Behind EV Push, a Wealth Transfer From Red to Blue Regions

Behind EV Push, a Wealth Transfer From Red to Blue Regions
(Illustration by The Epoch Times, Getty Images, Shutterstock)
April 04, 2024
April 09, 2024

President Joe Biden’s new electric vehicle (EV) mandates will likely cause a sizable wealth transfer from rural red regions of the United States to urban blue sections, and to wealthy Democrats who reside in them, according to reports.

On March 20, the Environmental Protection Agency (EPA) finalized its tailpipe emissions rules for the auto industry starting in 2027.

These rules are the strictest in history and will effectively force carmakers to have one-third of new car sales be plug-in EVs by 2027 and more than two-thirds by 2032.

This represents a dramatic increase from current EV sales, which were about 8 percent of the new car market in 2023.

Climate activists cheered the EPA’s move, with the Environmental Defense Fund calling it “a day to celebrate American achievement.”

But critics say that the measures will be particularly punitive for huge segments of the U.S. population who don’t want, can’t use, or can’t afford EVs. If carmakers go along with President Biden’s plan to shift their fleets to EVs, the cost of remaining gas-fueled cars and trucks will likely escalate as demand dwarfs supply.

“This isn’t industrial policy,” Robert Bryce, author and energy analyst, told The Epoch Times. “In reality, it’s a type of class warfare that will prevent low- and middle-income consumers from being able to afford new cars.”

And as many traditional car buyers struggle, the federal subsidies and incentives continue to flow, to the benefit of EV buyers.

According to an October 2023 report by the Texas Public Policy Foundation, as much as $48,000 of the cost of the average EV sold in the United States is paid not by the owner but in the form of “socialized costs” that are spread out among taxpayers and electricity consumers over a 10-year period.

These socialized costs come in the form of taxes, government subsidies, fuel economy credits paid by gas carmakers to EV manufacturers, and higher electricity bills as consumers absorb the capital costs required to expand the power grid and install new charging stations.

The report states that “the average model year 2021 EV would cost $48,698 more to own over a 10-year period without $22 billion in government favors given to EV manufacturers and owners.”

These dollars, which do not take into account the additional dollars that gas-car owners will likely pay for their vehicles as manufacturers are forced to make fewer of them, amount to a government-mandated wealth transfer to affluent EV owners, paid by those who often cannot afford to buy EVs.

“[The mandate is] aimed at accommodating a very narrow segment of the auto-buying public: wealthy, white Democrats who live in a handful of liberal communities,” Mr. Bryce said. “EV ownership is largely defined by class, ideology, and geography.”

Attendees examine Tesla electric cars during an expo in Washington on July 23, 2023. (Photo by Nathan Howard/Getty Images)
In a February analysis of EV buyers, Mr. Bryce reported that 57 percent of them earn more than $100,000 annually, 75 percent are male, and 87 percent are white. In addition, EV buyers are overwhelmingly Democrats, with 71 percent of Republicans stating in a Gallup poll that they would not consider owning an electric vehicle.
A 2023 University of California Energy Institute report found “a strong and enduring correlation between political ideology and U.S. EV adoption.”

Looking at county-level data on new vehicle registrations between 2012 and 2022, the report stated that 50 percent of all new EVs were sold into the top 10 percent of most-Democrat counties, with 70 percent going to the top 25 percent most-Democrat counties, and 90 percent going to the top 50 percent most-Democrat counties.

Twenty counties bought 40 percent of all EVs sold in this period, the report states, and “most of these counties are urban, high-income, and in Democratic states.”

One-third of EV Buyers Live in California

Data from the Department of Energy support this view. As of year-end 2022, California had 903,600 registered EVs in the state, 37 percent of all EVs owned nationwide.

The next largest number of EVs were in Florida, Texas, and Washington state, with 168,000, 149,000, and 104,100 EVs, respectively, followed by New Jersey, New York, Georgia, Colorado, Illinois, Massachusetts, Virginia, Maryland, and Pennsylvania.

The states on this list are home to large cities and suburbs, which are the target market for EVs. This contrasts sharply with rural states such as Wyoming and North Dakota, where 800 and 600 EVs are registered, respectively.

A report by the Committee to Unleash Prosperity reads, “If you count all the EVs in North Dakota, South Dakota, Wyoming, Mississippi, West Virginia, Alabama, Montana, and Idaho, they account for less than one percent of the total U.S. sales.”
A Rivian truck recharges at a charging station during a snowstorm in Truckee, Calif., on March 3, 2024. (Mario Tama/Getty Images)

Of the top 10 states in terms of EV ownership per capita, seven are “deep blue states,” the report notes.

“By contrast, the 10 states with the smallest market penetration for EVs were all red states,” Unleash Prosperity states.

“Ironically, Joe Biden is the worst thing that ever happened to this industry. EVs have become ‘Biden cars.’”

The Biden administration is not alone in attempting to force Americans to switch to electric cars. A number of blue states, including California, Maryland, Massachusetts, New York, Oregon, Vermont, and Washington, are on track to ban the sale of new gas-powered cars and trucks by 2035, according to nonprofit group Coltura, which advocates switching from gasoline to electric cars.
The lack of interest in EVs among red states isn’t merely a political issue, however. There are practical reasons why people are unwilling to spend thousands of dollars more on electric cars. According to a November 2023 AAA survey, the primary reasons people don’t buy electric cars are a lack of charging stations, limited range, and the time it takes to charge the battery.
A recent Rasmussen poll found that 65 percent of Americans surveyed don’t think they’re likely to make an EV their next automobile purchase.
In another poll of voters, only 14 percent said they were strongly in favor of regulations to phase out gas-powered cars and trucks, while nearly 60 percent said they were against them. Opinions split along party lines, with 53 of Democrats in favor of the EPA regulations and 76 percent of Republicans against, with 59 percent of independents also opposing them.

The strongest support for EV mandates came from people earning more than $150,000 a year.

(Top) Rivian CEO Robert 'RJ' Scaringe displays a map of the company's electric charging network at an event in Laguna Beach, Calif., on March 7, 2024. (Bottom) Attendees look at the new Rivian R3 electric vehicle in Laguna Beach, Calif., on March 7, 2024. (Patrick T. Fallon/AFP via Getty Images)

‘Policy Beyond Capability’

A number of industry groups, however, are less enthusiastic.

The Clean Freight Coalition, a trucking trade group that supports a transition away from fossil fuels, said that the timeline set by the new EPA rules was impossible to meet given current technology and infrastructure and that the Biden administration’s EV plan would bring significant harm to commercial vehicle operators, the businesses they serve, and consumers.

Jim Mullen, Clean Freight Coalition executive director, told the Washington Examiner, “Today, these vehicles fail to meet the operational demands of many motor carrier operations, reduce the payload of trucks, and thereby require more trucks to haul the same amount of freight, and lack sufficient charging and alternative fueling infrastructure to support adoption.”

The American Trucking Association said that the targets set out in the EPA’s emissions regulations are “entirely unachievable,” citing similar reasons.

The reliably pro-Democrat United Auto Workers Union (UAW) initially opposed the EPA mandate, fearing a loss of jobs because EVs require fewer American workers to assemble components that often originate in China and because many of the new EV assembly plants being built by carmakers are in non-union states such as Tennessee, Georgia, and Alabama.

The UAW came around to supporting the EV plan, however, after the EPA adjusted its regulations to slow the pace of the transition.

The Biden administration’s barrage of climate-related energy and automotive mandates, critics say, fall into a category of what a recent report by the Cato Institute calls “policy beyond capability.”
President Joe Biden speaks at the General Motors Factory ZERO electric vehicle assembly plant in Detroit on Nov. 17, 2021. (Nic Antaya/Getty Images)

“The history of environmental regulation consists of ambitious unrealistic goals followed by missed deadlines and lack of enforcement,” the report states. It cites numerous examples, including a 1970 attempt in California to ban gas cars by 1975 and a 1970 EPA plan to cut auto emissions by imposing parking surcharges and reducing the number of parking spaces.

“Environmental policy has these characteristics because it has a large theological component,” Cato states. “Saving the planet is different from bargaining over the Library of Congress budget.”

Consumers appear to be overlooked in the process, but they’re making their voices heard by simply avoiding EVs.

In January, car rental company Hertz disclosed that it was selling off 20,000 Tesla EVs, or one-third of its electric fleet, after discovering that their customers didn’t want to drive them. Aside from a lack of customer demand, Hertz pointed to the expense of repairs.

Hertz incurred a $245 million loss to unload the EVs and plans to “reinvest a portion of the proceeds from the sale of EVs into the purchase of internal combustion engine vehicles to meet customer demand,” the company stated.

“It’s truly stunning that the Biden EPA issued the EV mandate just five days after Hertz, the auto rental giant, ousted its CEO over that company’s costly EV debacle,” Mr. Bryce said.

“The company made a huge bet on Teslas, only to find that customers didn’t want to rent them.”