Last Updated: Feb 12, 2021

On February 9th, 2021, Congressman Jimmy Panetta and Congressional Bike Caucus Chairman Earl Blumenaur introduced the Electric Bicycle Incentive Kickstarter for the Environment Act to the United States House of Representatives. The proposed E-BIKE act has been submitted in order to kickstart and encourage increased demand for electric bikes by way of a tax credit for all United States citizens.

Speaking on his proposed bill, Congressman Panetta had this to say:

“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. 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 incentivizing 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.”

What is the E-BIKE act?

The proposed bill, if passed and signed into law, would result in a full refundable tax credit for those who take advantage of the proposed legislation. While the full rules and regulations surrounding the bill are currently being debated by congress, the following restrictions are part of the current bill:

• The proposed bill would cover 30% of the purchase price of a single eBike once every three years, or twice for joint-return couples who are buying two electric bikes.
• The new electric bike must cost less than $8,000 dollars.
• A $1,500 dollar refundable tax credit is the maxed amount that can be awarded per bike. As such, you would receive the same credit for a $5,000 dollar eBike as you would for a $8,000 dollar eBike.
• This is a fully refundable tax credit. Up to $1,500 dollars can be subtracted from what you owe to the government the year you purchase your eBike. If the total tax credit awarded is more than the taxes you owe, the government will pay you the excess amount.
• The Internal Revenue Service, or IRS, will be mandated to deliver a report regarding the financial results of the proposed bill after two years. Additional adjustments may be made to the legislation based upon the findings, income tax bracket distribution, and equity of the proposed bill.

Because the proposed legislation has only been submitted just this week, it will be several weeks or even months before this proposed legislation will be fully considered or passed. However, several congressional representatives, eBike manufacturers, and members of the eBike community are very excited with the potential that this proposed legislation has. Co-legislation sponsor and founder of the Congressional Bike Caucus Earl Blumenauer noted:

“One of the few positive developments of the last year has been the surge in biking. 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.”

While the bill is undoubtedly a positive sign for the ebike space overall, it still leaves many questions that hopefully will be answered should the bill go through any amendments. Some of the questions cyclists have expressed to us here at EBR include:

• Will the credit only be applicable to bikes manufactured in the U.S.?
• The language of the bill currently states that the credit will apply to only ‘an electric motor of less than 750 watts.’ Is this a mistake in the wording since the legal limit goes up to 750W? Or could that mean that the popular 750w motor ebikes are excluded?
• Should this not also be extended to 3-wheel trikes since those have basically the same benefits of 2-wheeled ebikes?

Understanding Your Tax Credit In Terms of A Real Bike Purchase

While we anticipate that the rules, regulations, and even the tax credit sum received by purchasing an eBike will change by the time the bill is passed, we can make some predictions on how much money you would save.

Whether you’re looking to get your first ebike, or looking to add another one, this credit will go a long way in helping you get your next ebike no matter where you’re shopping on the price spectrum. Popular, lower-cost brands like Aventon or Rad Power Bikes will be more affordable than ever before. Even if you want to look at prices that are more on the premium end like GoCycle or Trek, you’ll be able to save several hundreds of dollars there too.

Here a few examples of what the bike would cost you once you receive your E-BIKE Act credit:

*Bike prices and final credit value are subject to change*

Aventon Pace 500 E-Bike:
Purchase Price: $1,399.00
Tax Credit: $419.70
Total Price After Tax Credit: $979.30

RadWagon 4 E-Bike:
Purchase Price: $1,699.00
Tax Credit: $509.7
Total Price After Tax Credit: $1189.30

GoCycle GX E-Bike:
Purchase Price: $3,299.00
Tax Credit: $989.70
Total Price After Tax Credit: $2,309.30

Trek Allant+9.9s E-Bike:
Purchase Price: $5,999.99
Tax Credit: $1,500.00
Total Price After Tax Credit: $4,499.99

How You Can Support the E-BIKE Act

Speaking for PeopleForBikes, CEO Jenn Dice added:

“Incentivizing electric bicycles makes them a competitive transportation option for more Americans and supports a national effort to lower carbon emissions. The E-BIKE Act positions rightfully electric bicycles as a critical part of a larger solution to climate change and equitable mobility. We’re grateful to Congressman Panetta for leading the charge in Congress.”

PeopleForBikes along with ten other private eBike companies, eBike activist groups, and other parties interested in the growth of the eBike industry have joined in supporting the E-BIKE act. If you would like to show your support and draw attention to the E-BIKE act, we highly recommend that you reach out to your congressional representative by phone or email detailing your support for this legislation.

Fortunately, PeopleForBikes has made it extremely easy for you to show your support for the E-BIKE act. Through a form on their website, you can contact your local congressional representative letting them know you would like to see the bill be passed. You can see a preview of the form below, and by clicking the button it’ll take you to their page where it takes less than a minute to email your congressperson.

How the E-BIKE Act Will Impact the E-Bike Industry and the World

If the final E-BIKE Act is very similar to the proposed legislation, we think that the E-BIKE act will have an overwhelmingly positive impact on the greater electric bike industry. Here are a few ways that we think the eBike industry, and the world, will improve with the passage of the E-BIKE act:

• Increased E-Bike Demand. The main purpose of the E-BIKE act is to get more people to buy electric bikes. Increased eBike demand will lead to greater eBike recognition, which in turn will legitimize them within the public eye as more cyclists ride them.
• Significant Environmental Improvement. In a study conducted by Portland State University, it is estimated that in America, those who purchase an eBike will choose to ride it over a car for 45% of their trips. In a similar study conducted by the University of Brighton, those who purchase a eBike will use it instead of a car 45% to 75% of their trips. Cars are one of the world’s leading sources of C02 emissions, so eBikes would result in a massive drop of annual emissions thanks to their much greener motor system.
• Increased E-Bike Production. Drawn in by the increased customer demand and the tax benefits that come with selling eBikes, we anticipate a continued surge in eBike production. We believe that increased competition leads to better products, resulting in not just more eBike options to choose from, but better eBikes to pick from as well.
• Significant Health and Fitness Improvements. According to multiple studies, electric bikes actually lead to increased fitness and riding time compared to traditional, non-motor bicycles. By having more cyclists switch from a car to an eBike, we expect to see improvements in weight loss, physical fitness, and mental health as more US citizens are encouraged to make the switch to riding eBikes.
• Further Discussions On E-Bike Regulation. As more e-bikes hit the road it will force discussions regarding regulation. Whether that means less regulation or more is anybody’s guess, but we see further talks as a good thing as legislators look for ways for people to ride more and to ride safely.

Visit Electric Bike Report For Up to Date Information on the E-BIKE Act

Passing legislation through the United States House of Representatives and the United States Senate is a long process that often results in significant changes made to any proposed bill. While we are optimistic that the E-BIKE act will be passed, it may be several weeks or months before it is even considered for signing into law, at which point it may be radically different compared to the initial announcement. In any case, should this bill be passed it would be another step forward in the advancement of electric bike usage across the United States.

For up to date information regarding the E-BIKE act, please subscribe to the Electric Bike Report newsletter, and visit our site again in the future for discussions surrounding major updates to the E-BIKE act.