Proposed E-Bike Tax Incentive Could Reduce The Number Of Cars On The Road

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Photo: Rad Power Bikes

Millions of e-bikes are sold every year, and some predictions point to impressive growth, with as many as 17 million sales by 2030. While Asia and Europe have been quite quick to adopt the electric-assisted two-wheeled life, the U.S. market has been a bit softer, but is intent on catching up. In 2019 American consumers purchased just 270,000 units. A pandemic-induced run on e-bikes saw sales in this country more than double to over 600,000 sold, and even at that number demand wasn’t sated.

A bill introduced last month—HR 1019, the Electric Bicycle Incentive Kickstart for the Environment Act, or E-BIKE Act—aims to provide a federal tax incentive to consumers. If passed, in effect, the bill would provide a 30 percent tax rebate discount based on the MSRP of the e-bike you purchase, with a maximum tax incentive of $1,500.

“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 Rep. Panetta in a statement. “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.”


The idea here is to replace at least some of America’s car dependency with an easy and fun to ride alternative which is much more environmentally friendly. By replacing just 15 percent of car rides with an e-bike journey, we could reduce greenhouse gas transportation emissions by double digits. And with e-bikes requiring far fewer rare earth elements for their much smaller batteries, they’re much more environmentally friendly than electric cars as well.

The E-BIKE Act’s proposed incentive is a great step in the right direction, but it feels slightly half-assed to me. By capping the incentives to bikes retailing under $8,000, there are many premium e-mountain bikes largely built for wealthy cyclists which would be included. By only giving a 30 percent incentive, something like a $1,099 Rad Power Bikes Radmission commuter bike would still cost around $770. It’s helpful, but it may not do quite enough to get America’s working poor on the e-bike path.

Thankfully the E-BIKE Act would not incentivize anyone to purchase Porsche’s ridiculously expensive carbon-fiber Sport e-bike.


If it were me, I would drastically lower the MSRP cap to under $4,000 and increase the tax incentive to perhaps a flat $1,000 for anyone who adopts the e-bike life, regardless of how inexpensive a bike they choose. This would be a progressive incentive for the people who need it the most. Not only would it help mobilize city-dwelling blue collar workers who have been hit hardest by the economic fallout of the Coronavirus pandemic, but it would direct those incentives at bikes more intended for daily commuting than those best reserved for weekend toys.


Maybe it’s just my opinion here, but people buying an $8,000 bike don’t need a $1,500 tax credit.

I’m not rooting for the E-BIKE Act to fail, in fact anything that reduces America’s dependence on car commuter culture is a win in my book. I do wish it were more laser-focused on helping the impoverished. Perfect is the enemy of good, as they say, however, so for now I’ll take anything I can get.


The bill was introduced to the house of representatives last month, and is currently under review by the House Ways and Means committee. Obviously such a plan fits cleanly in President Biden’s sweeping initiatives to reduce emissions and get the U.S. on the path toward carbon neutrality. Once some of the red tape has been cut and the bill actually gets into rotation, it should receive widespread support, as many American companies in many American states build e-bikes, meaning jobs. Jobs are good.