1/2 c margarine
1 1/2 c sugar
1/2 c soy or rice yogurt, plus 1 t baking powder (this provides the binding and leavening that an egg normally would)
2 oz red food coloring
(or, if you prefer natural food coloring, 1/3 c beet powder)
1 c soy milk + 1 T vinegar (let this sit a few minutes to curdle - it's your substitute for buttermilk)
1/3 c cocoa
1 t baking powder (yes, that's 2 t in all)
2 c flour (cake flour is best, and yes, sift it!)
1 t salt
1 t cream of tartar
If you are going for a naturally red cake as opposed to food dye, do note that pH is important - Bittersweet has a good post on pH and red velvet cake.
Preheat oven to 350 F. Cream together the sugar and margarine, then add yogurt/baking powder and soy milk. In a separate bowl, mix together your dry ingredients. Once they are whisked and combined, pour into the creamed sugar/margarine mixture and mix till just combined. Pour into a greased & floured pan and bake for 30-35 min. Let cool on rack before frosting.
Speaking of frosting, I'll offer two recipes for you. The first is again Isa Chandra Moskowitz's, from Vegan Cupcakes Take Over the World:
1/4 cup non-hydrogenated margarine (softened)
1/4 cup vegan cream cheese, softened (Tofutti)
2 cups confectioners' sugar, sifted
1 teaspoon vanilla extract
Place margarine and Tofutti cream cheeze into your mixer and blend together. Add confectioner's sugar as you blend on medium speed, pausing to scrape down as needed. Once you've got it all blended, add vanilla extract for one last whirl, and the frost away!
Now, the Hot Damn recipe for cream cheese style frosting intrigues me, and it has the bonus of being soy-free, for those with allergies. Note: it is NOT nut-free, and fairly labor-intensive. I'd make it a day or so before I planned on putting it on cupcakes.
1/4 c almonds, peeled & ground (or use almond meal)
1 c water
2 T lemon juice
2 T cornstarch
1 1/2 T canola oil
1/2 t nutritional yeast
1/4 t salt
1/2 c confectioner's sugar
1 t vanilla extract
Use a blender to blend the ground almonds with half the water (1/2 c) until it forms a smooth mixture. Add remaining water and ingredients except the sugar and vanilla. Blend on high speed until mixture is smooth and creamy. Pour into a medium saucepan and bring to a boil over medium-high heat, stirring constantly to prevent scorching. Once mixture thickens, reduce heat and simmer for another minute or two, continuing to stir.
Remove saucepan from heat and beat in the sugar and vanilla extract, and then let it stand a while to cool. Once mixture is cool, beat well with a wire whisk or electric beaters to get a smooth consistency. Transfer to a container and chill it in the refrigerator, where it'll thicken up a bit more. Beat well again before using, to make it more spreadable.