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How to overcome the biggest obstacle to electric vehicles

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Packing ever more ions into ever smaller batteries, spangling the landscape with charging stations, lowering the cost to make electric cars and trucks: these are complex, exciting challenges that engineers, regulators and others will probably solve. The tougher problem, the one that may define the limit of the American market for electric vehicles, is much stupider. It is polarisation, the stuff that makes an EV go but in its metaphorical incarnation is cursing not only America’s politics but, increasingly, its culture and marketplace.

Three researchers who studied the adoption of electric and plug-in hybrid vehicles between 2012 and 2022 discovered that fully half of them went to Americans living in the 10% of counties with the highest proportion of Democratic voters. A third went to just the top 5% of such places. The pattern held even when the researchers controlled for income and population density.

Lucas Davis, a professor at Berkeley’s Haas School of Business who was an author of the study, was startled that the correlation with ideology did not subside over the period under review, a decade during which the electric-vehicle market diversified with scores of models. “The market has matured in many ways, and I expected to see more of a broadening of EVs across the political spectrum,” he says. “I think the results suggest that it may be harder than previously believed to achieve widespread EV adoption.”

From the popularity of what the researchers called “conspicuous” EVs, they tentatively concluded that many purchases were driven by “extrinsic” motivations—a desire to advertise one’s concern about climate change. That is a signal many Republican drivers are eager not to send.

This problem has caught the attention of one of America’s most experienced Republican campaign operatives, Mike Murphy. A past devotee of internal combustion, Mr Murphy grew up in Detroit and boasts he has averaged about eight miles per gallon over the years. But when he traded in his Porsche for an electric BMW he became entranced by both the superior performance and the community of engineers and enthusiasts trying to overcome the obstacles to electrification. “It’s like the Apollo programme,” he says. “They’re full of joy. They’re solving really tough engineering problems and have a purpose to that. And that’s a bit infectious.”

Mr Murphy decided to apply his skills to knocking down the barrier that the boffins were less equipped to defeat. In January he launched an outfit, the EV Politics Project, to advise automakers on how to overcome Republican resistance and also to counter what he expects, in the 2024 campaign, to be an intensifying barrage of attacks on electrification.

Mr Murphy undertook a poll to gauge the problem. He discovered that Democrats and Republicans had similar attitudes toward car brands in general but split radically over electric-only carmakers. Democrats approved of them by a net margin of 15 points, whereas Republicans disapproved by 40 points—”an Osama bin Laden number,” Mr Murphy says. While 61% of Democrats said their friends and relatives would praise them for a “smart move” if they bought an eV, only 19% of Republicans said that.

The son of a labour lawyer and grandson of carworkers, Mr Murphy fears the American auto industry will not survive if electrification falters. “If half the American market is ruling this stuff out based on bullshit and tribalism—and on marketing that doesn’t understand that—that’s a gift to the People’s Republic of China,” he says. Mr Murphy is a Reagan Republican who advised the likes of John McCain, Jeb Bush and Mitt Romney. The toughest adversary he confronts over the politics of electrification is the same one he has been tilting against for years, unsuccessfully, over the direction of his party: Donald Trump.

Mr Trump has identified in the polarisation over electric vehicles the kind of energy that has powered his politics since 2016. “MAY THEY ROT IN HELL”, he wished of EV supporters, among others, on Christmas Day. He owned a Tesla, according to his aides, but he has claimed electric vehicles are bad for the environment, require charging every 15 minutes and will cause 40% of American auto jobs to disappear in a year or two. Some Republican-led states have begun imposing fees on EVs, restrictions on how they can be sold and even new taxes, purportedly to make up for lost fuel-tax revenue, though Republican leaders, starting with Mr Trump, do not habitually object to tax avoidance.

Yet some Republican leaders have embraced the possibilities of electrification. It has taken ridiculously long for states to begin opening new charging stations with the $7.5bn fund created by President Joe Biden’s 2021 infrastructure law. But the first governor to do so, in December, was Mike DeWine of Ohio, a Republican. Brian Kemp, the Republican governor of Georgia, is busy recruiting battery manufacturers.

The body electric

Mr Murphy sees other openings. He notes that five of the top ten states for EV investment, including Georgia and Michigan, are swing states in presidential elections. He intends to aim his pro-EV messages at them. Whereas 66% of Democrats think Elon Musk is a bad ambassador for EVs, 61% of Republicans disagree. “So is he Nixon to China?” Mr Murphy wonders.

Mr Murphy’s polling also suggests, hopefully, that regardless of party most Americans share important sentiments about EVs. They have the same anxieties about price and range, and they are drawn to some of the same advantages: never paying for petrol, cashing in on government rebates. Mr Murphy thinks carmakers need to shut up about how EVs help the environment—those who care are already sold on the vehicles—and talk instead about how they benefit their owners. “If we want to move iron, we gotta make it about cars, not about luxury opinions,” he says. There may be a lesson in there for Mr Biden’s re-election campaign, too. 

Read more from Lexington, our columnist on American politics:
Why America’s political parties are so bad at winning elections (Jan 25th)
It’s not the Trump Party quite yet (Jan 18th)
Ron DeSantis has some lessons for America’s politicians (Jan 11th)

Stay on top of American politics with Checks and Balance, our weekly subscriber-only newsletter, which examines the state of American democracy and the issues that matter to voters.

Economics

EC President von der Leyen

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The European Union is preparing further countermeasures against U.S. tariffs if negotiations fail, according to European Commission president Ursula von der Leyen.

U.S. President Donald Trump had imposed 20% tariffs on the bloc on Wednesday.

Von der Leyen’s comments come after retaliatory duties were announced by the bloc after the U.S. imposed tariffs on  last month in a bid to protect European workers and consumers. The EU at the time said it would introduce counter-tariffs on 26 billion euros ($28 billion) worth of U.S. goods.

Previously suspended duties — which were at least partially in place during Trump’s first term as president — are set to be re-introduced alongside a slew of additional duties on further goods.

Industrial-grade steel and aluminum, other steel and aluminum semi-finished and finished products, along with their derivative commercial products, such as machinery parts and knitting needles were set to be included. A range of other products such as bourbon, agricultural products, leather goods, home appliances and more were also on the EU’s list.

Following a postponement, these tariffs are expected to come into effect around the middle of April.

This is a developing story, please check back for updates.

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Economics

ADP jobs report March 2025:

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Attendees check in during a job fair at the YMCA Gerard Carter Center on March 27, 2025 in the Stapleton Heights neighborhood of the Staten Island borough in New York City. 

Michael M. Santiago | Getty Images

Private payroll gains were stronger than expected in March, countering fears that the labor market and economy are slowing, according to a report Wednesday from ADP.

Companies added 155,000 jobs for the month, a sharp increase from the upwardly revised 84,000 in February and better than the Dow Jones consensus forecast for 120,000, the payrolls processing firm said.

The upside surprise comes amid worries that President Donald Trump’s aggressive tariffs could deter firms from adding to headcount and in turn slow business and consumer activity. Trump is set to announce the next step in his trade policy Wednesday at 4 p.m.

Hiring was fairly broad based, with professional and business services adding 57,000 workers while financial activities grew by 38,000 as tax season heats up. Manufacturing contributed 21,000 and leisure and hospitality added 17,000.

Service providers were responsible for 132,000 of the positions. On the downside, trade, transportation and utilities saw a loss of 6,000 jobs and natural resources and mining declined by 3,000.

On the wage side, earnings rose by 4.6% year over year for those staying in their positions and 6.5% for job changers. The gap between the two matched a series low last hit in September, suggesting a lower level of mobility for workers wanting to switch jobs.

Still, the overall numbers indicate a solid labor market. Recent data from the Bureau of Labor Statistics indicates that the level of open positions is now almost even with available workers, reversing a trend in which openings outnumbered the unemployed by 2 to 1 a couple years ago.

The ADP report comes ahead of the more closely watched BLS measure of nonfarm payrolls. The BLS report, which unlike ADP includes government jobs, is expected to show payroll growth of 140,000 in March, down slightly from 151,000 in February. The two counts sometimes show substantial disparities due to different methodologies.

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Economics

Trump tariffs’ effect on consumer prices debated by economists

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The U.S. government is set to increase tariff rates on several categories of imported products. Some economists tracking these trade proposals say the higher tariff rates could lead to higher consumer prices.

One model constructed by the Federal Reserve Bank of Boston suggests that in an “extreme” scenario, heightened taxes on U.S. imports could result in a 1.4 percentage point to 2.2 percentage point increase to core inflation. This scenario assumes 60% tariff rates on Chinese imports and 10% tariff rates on imports from all other countries.

The researchers note that many other tariff proposals have surfaced since they published their findings in February 2025. 

Price increases could come across many categories, including new housing and automobiles, alongside consumer services such as nursing, public transportation and finance. 

“People might think, ‘Oh, tariffs can only affect the goods that I buy. It can’t affect the services,'” said Hillary Stein, an economist at the Boston Fed. “Those hospitals are buying inputs that might be, for example, … medical equipment that comes from abroad.” 

White House economists say tariffs will not meaningfully contribute to inflation. In a statement to CNBC, Stephen Miran, chair of the Council of Economic Advisers, said that “as the world’s largest source of consumer demand, the U.S. holds all the leverage, which means foreign suppliers will have to eat the economic burden or ‘incidence’ of the tariffs.” 

Assessing the impact of the administration’s full economic agenda has been a challenge for central bank leaders. The Federal Open Market Committee decided to leave its target for the federal funds rate unchanged at the meeting in March. 

The Fed targets its overnight borrowing rate at between 4.25% and 4.5%, with the effective federal funds rate at 4.33% on March 31, according to the New York Fed. The core personal consumption expenditures price index inflation rate rose to 2.8% in February, according to the Commerce Department. Forecasts of U.S. gross domestic product suggest that the economy will continue to grow at a 1.7% rate in 2025, albeit at a slower pace than what was forecast in January.  

Consumers in the U.S. and businesses around the world are bracing for impact. 
 
“There is a reason why companies went outside of the U.S.,” said Gregor Hirt, chief investment officer at Allianz Global Investors. “Most of the time it was because it was cheaper and more productive.” 

Watch the video above to learn how much inflation tariffs may cause.

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