Proposed US e-bike tax credit could kickstart Biden's clean energy revolution

New bill aims to incentivise e-bike use through a tax break of up to $1,500

(Image credit: Getty Images/Westend61)

US congressman for California’s Central Coast, Jimmy Panetta, has introduced a bill to Congress named the Electric Bicycle Incentive Kickstart for the Environment (E-BIKE) Act that aims to incentivise e-bike use through a tax credit. This would, he said, “replace car trips, encourage the use of greener transportation and fight the climate crisis.”

Panetta, together with Congressional Bike Caucus Chairman Earl Blumenauer, proposes a consumer tax break that would cover 30 per cent of the cost of an e-bike up to a $1,500 credit, and could be applied to new electric bicycles that cost a maximum of $8,000.

In a press release Congressman Panetta quoted a 2020 study by researchers based at Portland State University that found that if 15 per cent of car trips were made by e-bike, carbon emissions would drop by 12 per cent.

“E-bikes are not just a fad for a select few, they are a legitimate and practical form of transportation that can help reduce our carbon emissions,” said Panetta. “My legislation will make it easier for more people from all socio-economic levels to own e-bikes and contribute to cutting our carbon output. By incentivising the use of electric bicycles to replace car trips through a consumer tax credit, we can not only encourage more Americans to transition to greener modes of transportation, but also help fight the climate crisis.”

Panetta highlighted the switch to e-bikes that was already taking place: he quoted a North American survey finding that 46 per cent of e-bike commute trips replaced automobile commute trips, and that a more thorough review of European studies showed that e-bike trips replaced car trips 47-76 per cent of the time.

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“One of the few positive developments of the last year has been the surge in biking," said Blumenauer. “Communities large and small are driving a bike boom. Notably, electric bicycles are expanding the range of people who can participate and making bike commuting even easier. I look forward to working with Congressman Panetta on this important expansion of cycling opportunities.”

The E-BIKE Act is already supported by PeopleForBikes, the League of American Bicyclists, the California Bicycle Coalition, Bike Santa Cruz County, Bicycling Monterey and other cycling, environmental and recreation-focused organisations. Panetta and Blumenauer will now need the bill to pass through the House of Representatives and the Senate before it reaches the desk of the president. Given that President Biden has already launched his plan for a clean energy revolution and environmental justice, it would seem there’s a good chance of it being signed into law.

In the UK, the Cycle to Work scheme was updated in 2019 to cover e-bikes worth over £1,000, but there’s no UK scheme comparable to the one proposed in the US as yet. However, in November 2020 the Times reported that the price of e-bikes could be cut by a third under government plans to offer a “sweat free” alternative to conventional bicycles: “Ministers will launch a taxpayer-backed scheme to boost the number of people using battery-assisted bikes, appealing directly to commuters riding in business outfits and those who are older or less fit.”

According to the Times, trials of the programme would begin in the next five months before details of a full-scale support package would be released in the spring.

Although the details are yet to be finalised, the Times claimed to have learnt that the government favours a system of direct subsidies similar to grants for plug-in cars, motorbikes, vans, taxis and trucks, where a maximum of £3,000 is available.

European countries including France, Norway and Sweden already offer e-bike subsidies.

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