Democrats this year pushed a climate change bill that would allocate tens of billions of dollars to build the U.S. supply chain for electric vehicles. Republicans and the states they represent are poised to take on much of the political and economic windfall.
For Republican congressmen who didn’t vote for climate change legislation, it’s the best of both worlds. While politically profiting from the jobs and money that car and battery factories bring to the district, they can call the spending wasteful.
Billions of dollars were pouring into electric car and battery factories even before President Biden signed the Inflation Control Act into law in August. The law is expected to spur investment, much of it to states whose representatives are climate change skeptical and have close ties to coal, oil and gas businesses.
States that voted for former President Donald J. Trump will receive most of the grants announced by the White House on Wednesday, boosting U.S. production of batteries and raw materials as part of a broader effort to end dependence on China. Promote production. Companies in 12 states will receive a total of $2.8 billion in grants. All but four of those states voted for Trump in 2020. The grant was approved by the bipartisan infrastructure law Mr. Biden signed into law in November.
Similarly, five of the 10 states with the most private investment related to electric vehicles voted for Trump, according to data compiled by the Zero Emission Transportation Association. Among them is Tennessee, where he is expected to receive $18 billion, more than any other state.
Ideology has not prevented red state politicians from promoting green investments in their districts. The disconnect was shown Wednesday in Spartanburg, South Carolina, when BMW announced plans to upgrade its factory for producing electric vehicles and build a new factory nearby to assemble batteries.
Among South Carolina Republicans in attendance to celebrate the $1.7 billion investment was Gov. Henry McMaster, who called for the Environmental Protection Agency to be abolished, but appointed a coordinator for electric vehicles this month. encourage businesses to invest in the state.
“The road to the future is here,” McMaster said in a prepared remark Wednesday. “And I applaud BMW for helping pave the way.”
State senior senator Lindsey Graham, who was also present at the event, strongly criticized the Inflation Reduction Act, accusing Democrats of “upending the economy and raising taxes in the name of climate change.” According to Reuters, he will discuss on Wednesday where the raw materials for batteries will come from and how the shift to electric vehicles will affect automakers if Republicans gain control of Congress. He said he would hold a public hearing.
South Carolina is one of 17 states that have sued to stop the EPA from allowing California to set stricter standards for greenhouse gas emissions from cars and pickup trucks. In October, they were joined by Rep. Ralph Norman and Rep. William Timmons from constituencies that include parts of Spartanburg County. other Republicans He called on Biden to block California’s plan to end the sale of gasoline cars by 2035.
Contents of the Inflation Control Law
For BMW, Spartanburg was the logical place to build an electric car. The German company has been manufacturing cars since his 1990s. Management said it decided to expand its business before Congress passed the anti-inflation law, but the law could still bring benefits.
Buyers of factory-built cars are more likely to qualify for federal incentives worth up to $7,500 under the climate bill, unlike those who buy electric cars imported from Germany. increase.
“The states with legislators least likely to support the benefits of consumer purchases will reap the greatest benefits,” said Barry Rabe, a professor of political science at the University of Michigan who studies energy and climate politics. There is a possibility that
Mr Rabe said it was normal for “everyone to show up and try to claim credit” when a new factory opened.
BMW chief executive Oliver Zipse said South Carolina political leaders have been very supportive of the production of electric vehicles, regardless of their views on climate change. Mr. Zipse also has a problem with the anti-inflation law, but for a variety of reasons. He said the law makes it very difficult for automakers to qualify for subsidies.
In particular, Gypse said in a call from Spartanburg on Wednesday that it would be impossible to meet the requirement for automakers to source battery raw materials from the United States or its trading allies.
“There are some serious flaws,” Gypsse said. “No automaker is profiting from it.”
All automakers are spending billions of dollars to navigate the biggest technological upheaval to hit the industry in a century. Michigan and other Midwestern states that send significant numbers of Democrats to Congress will get some of the funding, but many of the biggest projects are in the Republican-dominated South.
Other examples include Ford Motor Company’s $5.6 billion electric vehicle and battery manufacturing facility under construction north of Memphis. The new Tesla factory in Austin, Texas. Envision AESC, BMW’s battery supplier, will build a plant in South Carolina to supply the Spartanburg plant.
These projects were ahead of the Inflation Reduction Act, which also included subsidies to encourage solar, wind and hydrogen projects. But the law will significantly accelerate those investments, said the head of Fortescue Future Industries, an Australian company that plans to build hydrogen-producing plants using wind, solar or water power. Managing Director Mark Hutchinson said.
The company is scouting locations in states like Texas and West Virginia and has received a warm welcome from politicians from all walks of life, he said. “A lot of states, whether they’re Republicans or Democrats, are going to be very enthusiastic about this,” he said. “Work is work.”
Mercedes-Benz began production of the EQS electric sport utility vehicle near Tuscaloosa, Alabama, in August, assembling battery packs at a new factory in nearby Woodstock.
The road from Birmingham to the factory winds through rural southern landscapes of clusters of weathered mobile homes, large Baptist churches, drag strips and a barbecue joint called Promiseland.
Alabama, Kentucky, and South Carolina are nearing the bottom of the national rankings for electric vehicle sales. But that apparent penchant for gas-burning vehicles has prompted elected officials, including Alabama Gov. Kay Ivey, to expect results in March, when Mercedes inaugurated a huge new billion-dollar battery factory. did not interfere.
The plant is “one of the best things” that has ever happened in the area, said James Kelly, a member of the local county board.
Officials were more reserved when talking about the environmental benefits of electric cars. . But climate change is “not a big concern,” he said.
Mercedes executives are urging states to do more to promote electric vehicles.
“Our team works very closely with the state to see how the market develops,” Mercedes-Benz CEO Ola Kallenius said in an interview in Alabama in March. We’ve been talking about what we’re going to do and what needs to happen.
In response, Ivey’s administration launched an advertising campaign, “Drive Electric Alabama,” to encourage the purchase of electric vehicles. Alabama also announced plans to install charging stations along major highways.
Advertising campaigns emphasize the fuel savings and home charging convenience of electric vehicles over their environmental benefits.
Volkswagen of America president Pablo Di Ci said in an interview Wednesday that in Tennessee, Volkswagen is doing more to promote solar power and other forms of renewable energy, so that electric vehicles run on clean energy. He said he has been lobbying authorities to do more. The German automaker began production of his battery-powered ID.4 SUV at its Chattanooga plant in July.
“Energy sources are an important part of this discussion,” Di Si said, adding that Tennessee officials are open to it.
In Kentucky, where Mitch McConnell, the minority leader who led the opposition to the Inflation Reduction Act, is in the Senate, battery factories are more important than the coal industry, which has traditionally been a pillar of the state’s economy and identity. We will be hiring more people in the near future.
Ford is spending $5.8 billion to build a battery plant in Glendale, Kentucky, in partnership with South Korean company SK Innovation. Japan-based Envision AESC will invest his $2 billion in the Bowling Green battery plant.
Kentucky Governor Andy Beshear, a Democrat, said he was excited about the more than 7,000 jobs the battery companies will create in Kentucky. But in a clear nod to political realities, he said he also supports the coal industry.
“We must have a diversified energy portfolio that promotes green energy to protect our planet, but we also know that when we turn on that light, we need to be able to turn it on even in difficult times. We need to,” said Beshear. in an interview.
John G. Gere, a professor at Vanderbilt University in Nashville, said conservative climate skeptics’ support for green technology may not be as far-fetched as it seems.
“The only unifying principle on which political parties always converge is more jobs,” Gere said.
Republicans are adamantly opposed to Biden’s climate change program, but not private investment, particularly from the auto industry, he said. Southern states have been trying to attract auto companies for decades, with considerable success.
Just as the presence of the oil industry has shaped attitudes to climate change in states such as Texas and Louisiana, so billions of dollars of investment in electric vehicles could change attitudes to climate change, Gere said. said.
He said the influx of new workers into new car and battery factories from elsewhere could even change the political party favored by some parts of the South.