Earth Protect Blog

By Jack Ewing

The New York Times

Democrats pushed through climate change legislation this year that earmarked tens of billions of dollars to create a U.S. supply chain for electric vehicles. Republicans and the states they represent are poised to cash in on much of the political and economic windfall.

For Republican members of Congress, none of whom voted for the climate law, it’s the best of both worlds. They can call the spending wasteful, while benefiting politically from the jobs and money that car and battery factories bring to their districts.

Even before President Joe Biden signed the Inflation Reduction Act in August, billions of dollars were flooding into electric-car and battery factories. The legislation is expected to supercharge the investment, a large chunk of which is flowing to states whose representatives are often skeptical of climate change and have close ties to coal, oil and natural gas businesses.

States that voted for former President Donald Trump will receive most of the grants announced by the White House to promote battery and raw material production in the United States, part of a broad effort to end dependence on China. Companies in 12 states will receive grants totaling $2.8 billion; all but four of those states voted for Trump in 2020. The grants were authorized by a bipartisan infrastructure law Biden signed last year.

Likewise, five of the 10 states that will receive the most private investment related to electric vehicles voted for Trump, according to data compiled by the Zero Emission Transportation Association, an industry group. They include Tennessee, which is expected to receive $18 billion, more than any other state.

Ideology has not prevented red-state politicians from trumpeting green investments in their districts. The disconnect was on display in Spartanburg, S.C., this month when BMW announced plans to upgrade a factory to produce electric vehicles, and to build a new plant nearby to assemble batteries.

Among the South Carolina Republicans on hand to celebrate the $1.7 billion investment was Gov. Henry McMaster, who has called for abolishing the Environmental Protection Agency, yet this month appointed an electric vehicle coordinator to encourage companies to invest in the state.

The state’s senior senator, Lindsey Graham, who also attended the event, has strongly criticized the Inflation Reduction Act, accusing Democrats of “turning the economy upside down and increasing taxes all in the name of climate change.” He said that, if Republicans win control of Congress, he would hold hearings on where battery raw materials come from and how the shift to electric vehicles is affecting automakers, Reuters reported.

South Carolina is one of 17 states that have sued to stop the EPA from allowing California to set more stringent standards for greenhouse gas emissions by cars and pickup trucks.

For BMW, Spartanburg was a logical place to build electric vehicles. The German company has made cars there since the 1990s. Executives said they had decided to expand operations before Congress passed the Inflation Reduction Act, but the law could be a boon nonetheless.

Buyers of cars made at the factory, unlike people who buy electric vehicles imported from Germany, are more likely to qualify for federal incentives worth up to $7,500 under the climate bill.

“States whose legislators are least likely to support those consumer purchasing benefits may well be the ones who get the most benefits,” said Barry Rabe, a professor of political science at the University of Michigan who studies energy and climate politics.

Oliver Zipse, the chief executive of BMW, said that South Carolina political leaders had been very supportive of electric vehicle production, whatever their views on climate change. Zipse also has problems with the Inflation Reduction Act, but for different reasons. He said the law made it too difficult for carmakers to qualify for subsidies.

In particular, Zipse said by phone, it’s impossible for carmakers to meet requirements that raw materials for batteries come from America or its trade allies. “There are some substantial flaws,” Zipse said. “No car manufacturer is profiting from it.”

Michigan and other Midwestern states, which send a fair number of Democrats to Congress, will get some of the money, but many of the biggest projects are in the South where Republicans dominate.

Other examples include a $5.6 billion electric vehicle and battery manufacturing complex Ford Motor is building north of Memphis, Tenn.; a new Tesla factory in Austin, Texas, and a Hyundai electric vehicle plant in Bryan County, Ga.

In Kentucky, which is represented in the Senate by Minority Leader Mitch McConnell, who led opposition to the Inflation Reduction Act, battery factories will soon employ more people than the coal industry.