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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. ■
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U.S. President Donald Trump speaks alongside entertainer Kid Rock before signing an executive order in the Oval Office of the White House on March 31, 2025 in Washington, DC.
Andrew Harnik | Getty Images
President Donald Trump is set Wednesday to begin the biggest gamble of his nascent second term, wagering that broad-based tariffs on imports will jumpstart a new era for the U.S. economy.
The stakes couldn’t be higher.
As the president prepares his “liberation day” announcement, household sentiment is at multi-year lows. Consumers worry that the duties will spark another round of painful inflation, and investors are fretting that higher prices will mean lower profits and a tougher slog for the battered stock market.
What Trump is promising is a new economy not dependent on deficit spending, where Canada, Mexico, China and Europe no longer take advantage of the U.S. consumer’s desire for ever-cheaper products.
The big problem right now is no one outside the administration knows quite how those goals will be achieved, and what will be the price to pay.
“People always want everything to be done immediately and have to know exactly what’s going on,” said Joseph LaVorgna, who served as a senior economic advisor during Trump’s first term in office. “Negotiations themselves don’t work that way. Good things take time.”
For his part, LaVorgna, who is now chief economist at SMBC Nikko Securities, is optimistic Trump can pull it off, but understands why markets are rattled by the uncertainty of it all.
“This is a negotiation, and it needs to be judged in the fullness of time,” he said. “Eventually we’re going to get some details and some clarity, and to me, everything will fit together. But right now, we’re at that point where it’s just too soon to know exactly what the implementation is likely to look like.”
Here’s what we do know: The White House intends to implement “reciprocal” tariffs against its trading partners. In other words, the U.S. is going to match what other countries charge to import American goods into their countries. Most recently, a figure of 20% blanket tariffs has been bandied around, though LaVorgna said he expects the number to be around 10%, but something like 60% for China.
What is likely to emerge, though, will be far more nuanced as Trump seeks to reduce a record $131.4 billion U.S. trade deficit. Trump professes his ability to make deals, and the saber-rattling of draconian levies on other countries is all part of the strategy to get the best arrangement possible where more goods are manufactured domestically, boosting American jobs and providing a fairer landscape for trade.
The consequences, though, could be rough in the near term.
Potential inflation impact
On their surface, tariffs are a tax on imports and, theoretically, are inflationary. In practice, though, it doesn’t always work that way.
During his first term, Trump imposed heavy tariffs with nary a sign of longer-term inflation outside of isolated price increases. That’s how Federal Reserve economists generally view tariffs — a one-time “transitory” blip but rarely a generator of fundamental inflation.
This time, though, could be different as Trump attempts something on a scale not seen since the disastrous Smoot-Hawley tariffs in 1930 that kicked off a global trade war and would be the worst-case scenario of the president’s ambitions.
“This could be a major rewiring of the domestic economy and of the global economy, a la Thatcher, a la Reagan, where you get a more enabled private sector, streamlined government, a fair trading system,” Mohamed El-Erian, the Allianz chief economic advisor, said Tuesday on CNBC. “Alternatively, if we get tit-for-tat tariffs, we slip into stagflation, and that stagflation becomes well anchored, and that becomes problematic.”
The U.S. economy already is showing signs of a stagflationary impulse, perhaps not along the lines of the 1970s and early ’80s but nevertheless one where growth is slowing and inflation is proving stickier than expected.
Goldman Sachs has lowered its projection for economic growth this year to barely positive. The firm is citing the “the sharp recent deterioration in household and business confidence” and second-order impacts of tariffs as administration officials are willing to trade lower growth in the near term for their longer-term trade goals.
Federal Reserve officials last month indicated an expectation of 1.7% gross domestic product growth this year; using the same metric, Goldman projects GDP to rise at just a 1% rate.
In addition, Goldman raised its recession risk to 35% this year, though it sees growth holding positive in the most-likely scenario.
Broader economic questions
However, Luke Tilley, chief economist at Wilmington Trust, thinks the recession risk is even higher at 40%, and not just because of tariff impacts.
“We were already on the pessimistic side of the spectrum,” he said. “A lot of that is coming from the fact that we didn’t think the consumer was strong enough heading into the year, and we see growth slowing because of the tariffs.”
Tilley also sees the labor market weakening as companies hold off on hiring as well as other decisions such as capital expenditure-type investments in their businesses.
That view on business hesitation was backed up Tuesday in an Institute for Supply Management survey in which respondents cited the uncertain climate as an obstacle to growth.
“Customers are pausing on new orders as a result of uncertainty regarding tariffs,” said a manager in the transportation equipment industry. “There is no clear direction from the administration on how they will be implemented, so it’s harder to project how they will affect business.”
While Tilley thinks the concern over tariffs causing long-term inflation is misplaced — Smoot-Hawley, for instance, actually ended up being deflationary — he does see them as a danger to an already-fragile consumer and economy as they could tend to weaken activity further.
“We think of the tariffs as just being such a weight on growth. It would drive up prices in the initial couple [inflation] readings, but it would create so much economic weakness that they would end up being net deflationary,” he said. “They’re a tax hike, they’re contractionary, they’re going to weigh on the economy.”
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A man pushes his shopping cart filled with food shopping and walks in front of an aisle of canned vegetables with “Down price” labels in an Auchan supermarket in Guilherand Granges, France, March 8, 2025.
Nicolas Guyonnet | Afp | Getty Images
Annual Euro zone inflation dipped as expected to 2.2% in March, according to flash data from statistics agency Eurostat published Tuesday.
The Tuesday print sits just below the 2.3% final reading of February.
So called core-inflation, which excludes more volatile food, energy, alcohol and tobacco prices, edged lower to 2.4% in March from 2.6% in February. The closely watched services inflation print, which had long been sticky around the 4% mark, also fell to 3.4% in March from 3.7% in the preceding month.
Recent preliminary data had showed that March inflation came in lower than forecast in several major euro zone economies. Last month’s inflation hit 2.3% in Germany and fell to 2.2% in Spain, while staying unchanged at 0.9% in France.
The figures, which are harmonized across the euro area for comparability, boosted expectations for a further 25-basis-point interest rate cut from the European Central Bank during its upcoming meeting on April 17. Markets were pricing in an around 76% chance of such a reduction ahead of the release of the euro zone inflation data on Tuesday, according to LSEG data.
The European Union is set to be slapped with tariffs due in effect later this week from the U.S. administration of Donald Trump — including a 25% levy on imported cars.
While the exact impact of the tariffs and retaliatory measures remains uncertain, many economists have warned for months that their effect could be inflationary.
This is a breaking news story, please check back for updates.
TO GET A sense of what the Republican Party thinks of the electoral value of Elon Musk, listen to what Brad Schimel, a conservative candidate for the Supreme Court of Wisconsin, has to say about the billionaire. At an event on March 29th at an airsoft range (a more serious version of paintball) just outside Kenosha, five speakers, including Mr Schimel, spoke for over an hour about the importance of the election to the Republican cause. Mr Musk’s political action committees (PACs) have poured over $20m into the race, far more than any other donor’s. But over the course of the event, his name came up precisely zero times.