Electric cars and trucks have had a federal tax incentive for many years as a way for the US government to promote cleaner transportation. Most recently the Inflation Reduction Act (IRA) has extended the electric vehicle (EV) tax credit to at least the end of 2032.
One important electric vehicle missing from the tax incentives in the IRA is the electric bicycle. As the IRA was being planned out electric bikes were in the mix for consideration with the E-Bike Act (Electric Bicycle Incentive Kickstart for the Environment Act) but at the end of the day they were cut from the incentives.
The E-Bike Act was originally introduced in 2021 and now it is back led by Reps Jimmy Panetta (D-Calif.), Earl Blumenauer (D-Ore.), Mike Thompson (D-Calif.), Adam Schiff (D-Calif.), and Sen. Brian Schatz (D-Hawaii).
The E-Bike Act would provide a refundable tax credit of 30 percent on the purchase of a new e-bike, up to $1,500. eBikes priced over $8,000 are not eligible for the tax credit and income must be less than $150,000 for a single filer or less than $300,000 for joint filers. (Read more about the E-BIKE ACT)
Electric bikes should have these EV tax incentives because they are one of the most attainable electric vehicles with many benefits that can make them a good car alternative. They also have a low operating cost, help to reduce traffic congestion, and add to daily activity for better health.
Electric Bikes Are One of the Most Attainable EVs
Many people from all parts of the economic spectrum can benefit from being able to afford an electric bike. At around $1,000+, an electric bike is one of the most affordable and highly useful electric vehicles, doing many of the same things an "eCar" can do for around town commuting and errand running.
One of the lowest priced eCars, the Chevy Bolt, starts at around $26,000. While the price difference is large, there is additional value in the eCar with weather protection, climate control, higher speeds, and around 250 miles of range. No doubt an eCar can do more than an eBike but for many people it is just not within their budget to afford, even with the $7,500 EV tax credit (if the car qualifies).
A used eCar is an option but they still can be expensive even with a $4,000 tax credit (if the car qualifies). Assuming you can buy a used eCar at $15,000, which is optimistic, and take the $4,000 credit that would still be pricey at $11,000.
For many people at the lower end of the income spectrum, an electric car just doesn’t fit their budget but an electric bike can.
High Utility to Price Ratio
The utility to price ratio of an electric bike is very high compared to eCars and trucks.
Electric bikes can do a lot of things an automobile can do in town, at a fraction of the cost. They are great for commuting, errand running, taking the kids to school, meeting friends and family around town, etc.
eBikes combine many of the conveniences of a car or truck with advantages of a bicycle. They create a sweet spot with a similar utility of a car with the easy going use of a bicycle.
With the right cargo set up, like an eCargo bike or eBike with a trailer, an eBike can do a lot of the errands a car can. Transport bags of groceries from the store to home, take the kids to and from school, pick up bulky items at the hardware store, and more.
Another convenience of an eBike compared to a conventional bike is that you have the option to ride easier and sweat less. That makes showing up at work in a presentable fashion more realistic when commuting by eBike.
Parking can be a regular problem for cars, but it's no problem for an eBike. While car drivers may be circling the block looking for a parking space, a bike rider can in many circumstances park right near the entrance of their destination, and it's free!
eBike Operating Costs are Low
Another benefit to owning an electric bike is the low monthly and annual costs of operating and maintaining it compared to an eCar. The usual regular cost related to a car like registration, insurance, and parking just don’t apply to owning an electric bike.
Then the energy costs are lower with a 60 pound electric bike vs. a 3,000 to 4,000 pound electric car. Not only does the lower energy cost benefit the rider but it also benefits the community and environment with less of a strain on the energy grid.
Likewise, the maintenance costs of tune ups, tire replacements (2 tires vs. 4), etc. will be lower too.
Like an electric car or truck, the replacement of the battery does need to be factored in over the years of ownership. Some money should be set aside every year for the eventual replacement of the battery. Again, the replacement costs of a eBike battery will be a fraction of the costs of an eCar battery.
When you consider the lower initial price and lower operating costs, electric bikes can be a more attainable and useful electric vehicle for many more people than an eCar that has a higher barrier to entry.
eBikes Reduce Traffic Congestion
Promoting the use of electric bikes versus electric cars or trucks also has the potential to reduce traffic congestion on the city streets. This is a pain point for many cities and encouraging more eBike use could be a benefit for communities in general.
The cost to build larger infrastructure for automobiles is very expensive. The cost to promote more biking, walking, and the use of mass transit could be a more economical solution to reduce traffic congestion and potentially eliminate some larger infrastructure expenses.
More Riders Demand Better Infrastructure
And speaking of infrastructure, many cities could benefit from improved bicycle and pedestrian infrastructure that is generally a fraction of the costs of auto infrastructure.
With more people riding bikes and walking, cities could justify the investment in safer and more comprehensive routes around the city. This kind of infrastructure would help people across the economic spectrum but it would be especially beneficial to those at the lower end that can only afford to bike or walk for transportation.
Good bike and pedestrian infrastructure also tends to make a city a more desirable place to live and visit.
Riding an electric bike is also active transportation that has physical and mental health benefits. Commuting on an eBike helps to get some regular cardiovascular activity and it's way more fun than sitting in traffic!
Many people who ride an electric bike for the first time get the eBike smile because they are just so much fun to ride. So starting your day and wrapping it up with an eBike ride is a good way to add some fun to the work day.
The electric car doesn’t do much for physical activity and in many cases the stress of traffic is a negative for daily mental health.
With the lack of federal incentives other programs from the state, county, city, and utility levels have emerged to encourage more people to ride electric bikes. California, for example, is in the process of rolling out their statewide eBike incentive program this year, but the process is agonizingly slow. (see updates on the California incentives)
It is great to see the many programs that are available but they are not available to everyone. That is why we need an eBike incentive program at the federal level.
Electric Bikes Just Make Sense
Electric bikes are great electric vehicles that are attainable for more people. They offer a lot of utility similar to an eCar but with a fraction of the upfront cost and regular operating costs.
They can also be an important component of reducing traffic congestion in cities and potentially saving on large infrastructure costs. With more people riding, cities could justify improvements in bicycle and pedestrian infrastructure that benefits the community.
Promoting active transportation is also a win for riders' physical and mental health.
It just makes sense that there would be a federal tax incentive for electric bicycles as a way to see more people and communities benefiting from active electric transportation.
I encourage you to take action in supporting the E-Bike Act by sending a note to your representative and senator through this People for Bikes form, it only takes a few minutes.
Let’s incentivize more people to ride electric bikes!