After being originally introduced in 2021, yet faltering before the finish line, a federal incentive for electric bicycle purchases is back on the table. If it passes, Americans could receive a $1,500 tax credit for the purchase of an electric bike.
The Electric Bicycle Incentive Kickstart for the Environment (E-BIKE) Act has just been reintroduced to the US House of Representatives by U.S. Representatives Jimmy Panetta (CA-19), Congressional Bike Caucus Chair Earl Blumenauer (OR-03), Mike Thompson (CA-04), and Adam Schiff (CA-30).
Electric bicycle use has seen a steady increase over the last few years as more Americans adopt the light, fast, and efficient alternative form of transportation.
The addition of a battery and assist motor to an otherwise conventional bicycle has helped turn e-bikes into car replacers for many Americans. However, the high cost of e-bikes compared to traditional pedal bicycles has kept them out of reach for many commuters who could use them most.
Electric bicycle prices start at around $600-$800 for budget models, but premium e-bikes can cost as much as 10 times those prices. Thus, an e-bike tax credit has long been seen as a way to help get these effective small-format EVs into the hands of more Americans.
As Rep. Panetta explained:
Many people are looking to get out of their cars and get on to e-bikes not just for recreation, but also for transportation purposes. Although we’re seeing more people on them in our communities, more needs to be done to ensure that everybody across our country has access to an e-bike. By incentivizing Americans to own and use e-bikes, we are allowing them the chance to help improve the quality of life in our communities and tackle the climate crisis in our country.
The federal tax credit outlined in the E-BIKE Act would cover up to 30% of the cost of a new electric bike, up to a maximum credit of $1,500.
In order to qualify, the e-bike would have to be priced at less than $8,000.
According to PeopleForBikes, “the credit would be allowed once per individual every three years or twice for a joint-return couple buying two electric bicycles. New to this version is this addition of income caps that parallel existing electric vehicle tax credit caps: an annual salary of $150,000 for single filers, $225,000 for heads of households, and $300,000 for those filing jointly.”
The incentive is designed to make electric bicycles more accessible to lower-income Americans, as Rep. Blumenauer explained:
With an e-bike, anyone can be a bike commuter, but the high cost discourages too many consumers. That is why I am so excited about the E-BIKE Act. Let’s get more people off of the highway and into the bike lanes.
The E-BIKE Act was originally introduced in 2021 and then was rolled into legislation that ultimately became the Inflation Reduction Act. However, the electric bike incentive was one of many provisions of the proposed legislation that was whittled away in order to garner majority support to pass the bill.
After the former federal e-bike incentive stalled, many cities and states picked up the slack and created their own local incentive programs.
Denver’s e-bike rebate program is, perhaps, one of the most famous in the US, originally offering $400 off the purchase of a new e-bike. The program quickly exhausted its funding before being renewed this year with a slightly lower $300 rebate on new e-bikes. Vouchers will be given out in a half dozen rounds throughout the year, with the first round already being scooped up within 20 minutes of going live.
Colorado will soon be playing catch-up by launching its own e-bike incentive program. Colorado may beat California to the punch with a statewide rebate program, but it won’t be the first. That honor goes to Vermont’s statewide e-bike incentive program. The Vermont program may have helped inspire similar statewide e-bike rebates that are currently being proposed in New York and Oregon.
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