Tech

Electric bikes in the U.S. could soon get a 30 percent federal tax credit

Electric cars and motorcycles already benefit from federal tax incentives in the U.S. so adding e-bikes would make sense.

San Francisco Chronicle/Hearst Newspapers via Getty Images/Hearst Newspapers/Getty Images

Demand for electric bikes has never been higher, and that trend could be turbocharged if a bill introduced today is signed into law, Electrek reports. The Electric Bicycle Incentive Kickstart for the Environment (E-BIKE) Act would create a 30 percent tax credit of up to $1,500 for buying an electric bicycle priced below $8,000. The bill is being spearheaded by Representatives Earl Blumenauer (D-OR) and Jimmy Panetta (D-CA).

E-bikes are an environmentally friendly way of getting around, and they're less taxing on riders than a traditional pedal bike thanks to an electric motor that either offers a boost or does all the heavy lifting, depending on the style of e-bike. That means people who might otherwise be reluctant to consider cycling as a viable means of transport may reconsider... especially if they can get a 30 percent discount on an e-bike.

Cleaner, better cities — There already exist federal tax credits for electric cars, but encouraging the adoption of electric micro-mobility vehicles like e-bikes and scooters would be especially good for cities around the U.S. The footprint of cars is massive, and not just in the form of emissions. Huge swaths of cities are used as storage for cars that sit empty throughout the day. By freeing up that space, cities could introduce more public spaces, affordable housing, sporting facilities, or other civic-focused initiatives. Plus, making cities more bike-friendly tends to reduce bike-related injuries.

Lyft operates a dockless e-bike service in several U.S. cities. San Francisco Chronicle/Hearst Newspapers via Getty Images/Hearst Newspapers/Getty Images

Incentives for whom? — The question is, does a 30 percent tax credit put incentives in the right place. It's possible that e-bike manufacturers would raise their prices to earn more profit — Tesla, for instance, reduced the prices on its cars in conjunction with credits being phased out. Or consumers might use the credit to buy recreational e-bikes and continue using other forms of transportation for their regular commutes — the bill only specifies that bikes can have a maximum motor size of 750 watts.

In that sense, the E-Bike Act is a crude and indirect way to target carbon emissions. But we'll take it. Especially as it's more likely to pass legislators than other suggestions. Increasing the excise tax on gasoline, for instance, which is a targeted idea intended to reduce the use of polluting transportation, might not pass Democratic muster however, as such an idea is considered regressive and harmful to lower-income demographics.

Try everything — Still, with the clock ticking on the fight against climate change, a blanket tax credit on e-bikes could be but one piece of a multi-pronged solution. In the grand scheme of things, it wouldn't cost the government very much if it helps in any way ensure the health of future generations. And anyway, we know where to find the money — just revive the higher income taxes of yesteryear.

President Joe Biden has been outspoken in his support of transitioning away from fossil fuels and toward clean energy. Whether this specific proposal makes it into law or not, it's likely we'll continue to see more proposals like it going forward.