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E-Bike Tax Credit: What is it and how does it work

E-Bikes continue to grow in popularity as a reliable, eco-friendly, and versatile transport option. The bicycle boom of 2020 saw more and more Americans start cycling on traditional and electric bikes. Riders have increasingly adopted eBikes for commuting, Overlanding, hunting, and fishing. Soon, eBike adopters may even be rewarded with a tax credit on their eBike purchases. 

Electric bikes have many benefits, including being a low emission alternative to cars or gas-powered four-by-four vehicles. E-Bikes can help riders get more exercise while reducing emissions and traffic congestion. Two congressmen recognized these benefits and proposed a bill in early 2021 called the E-Bike Act to incentivize electric bikes. The incentives proposed under the Act could be similar to those previously offered for electric cars, which encourage Americans to switch to modes of transport that are more environmentally friendly. 

A hunter rides his QuietKat electric bike up a steep hill.

What is the E-Bike ACT?

The E-Bike Act is an act introduced by Congressman Jimmy Panetta (D-Calif.) and Earl Blumenauer (D-Ore.) on February 11th, 2021. The Act is officially known as the Electric Bicycle Incentive Kickstart for the Environment (E-BIKE) Act. The Act’s purpose is to encourage further use of eBikes or electric bicycles by offering a consumer tax credit against income taxes.

The Congressmen support the use of eBikes as a means of transport that can provide greater distance, speed, and accessibility while helping to reduce carbon emissions. Congressman Earl Blumenauer is also the Congressional Bike Caucus Chairman and a known bike enthusiast.

The Congressmen believe eBikes should be widely available as a legitimate and practical form of transportation that helps to reduce carbon emissions. Electric bicycles have the potential to reduce car trips and car emissions by providing a fast and reliable alternative transport method. 

E-Bikes keep people moving quickly and efficiently in both city and rural environments. They are also suitable for all kinds of riders, no matter their age or physical abilities. While eBikes reduce the strain of pedaling and physical exertion, they can still be a great form of exercise.

As the government looks to reduce carbon emissions and combat the climate change crisis, several congressmen and women have recognized the role electric bicycles can play in taking cars off the road. They acknowledge that eBikes are an alternative mode of transport that helps keep people moving, active, and connected without negatively impacting the environment. 

Two women sit on a bench by their parked QuietKat electric bikes near a cafe.

What electric bikes would qualify for the tax credit?

A qualified electric bicycle is defined in the Bill as a “two-wheeled vehicle that is, among other things, equipped with an electric motor of fewer than 750 watts that is capable of propelling such vehicle”. This definition will include most QuietKat bikes and other top electric bikes currently on the market, except those with 1000 watt motors.

Eligible eBikes must be a class 1 electric bicycle, a class 2 electric bicycle, or a class 3 electric bicycle and equipped with the following:

  • An electric motor under 750 watts 
  • Pedals capable of propelling the vehicle
  • A saddle or seat for the rider

The bikes must be purchased in the United States by the taxpayer. The bike must also be new, not a lease or second-hand purchase. 

How much tax credit would I get from the E-bike tax credit?

The Electric Bicycle Incentive Kickstart for the Environment Act creates a consumer tax credit that can cover up to 30% of the cost of buying an eBike. The credit has a limit of $1,500, or 30% of the total cost, whichever is less. This credit amount would be doubled in the case of a joint tax return where two family members purchased eBikes. The credit would be available to individuals once every three years.

What is the status of the E-Bike Act? Has it passed?

So far, the E-Bike Act is just a Bill; it was introduced in February 2021 and has not passed at the time of writing. The Act currently has twenty co-sponsors.

Use the links below to contact your state's representative to let them know that you support the E-Bike Act using the list below:

The path to make the Act law is long and complex. The Bill needs to pass in the House, then pass in the Senate, and be approved by the President before becoming a law.

However, there is a precedent for the Act to have support. The federal government has previously used economic nudges to address the climate change crisis. In addition, they have previously tackled widespread behaviors, like driving, with incentives to switch to electric vehicles. The introduction of buyer tax credits for hybrids and plug-in electric cars and other vehicles proved very successful, and eBike enthusiasts hope this Act would see similar success. 

Switching to eBike riding can certainly reduce our carbon footprint because bikes are 25 times more energy-efficient than a car. However, at present, financial incentives for eBikes only exist at a local level and in California. California’s Senate Bill 400 expanded the state’s incentives for trading in old, polluting cars for vouchers that can be used for bike share and eBikes. But the E-Bike Act, if passed, would be the most financially rewarding eBike incentive currently available in the USA.

A QuietKat Jeep eBike is parked next to a white Jeep Wrangler

How to support the E-Bike Tax Credit

Offering financial incentives to buy electric bikes helps make them a more affordable and attractive transportation option for average Americans. If passed, the E-Bike Act would give more people affordable access to quality electric bicycles, ease traffic congestion and help us lower the country’s carbon emissions, all while keeping Americans active and healthy.

If passed, the Act would benefit not only urban commuters but all eBike users. Hunters, anglers, and overlanders who enjoy using eBikes recreationally would all be eligible. 

The advocacy group, People For Bikes, has supported the Act and has made it easy for eBike enthusiasts to email their representatives. If you’d like to help pass the Bill, click here to encourage your local representative to co-sponsor the Bill.

Conclusion

If it passes, the E-Bike Act will make electric bikes more accessible and have a massive benefit to the environment. The price limit would cover the entire QuietKat range of electric bikes, making it even easier for riders to switch to eBiking.

Owning an eBike opens the door for endless possibilities. There are countless backcountry trails and hard-to-reach hunting spots that our electric mountain bikes can help you reach. You’d be hard pressed to find backcountry terrain our electric bikes can’t handle. With an eBike, you can explore so much more than you can with a traditional bike and do your bit for the environment. Explore the full range of QuietKat eBikes today.

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