Federal incentives could make e-bikes more affordable for all Americans

Federal tax credits for electric bicycles could enable more Americans to drive less and live more

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In July of 2021, my family bought an electric cargo bike, and we have been riding it nearly every day since. This e-bike has made commuting to work, dropping our son off at school, and running errands more sustainable and more enjoyable.

Our family is just one of many who have discovered the benefits of e-bike ownership. With their practicality and appeal for short trips, e-bikes have the potential to replace many car trips thereby reducing emissions and improving air quality. This is why PIRG has long advocated for a national tax credit to support the adoption of e-bikes.

Reintroducing the E-BIKE Act

Recognizing this potential, Representatives Panetta, Blumenauer, Thompson, and Schiff introduced the Electric Bicycle Incentive Kickstart for the Environment (E-BIKE) Act to Congress this week. The proposed federal legislation aims to make e-bikes more affordable and accessible by offering a consumer tax credit for 30% of the cost to purchase an e-bike (up to $1,500).

This is not the first time the E-BIKE Act has been introduced. The bill was first introduced in 2021 and came close to passing as part of the Inflation Reduction Act, but was cut during final negotiations.

The updated version differs from the original bill by establishing an income cap to receive a rebate – $150,000 for single filers and $300,000 for married couples filing jointly. In order to address fire safety concerns, qualifying bikes would be required to meet electrical and battery testing requirements. Bikes purchased with a rebate must also conform to the federal classification system that divides e-bikes into three categories based on how fast they go and whether they have a throttle.

Federal tax credits for electric cars, trucks, and SUVs have helped incentivize consumers to adopt low- and zero- emissions vehicles. The E-BIKE Act would establish similar incentives for electric bicycles, an even more efficient form of electric transportation.

How incentives can spur e-bike adoption

For those interested in adopting e-bikes for transportation, the price tag of a new electric bicycle can be a hurdle. Quality e-bikes that are reliable and repairable typically start at $1,300-$1,800, and electric cargo bikes that can carry passengers and cargo often cost much more.

Incentive programs in cities and states across the country have already helped spur e-bike adoption by helping customers overcome the up-front cost to buy a bike. Denver’s rebate program helped over 4,700 residents become e-bike owners in 2022. According to a recent survey, new e-bike owners who received a voucher through the Denver program are collectively shifted 100,000 miles from car to e-bike per week.

The benefits of active mobility

Encouraging more people to choose active transportation over driving has the power to deliver benefits beyond a reduction in greenhouse gas emissions. Riding an electric bicycle is a physically active alternative to driving which is a largely sedentary behavior. Switching even a few trips per week from car to bike can deliver health benefits to riders. E-bikes can also help save people money, especially in urban areas where parking and gas costs are high.

For my family, the benefits of riding our electric cargo bike also include spending more time outside, meeting more of our neighbors, and discovering hidden corners of our community that we never would have noticed from inside our car.

Investing in active transportation solutions is part of a comprehensive strategy to build a more sustainable transportation system. By driving less and living more, we can reduce our dependence on fossil fuels, improve air quality, and create healthier, more livable communities. The E-BIKE Act represents an important step towards making active transportation more accessible to people across the country.

Laura Davis
Laura Davis

Former Transform Transportation, Advocate, PIRG


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