What to Know About the E-Bike Tax Credit and Which States Offer Incentives

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What to Know About E-Bike IncentivesPhoto by Trevor Raab

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We know that in the U.S., transportation generates more greenhouses gases than any other sector. Electric bikes are uniquely poised to put some cars out of commission and provide a way for anyone to become a bike commuter, sans the sweat. And right now, in some states and cities across the country, you may actually be eligible for money back, tax rebates, or other financial incentives when you do buy an e-bike.

“We are seeing so many more e-bikes being sold,” says People For Bikes Electric Bicycle Policy Director Ash Lovell, Ph.D. “The sales really haven’t dropped off post-pandemic—what we’re seeing now is that the e-bikes are continuing to be a really strong part of the market. We think that’s because they make riding so much more accessible for so many different kinds of people. We are so excited about what’s happening in the incentive space: 18 states this year are looking at e-bike incentives of different types, and there are even more at the municipal level.”

The Benefits of E-Bike Incentives

Many states already have incentives for electric vehicle purchases, but e-bikes may be an even more earth-friendly option, says Lovell. “People are starting to recognize that along with incentivizing people to buy electric vehicles, it’s even more climate-friendly to buy an e-bike and replace car trips in general,” she says. “We know that the majority of trips that Americans take are three to five miles, and that’s a perfect distance for an e-bike."

E-bike incentives don’t just push cyclists to add another bike to their garage—they may create new cyclists. “Initial data from a survey we’ve done shows that a lot of the people who are buying an e-bike didn’t have a bike beforehand,” Lovell says. “So we’re creating new cyclists, not just converting people that rode bikes before.”

People for Bikes is particularly excited about the number of young people and women who are coming to cycling through e-bikes. “Having people see cycling as both a way to stay healthy and a valid mode of transportation is so important,” Lovell adds.

A new survey from e-bike conversion kit brand Swytch Technology, found that 29 percent of respondents said they’re now resorting to “active transport” when commuting to work to reduce travel emissions. But the cost of an e-bike can be prohibitive for new riders, especially if you’re looking for a bike capable of carrying cargo, as well as a rider.

What to Know About the E-Bike Tax Credit

To help with this, the Electric Bicycle Incentive Kickstart for the Environment (E-BIKE) Act has been proposed federally and would create a refundable tax credit amounting to 30 percent of an e-bike’s price, capped at $1,500. But the jury is still out on when (and if) this Act will get passed.

However, while incentives are interesting, it’s arguably more important (or equally important) to have money put into improving safety aspects around cycling. Creating protected bike lanes, connecting more neighborhoods via bike lanes, providing safer ways to leave bikes locked outside of businesses—these are also critically important when it comes to getting people to actually use their new e-bike, says Lovell.

“If there aren’t safe and connected places for people to ride, then you give them a bike that’s just going to sit in their garage,” Lovell notes. “You need municipalities on board with bike programs, and people need their workplaces to be on board. So, we do see a need for a more broad, systemic approach to making cycling more accessible. The incentives are important, and much needed, but they’re only part of the puzzle.”

While we’re still waiting with bated breath for the E-BIKE Act to kick in on a federal level, many states and cities have introduced their own e-bike incentive programs. Here are the ones we know about now—but even if your state or city isn’t on this list, check your local government’s website or local power company, as many of them have recently launched their own programs. There are new small-scale rebates and initiatives launching all the time for new e-bike riders.

States That Offer E-Bike Incentives

1. California

Legislation in progress: California’s E-Bike Affordability Program gives residents a voucher to take up to $1,000 off an e-bike’s purchase cost or up to $1,750 for an adaptive e-bike or cargo e-bike. Learn more here.

If you live in Contra Costa County, Healdsburg, Monterey, Santa Barbara, San Bernardino, Riverside, Orange, and Los Angeles Counties, Santa Clara, Santa Cruz, San Diego, or the San Francisco Bay Area, check your local programs, as each area offers its own e-bike incentives.

2. Colorado

Colorado’s Air Quality Improvement Investments Bill included modest e-bike rebates for middle- to low-income households, and while it passed last year, the e-bike rebate program is set to begin this summer. Learn more here.

Denver: You can get an e-bike rebate from $200 to $1,400 for purchases made through participating bike shops. Learn more here.

3. Connecticut

Connecticut’s Clean Air Act gives residents in a set income threshold at least a $500 rebate on e-bike purchases under $3,000. While the Act passed last year, the e-bike rebate program is set to begin this summer. Learn more here.

4. Washington D.C.

Legislation in progress: Bill 25-32 would establish an electric bicycle instant rebate program for residents and certified business enterprises for the purchase and use of electric bicycles and cargo electric bicycles. It’s sitting in the legislative committee now. Learn more here.

5. Hawaii

Thanks to Act 306 passing last year, Hawaii residents will receive 20 percent e-bike rebate, with a maximum of $500. However, it’s only available for students, those who qualify for certain low-income assistance programs, and don’t own a motor vehicle with four or more wheels. Learn more here.

6. Illinois

Legislation in progress: Introduced to the General Assembly in March, this bill would modify the Electric Vehicle Rebate Act. If passed, beginning July 1, 2024, and continuing as long as funds are available, a person may apply for a rebate in specified amounts following the purchase of an electric bicycle in Illinois. (Contains eligibility requirements, like requiring the person who is awarded a rebate to retain ownership of the electric bicycle for a minimum of 12 consecutive months.) Learn more here.

7. Iowa

The Eastern Iowa Light & Power Cooperative provides rebates for “residential outdoor battery-operated equipment” including e-bicycles for customers in Eastern Iowa. The rebate is available for 25 percent of the cost, up to $150 total. To qualify, you must have an account with the company and provide a receipt. Learn more here.

8. Maine

Legislation in progress: A motion to add e-bike purchases to the Electric Vehicle Rebate Program is in the legislative committee now. Learn more here.

9. Massachusetts

The Massachusetts Transportation Bond Bill includes an e-bike rebate of up to $500 for anyone, with up to $750 for low-income residents. The rebates are offered via designated local bicycle stores. While the bill passed, there still aren’t any dates in place for when the e-bike rebates will begin. Learn more here.

10. Michigan

Legislation in progress: Introduced last year, the Michigan e-bike transportation incentive program act would create discount vouchers for e-bike purchases. Currently, the Act is sitting in draft version. Learn more here.

11. Minnesota

Legislation in progress: Introduced to the legislative committee this year, if passed, this bill would give e-bike buyers up to a $1,500 tax credit for e-bike purchases. Learn more here.

12. New Jersey

Legislation in progress: If passed, Bill A5350 would establish a rebate program for purchase of electric bicycles (with a budget for the project of $250,000). It’s sitting in the legislative committee now. Learn more here.

13. New York

Legislation in progress: There may be rebates of up to 50 percent on e-bike purchases (capped at $1,100) coming soon to New York State if the Ride Clean e-bike program passes. Learn more here.

Brooklyn and Bronx: The Equitable Commute Project subsidizes up to 50 percent of the purchase price of e-bikes for qualifying Brooklyn- and Bronx-based commuters. Learn more here.

New York City: Uber recently launched an initiative for delivery workers to replace old e-bike batteries with newer, safer models or take part in a rent-to-own purchasing program with a partnering e-bike company. Learn more here.

14. Oklahoma

Legislation in progress: Bill SB 435 would give cyclists a $200 tax credit toward new e-bike purchases. Learn more here.

15. Oregon

Legislation in progress: A motion to provide rebates to qualifying individuals is in the legislative committee now. Learn more here.

16. Texas

Austin: Rebates available starting at $200 for customers of Austin Energy who purchase an eligible, new e-ride vehicle. Learn more here.

17. Vermont

In 2022, e-bike rebates up to $400 per person, depending on income were offered, but the fund was exhausted within a month. To be determined if it reopens. Learn more here.

Small scale programs are currently available to some residents in Burlington, Colchester, Stowe, and many towns serviced by the Vermont Public Power Supply Authority. Learn more here.

18. Washington

Legislation in progress: Legislatures are considering a bill that would make e-bike purchases exempt from sales tax, as well as a bill that would provide up to a $1,200 tax credit for electric bikes. It has passed in the senate, but it still needs the governor’s signature, as well as information on how it will be funded. Learn more here.

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