renters and condo owners have EV charging access in their homes.”
The law also lets landlords charge drivers for the electricity used to charge their car.
During the fall veto session, lawmakers passed a bill requiring newly purchased or leased state vehicles to be zero emission by 2030. This would not apply to law enforcement vehicles or some of the vehicles in the Illinois Department of Transportation’s fleet. The Governor signed the bill into law in December.
New legislation has been introduced for consideration during the spring session. HB 4209 authorizes the Illinois Department of Natural Resources to set up EV charging stations and charge a user fee at state parks.
A couple of bills have also been introduced recently to adopt the strict emission standards that California has enacted. Those standards essentially ban the sale of new gas-powered vehicles starting in 2035. Governor Pritzker has said he does not support an Illinois version, preferring instead to incentivize drivers to go all electric.
SB 2634 requires the IEPA to create a Fleet Electrification Incentive Program. It would provide fleet owners and operators grants to promote use of eligible EVs.
Education
Governor Pritzker and Comptroller Mendoza have repeatedly said that one big draw for companies to come to Illinois is the state’s highly skilled workforce. With more EV vehicle and parts manufacturers setting up shop here, public and private partnerships have been formed to make sure interested students learn all they need to succeed in the field.
This includes a program at Heartland Community College in Normal, where students can earn an Associate of Applied Science degree in Electric Vehicle Technology. It’s billed as a first-of-its-kind training program and courses focus on everything from braking systems to battery technologies.
This is run with local automaker Rivian and includes an EV Lab and the Manufacturing Training Academy. New construction and upgrades were done on campus and a ribbon cutting ceremony was held last month.
There’s also the previously mentioned Climatic Center for Innovation and Research, a partnership between TCCI and Richland Community College which will include a training program, as well as Lion Electric’s partnership with Argonne National Laboratory and Joliet Junior College.
Additionally, the Illinois Green Economy Network, a consortium of community colleges, has developed clean energy education and the state’s Climate and Equitable Jobs Act includes a workforce training component.
Even younger students are getting a taste of the field. In August, ComEd awarded $250,000 to expand electric vehicle education in high schools. The grants are part of the utility’s EVs for Education program, which has handed out nearly one million dollars in grants to 19 high schools in Northern Illinois since it was launched in 2019. Schools use the money to add at least one EV and one EV charger to their driver’s education curriculum.
Looking ahead
In that Senate hearing in October, there was a brief discussion about the future of electric vehicles. While they are still pretty new and the infrastructure to support a cross country trip isn’t there yet, there may be some exciting developments on the horizon. IEPA EV Coordinator Megha Lakhchaura mentioned a few possibilities, including dynamic charging, or so-called electric roads. That’s where wireless infrastructure under the asphalt transmits electric power to a responder in an EV. This would eliminate worry about making it to the next charging station. The first stretch of electric road in the U.S. opened in December in Detroit, spanning a quarter mile to see how well the technology works.
EV mandates are being considered at the federal and state level. Last spring, the U.S. EPA proposed an aggressive mandate, requiring two thirds of all passenger cars sold to be all electric by 2032. New emissions standards are also being considered. There’s opposition though, with critics saying these mandates are unattainable. In December, the U.S. House passed the “CARS” Act, prohibiting the EPA from limiting a consumer’s vehicle choice. It will likely be a symbolic gesture as the Democratic-controlled U.S. Senate isn’t expected to take up the legislation.
Other states are imposing their own mandates, with California having the most aggressive EV/emission laws in the country. Jaguar has announced the company will only offer EVs starting in 2025. Chrysler pledges to do the same by 2028 and Buick and Cadillac by 2030.
Public transit agencies and school districts are also making a push to go green. The Chicago Transit Authority aims to be fully electric and have supporting infrastructure by 2040 and in 2022 the Troy Community Consolidated School District received an award from Levo Mobility LLC to help replace the district’s full fleet of 64 school buses with all-electric versions in as little as five years. The partnership has been billed as the largest zero-emission school bus fleet conversion program in the Midwest and includes the planning and construction of needed infrastructure. Awards like these along with state and federal grants are helping government agencies make the switch over time.
While a consistent network of charging stations and the cost of purchasing an electric vehicle remain challenges that still must be tackled, Illinois does seem to be making strides in establishing a well-trained EV workforce and attracting companies that handle production and EV parts.
At a November luncheon with Crain’s Chicago Business, Governor JB Pritzker said, “there is not an EV company in the country that hasn’t talked to me and I’m very happy about that. Some of them are inbound calls, some of them are outbound calls.”
The Governor reiterated that optimism at an event in Bloomington in early December, saying, “You’ve just seen recently the announcement of a big battery factory in Manteno, a battery factory and an assembly plant coming to Illinois as a result of the settlement of the UAW strike and the work that we’ve done with Stellantis.
“I can tell you that we have literally a dozen more that are in the category of electric vehicles along with a dozen more on top of that in other categories.”
EVs are better for the environment and generally cost less to operate, but are the hurdles too big to overcome? Only time will tell if we can hit the state’s goal of one million electric vehicles on the road by 2030 — just a short six years away.
