President Joe Biden’s new EV mandates are expected to result in a significant wealth transfer from rural red regions to urban blue areas and wealthy Democrats. The Environmental Protection Agency (EPA) recently finalized tailpipe emissions rules that will require carmakers to have one-third of new car sales be electric vehicles (EVs) by 2027 and over two-thirds by 2032. While climate activists celebrate this move, critics argue that it will disproportionately impact low- and middle-income consumers who either don’t want, can’t use, or can’t afford EVs.
One of the main concerns is the cost of EVs. A report by the Texas Public Policy Foundation estimates that up to $48,000 of the average EV cost is paid through “socialized costs” spread among taxpayers and electricity consumers over a 10-year period. These costs include taxes, government subsidies, fuel economy credits, and higher electricity bills for infrastructure expansion. In essence, this represents a government-mandated wealth transfer to affluent EV owners, paid for by those who often cannot afford to buy EVs.
Furthermore, the demographics of EV buyers raise questions about the equity of these mandates. According to an analysis by author and energy analyst Robert Bryce, 57 percent of EV buyers earn over $100,000 annually, 75 percent are male, and 87 percent are white. EV ownership is also strongly correlated with political ideology, with a University of California Energy Institute report finding that EV adoption is highest in Democrat-leaning counties.
The regional distribution of EV ownership also reflects this trend, with California leading the way with 37 percent of all EVs owned nationwide. Other states with high EV ownership include Florida, Texas, and Washington, which are home to large cities and suburbs. On the other hand, rural states like Wyoming and North Dakota have a significantly lower number of EV owners.
The lack of interest in EVs among red states is not just a political issue but also driven by practical factors. A November 2023 AAA survey identified a lack of charging stations, limited range, and long charging times as the primary reasons for people not buying EVs. A recent Rasmussen poll found that 65 percent of Americans surveyed do not think they are likely to purchase an EV as their next vehicle.
Industry groups have also expressed concerns about the feasibility of EV mandates. The Clean Freight Coalition and the American Trucking Association argue that the timeline set by the EPA is impossible to meet given current technology and infrastructure. The United Auto Workers Union initially opposed the mandate due to concerns about job losses and non-union assembly plants. However, they eventually supported the plan after the EPA adjusted its regulations.
Critics argue that the Biden administration’s aggressive climate and automotive mandates fall into a category of “policy beyond capability.” These mandates often set unrealistic goals and miss deadlines, as seen in historical attempts to ban gas cars or reduce emissions. Environmental policy is often driven by ideology rather than economic considerations, leading to unintended consequences and disregarding consumer preferences.
Consumer preferences have already been evident in Hertz’s decision to sell off 20,000 Tesla EVs from its electric fleet due to lack of customer demand and high repair costs. This move resulted in a $245 million loss for the company and highlights the disconnect between government mandates and consumer preferences.
In conclusion, President Biden’s EV mandates will have significant implications for wealth distribution, with affluent urban areas benefiting at the expense of rural regions and low- and middle-income consumers. The mandates also raise questions about equity, as EV ownership is predominantly associated with wealthier, white, and Democrat-leaning individuals. Practical factors such as charging infrastructure and range limitations also contribute to the lack of interest in EVs among certain demographics. While there are concerns about the feasibility of these mandates and their impact on industries and jobs, the Biden administration continues to push forward with its climate agenda. Only time will tell how these policies will unfold and whether they will achieve their intended goals.
