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People crossing the busy intersection in Manhattan in New York City
But up to now, we鈥檝e largely ignored one of the most powerful tools for shifting away from internal combustion engines: the e-bike. (Photo: deberarr/iStock)

It鈥檚 Time for a Federal E-Bike Tax Credit

Thankfully, at least two congressmen agree, which is why your next e-bike could be as much as $1,500 cheaper

Published: 
People crossing the busy intersection in Manhattan in New York City
(Photo: deberarr/iStock)

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Over the past 20 years electric vehicle technology ,听commercially available, and extremely viable听tool听for reducing emissions and blunting the effects of climate change.听There are even economic incentives for purchasing electric cars.Since听2005, the federal government has offered听buyer tax credits of up to $7,500for hybrids and plug-in electric vehicles. That makes sense: if you want to use economic nudges to address climate change, you should focus first on the most popular behaviors, like driving. It鈥檚 been an impressive success. Just 17,763听plug-in EVs were sold in 2011 nationwide.听In 2018, as further听federal incentives for both buyers and carmakers drew more manufacturers into the market, EVsales to over 360,000.

But up to now, we鈥檝e largely ignored one of the most powerful tools for shifting away from internal combustion engines: the e-bike. After all, the best way to lower emissions from personal travel is to get people out of cars altogether. And bikes are arguably the most energy-efficient form of transportation we鈥檝e ever devised: .

Modern e-bikes have as the hybrid car, which first came out 23 years ago. But so far, financial incentives for e-bikes have only existed at the local and,听,state levels. They鈥檙e modest in size, limited in scope, more difficult to claim than EV incentives, and most people have no idea they even exist. As federal electric car tax credits from the 2009 American Recovery Act ,听and the pandemic bike boom听continues to bring more cyclists onto city streets,听maybe it鈥檚 time鈥攍ong past due鈥攆or a federal incentive program for e-bikes.

Thankfully, California鈥檚 Jimmy Panetta and Oregon鈥檚 Earl Blumenauer agree. In February, the two Democratic representatives introduced HR 1019, the E-BIKE Act. The bill is short听and simple: it would provide a federal tax credit of 30 percent of the purchase value of an e-bike, available to an individual听once every three years, capped at $1,500 and applicable to e-bikes costing less than $8,000. That鈥檚 far more generous than the thin patchwork of state and local incentives that currently exist, ranging from $200 rebates from utilities like Vermont鈥檚 Green Mountain Power to as much as $700 for California鈥檚 Clean Cars For All program.

Blumenauer said the idea behind his and Panetta鈥檚 new bill is to incentivize exactly the kind of e-bikes that are becoming popular: utility models between $1,000 and $7,000 that are perfect for replacing car trips in metro areas. 鈥淲e鈥檝e seen an explosion of interest in e-bikes,鈥 Blumenauer told 国产吃瓜黑料. 鈥淎nd this comes at a time where there鈥檚 not just renewed interest in cycling, but a realization that we鈥檙e in a [climate]听struggle. The future of the planet needs to be a low-carbon future, and e-bikes can significantly accelerate that transition.鈥

To be sure, this is . And no one knows better than Blumenauer that the path for a bike bill to become law is long and difficult. Blumenauer has represented Oregon鈥檚 3rd Congressional District, which includes much of Portland, since 1996, and is known for his extensive bowtie collection and his love of bikes. In D.C. he commutes regularly on a Trek Portland. He鈥檚 sponsored 38 bike-related bills in his time on Capitol Hill, and gotten several key wins, including a bike-commuter tax benefit. (It was later eliminated in the 2017 tax-cut bill passed by Republicans, but Blumenauer is trying to revive it this legislative session with another bill.)

鈥淚t鈥檚 hard these days to have standalone legislation,鈥 Blumenauer concedes. The best path is likely to get folded into a larger package. He points to the 听unveiled in late March by the Biden administration as a likely candidate.

Getting the bill passed听won鈥檛 be easy. With an $8,000 purchase-price ceiling,opponents will level the at听this bill that they听used against electric car incentives: that the tax credit means no one wants an e-bike, or that owning one is just virtue-signaling for rich liberals. 鈥淭he e-bike isn鈥檛 a Tesla, for heaven鈥檚 sake,鈥 says Blumenauer when asked about it. A modest tax credit on e-bikes is 鈥渢he most cost-effective way to decrease carbon emissions. And that affects everybody.鈥

Noa Banayan, federal affairs manager听at advocacy group , points out that the purchase price cap hits a sweet spot. It includes almost every utility e-bike sold, even big frontloaders like , but is below the price of some (if not all) high-end enthusiast road and mountain models.

Right now, the act has 10 co-sponsors, all Democrats. But Blumenauer is big on what he calls 鈥渂ike-partisanship.鈥 He points out that the Congressional Bike Caucus, which he founded his first year in Congress, now has over 100 members. 鈥淭wo-thirds of the states are represented,鈥 he says. And he hopes he can count on听Bike Caucus co-chair Vern Buchanan (R-FL)鈥攚ho also sits on the Ways and Means Committee, where the bill is directed鈥攖o help reach across the aisle to build support.

Assuming Panetta and Blumenauer can shepherd the bill to success, there鈥檚 a bigger question: will it lead more people to buy e-bikes and use them instead of driving?

We don鈥檛 know for sure, but indications are encouraging. Because incentive programs aren鈥檛 widespread in the US, there isn鈥檛 good data on behavioral change here. So, People For Bikes looked internationally. One primary resource is听a from , the co-director of Universtiy of California-Davis鈥檚 BicyclingPlus Research Collaborative. Fitch analyzed a set of European studies on听e-bike purchase-incentive programs. 鈥淚ncentives between 20 and 33 percent of the cost were most popular,鈥 Banayan told 国产吃瓜黑料, 鈥渁nd also showed the best factor of increasing adoption and ridership.鈥澨鼳s for switching car trips to bikes, Fitch found that between 35 and 50 percent of reported e-bike trips in the study set would have otherwise been done by car.

According to Banayan, People for Bikes feels the U.S. is ready for large-scale adoption of e-bikes. 鈥淲e鈥檙e seeing anecdotally and through research just how much people are realizing they can do with electric bicycles instead of taking their car,鈥 she said. The range of potential adopters is large. There鈥檚 the longtime bike commuter for whom an e-bike upgrade means a less-sweaty ride to work. There鈥檚 the parent who is tired of being stuck, sedentary, in car traffic while shuttling children to school and sports practices that are in easy riding distance鈥攊f only there was a way to carry both kids and their stuff. And then there are the people who would be interested, if only they knew it was even an option.

That鈥檚 the key: for adoption to happen at real scale, people have to witness that potential and maybe even experience it. , from Portland State鈥檚 Transportation Research and Education Center, looked at what makes an incentive program successful in actually changing behavior. Long-term, personal experience seems to be crucial. A six-week e-bike loaner program at Kaiser Permanente offices in Portland in 2017 led to a doubling in the rate of bike commuting, even after the program ended. And an e-bike 鈥渓ending library鈥 program in Vermont offered week-long trials that resulted in a 17 percent听purchase rate among participants鈥攅ven six months to a year later. The takeaway is that generous federal tax credits may work best if paired with local demo programs, which could increasingly听include听electric bikeshare fleets.

Ultimately, Blumenaer emphasizes that speeding up the adoption of e-bikes has little to do with 鈥減eople in Lycra riding fast.鈥 He defines the E-BIKE Act as a climate change bill first and foremost. But, he quickly adds, “having electric bikes woven into the [urban]听landscape isn鈥檛 just about the potential of significantly reducing carbon emissions.鈥澨鼸-bikes, which are widespread, and increasingly affordable and reliable, are a post-pandemic powerhouse for addressing health problems and livable city issues like pollution, traffic congestion, and transportation equity. And there鈥檚 no time like now to get started.

Lead Photo: deberarr/iStock

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