When President Joe Biden’s Build Back Better (BBB) act died this year, it took with it a highly anticipated tax credit for e-bikes. That credit, a long-sought goal of Rep. Earl Blumenauer (D-OR), would have provided a tax credit of up to $900 on e-bikes costing under $4,000 for qualifying individuals.
Now that pivotal Senate swing vote Joe Manchin (D-WV) has a climate-bill deal with Majority Leader Chuck Schumer (D-NY), some of the provisions of BBB are back in the game. The bill—if passed—would provide almost $370 billion in federal funds to fight climate change, including a generous tax credit for purchasing an electric vehicle: up to $7,500 for new vehicles made in North America and—importantly—$4,000 for used ones (there are vehicle price and buyer income caps on both credits). It’s not BBB, but consensus among green energy and sustainability advocates seems to be that it’s a good bill.
Unfortunately, the e-bike credit is nowhere to be found. That’s a shame. There is—technically speaking—still time to put it back in, although the bill is moving quickly in the Democratic-controlled Senate because of both its political importance to the party and its status (a reconciliation bill, it can pass in the Senate with just 51 votes). There’s no guarantee of passage, or that the bill won’t change substantially; there’s fierce lobbying taking place right now. The chamber’s other swing Democratic vote—Arizona’s Kyrsten Sinema—didn’t say she was on board until late Thursday night.
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But whether an e-bike tax credit somehow gets into the climate bill or is the subject of future legislation, it’s absolutely a worthwhile piece of public policy, and speaking up now helps lay the groundwork to get it enacted some way, some how. So, if you have strong feelings about stuff like more people riding bicycles, and/or preventing our species from cooking the planet, now’s a good time to speak up. You can find your Senators’ contact information here.
Contrary to cynical belief, constituent voices do matter, and original comments matter more than form letters. Here are some broad points to consider as you craft your thoughts:
An e-bike tax credit is about effectiveness, not fairness
Yeah, it’s a bummer that huge electric SUVs qualify for a fat tax credit but not bikes. But complaints about fairness probably won’t move lawmakers to act. What might? Points about effectiveness, and in terms of an ability to make an impact on emissions, e-bikes are peerless. And since transportation accounts for 27 percent of all greenhouse gas emissions in the U.S.—the largest single sector—it’s the place where we can make the biggest impact by changing behavior.
When comparing vehicles on climate impact (two-wheel or four, electric or internal-combustion) the most useful framework is to look at their total lifetime carbon emissions. Tesla says each Model 3 will produce 36,000 kilograms (about 40 tons) of carbon emissions over its life, including the cost to manufacture it. Compared to an internal-combustion vehicle, that’s good. But Trek’s sustainability report estimates that producing an e-bike requires about 200-240kg of carbon, or about 1/150th of the Tesla total. Even on another comparison basis, grams of CO2 produced per mile traveled, e-bikes are 10-20 times more efficient than EVs.
That’s partly because they’re so much less carbon-intensive to produce, and also because they simply operate far more efficiently. E-bike batteries are tiny compared to EV batteries, requiring just 2-3 percent of the energy to charge that an EV does. And they’re hybrid vehicles, thanks to the human power source. So charging costs are tiny: even riding an e-bike enough to fully discharge the battery every day, you'll pay $10-$50 a year to recharge it, depending on regional electric rates. That's a direct reflection of how much electric energy those batteries use.
Demand is there, and the cost is low
Last April, the city of Denver started offering instant rebates on e-bike purchases, including a premium for income-qualifying residents and an additional incentive for e-cargo bikes (e-mountain bikes weren’t eligible). It was so popular that 3,000 applications were filed in just three weeks, halting the program temporarily. Notably, over half the rebates that were granted in the first round went to income-qualified buyers, a strong sign that the bikes are being used for everyday transportation. California will start its own e-bike rebate program later this year, and anticipation is similarly high.
The price tag for a federal e-bike credit, compared to the EV tax credit, is higher than you'd think. The official Joint Budget Committee cost score for the original bike tax credit in BBB was $7.4 billion over 10 years, almost identical to the cost of the EV tax credit for new vehicles in the current bill (used EVs get their own budget score line). But that comparison misses the projected demand for both options. The EV tax credit cost assumes 1 million new qualifying EVs will be sold over the next decade. In comparison, the e-bike tax credit budget score is based on an estimated sales volume that is literally 10x that size. That might be realistic: bike companies sold almost 900,000 e-bikes last year alone in the U.S., far outstripping EV sales.
Denver’s credit illustrates the math. Out of those 3,000 initial applications, the city ended up handing out 863 rebates in the first round at a total cost of $716,156, meaning that each purchase of an e-bike cost roughly a 10th of the maximum tax credit offered to eSUV buyers in the federal bill. So think about it: for the same price over one decade, we could replace a million internal-combustion cars with electric cars, or we could put 10 million e-bikes into riders’ hands to replace car trips. Take a climate intervention that does 10x the sales numbers of EVs, is at least 10x more effective at curbing CO2 emissions, and comes at a per-unit cost of 1/10th that of the EV program and what do you get? A wildly effective, cost-efficient tool for fighting climate change. But that's not all.
E-bikes solve other problems that EVs don’t
The problem with electric cars is that they’re still cars. They still cause traffic jams, contribute to harmful levels of noise near busy roads, and shed particulate pollutants from brakes and tires. Because the vehicles are heavier than their internal-combustion engine counterparts, they create more wear and tear on roads (and far more than lightweight e-bikes). Their occupants are still sedentary and get no direct health benefit from switching to an EV. And they can still drive distracted or angry, which runs the risk of turning these large, faster-accelerating machines into kinetic energy weapons around cyclists and pedestrians.
E-bikes, on the other hand, are quiet. They’re small and slow enough to cause almost zero damage to streets, and their light weight and relatively low speed also makes them significantly less dangerous to other road users, especially cyclists and pedestrians. They create negligible pollution of any kind. Because you can fit far more of them into a given section of road, there are no traffic jams. They make cities quieter, safer, and more pleasant places to live while offering health benefits to their users.
For all those reasons, if you’re looking for the best return on transportation-related climate investments, there’s no better way—whether measured on total emissions reductions, the cost effectiveness of those reductions, or ancillary benefits—than incentivizing people to buy e-bikes for utility cycling. Adding back the e-bike tax credit wouldn’t just be a win for bikes; it would be a win for the climate, for livable cities, for safety, for all of us.
