E-Bikes In The Fast Lane: How Buyers In 19 States Are Getting Big Rebates
With a boost from a growing number of cities and states, the souped up two-wheelers are increasingly displacing cars for short trips — and outselling EVs.
By Rina Torchinsky, Forbes Staff
Last Tuesday, at 11 a.m. local time, the city and county of Denver put the latest batch of applications for e-bike rebates online. By 11:07, all 1,100 of them were gone.
That’s par for the course, says Sarah Thorne, a senior program manager at the Colorado Energy Office, who snagged a $900 Denver rebate herself last year within two minutes of a similar portal opening. After applying the rebate, she shelled out about $1,400 for an e-cargo bike that she uses for trips to Costco and the local grocery store and to pick up her one-and-a-half year old daughter from daycare – effectively replacing what would have been car trips, with the “minivan” of e-bikes. “Honestly, I don’t really drive anymore,” says Thorne. “I pretty much use my e-bike for everything.” She even relies on her e-bike for her six mile commute to work, which she used to do via bus.
Sarah Thorne, who snagged a Denver e-bike rebate, with her daughter on her orange e-cargo bike.
Courtesy of Sarah ThorneThe car-addicted U.S. has traditionally been a laggard in the adoption of e-bikes. But sales of the battery-powered motor-assisted two-wheelers, which can reach a maximum assisted speed of 20 miles per hour (or for some models, 28 mph) have finally taken off. The Light Electric Vehicle Association estimates the U.S. imported a record 1.1 million e-bikes last year, up from 880,000 in 2021 and 450,000 in 2020– a good proxy for the growth of the total import-dominated market. In sheer unit numbers (though obviously not dollars) e-bike sales have outpaced U.S. electric car sales, which jumped to 809,739 in 2022, according to Kelley Blue Book.
Now, a growing number of state and local rebate programs are helping to keep the momentum going for e-bikes, which, in contrast to electric cars, don’t qualify for federal tax credits.
An e-bike incentive tracker developed by Portland State University’s Transportation Research and Education Center shows 62 currently active programs offered by states, localities, local power districts and other entities. These incentives are distributed across 19 U.S. states, with California and Colorado offering the most. Moreover, there are an additional 17 approved (but not yet launched) programs, eight pilot programs and more than 30 programs listed as proposed. Counting all those, interest in e-bike incentives has spread to 29 states and the District of Columbia. (The tracker was last updated on September 18th.)
“I call 2023 the year of the e-bike,” says John MacArthur, who manages the Sustainable Transportation Program at Portland State and is co-creator of the tracker. The spread of e-bike incentives in the last year has been dramatic, he adds.
E-bikes start at around $1,000, though higher end bikes (with more powerful motors and longer lasting batteries, for example) can run up to $6,000, or more. Models designed for delivery workers (or parents with groceries and toddlers they want to transport) range from about $2,000 to nearly $9,000. The incentive programs vary greatly in their generosity, with around a third of active and approved programs offering additional incentives to people who are lower income. Denver’s program currently offers at least $300 for any Denver resident who can snag a rebate, but up to a $1,400 rebate for lower income residents buying e-cargo bikes.
MacArthur says buyers want to see the discounts at the point of purchase, as opposed to a tax credit or refund collected later. A rebate linked to an in-store sale also adds a human element, observes Chris Cherry, a professor in civil and environmental engineering at the University of Tennessee. “Having that kind of personal connection is an important part of the process. I think that would be something that would be a little bit lost with a tax rebate, where you click a square on your tax rebate forms.”
Some programs have a set amount of money allocated to them, meaning the available rebates are limited. So, for example, last month the Washington, D.C. council approved what sounds like an extraordinarily generous program—up to $2,000 for a low income resident buying an e-cargo bike. But the amount appropriated for the total program was just $500,000 for the year beginning Oct. 1. A few of the programs are part of broader efforts aimed at reducing carbon emissions from older gas powered cars. Vermont’s Replace Your Ride program, for example, grants vouchers of up to $5,000 to residents who swap old gas-guzzlers for new or used plug-in cars, or an electric bicycle. The state also offers vouchers of up to $400 for e-bikes, or $800 for e-cargo bikes.
While e-bikes are not the vehicle of choice for long distance trips, evidence is growing that they can reduce car use for local chores. Denver studied the first residents who got rebates last year and found they rode their e-bikes an average of 26 miles per week, replacing 3.4 round-trip vehicle trips. More than 70% said they were using their gas-powered cars less.
In fact, according to the U.S. Department of Energy, more than half of all vehicle trips in 2021 were less than three miles–a distance which would take around nine minutes on an e-bike, assuming the rider travels at a speed of 20 miles per hour. Federal law specifies a 20-mile maximum speed for e-bike travel with motor power alone, but the Consumer Product Safety Commission, which regulates e-bikes, has clarified they can travel faster than 20 miles per hour when it’s via a combination of human and electric power; Class 3 e-bikes can do a combined 28 mph. Motorcycles are regulated separately by the National Highway Traffic Safety Administration.
Of course electric cars are a lot pricier, with an average cost of $53,469 for new ones, compared to $48,334 for gas powered autos, according to July data from Cox Automotive, parent of Kelley Blue Book. But there’s a hefty $7,500 federal tax credit available for eligible electric vehicles thanks to the Inflation Reduction Act–that grab bag of green incentives Congressional Democrats pushed through in 2022. Beginning next year, that credit will even be available from the dealer at the time of purchase. An electric bike credit was included in an early version of the IRA, but didn’t make the final cut.
This past March, several Democratic congressmen introduced the E-BIKE Act, which would provide a refundable tax credit of up to 30% of the purchase price of a new e-bike, with a maximum credit of $1,500. The full credit would be available for single filers who make less than $150,000 and for joint filers who make less than $300,000. A companion bill was introduced in the Senate. Neither has gone anywhere and the idea would seem to have little chance of getting through the Republican controlled House.
10 For The Road
The following are some of the more generous e-bike incentives currently being offered. You can see all the rebates here.
Rep. Earl Blumenauer, the Oregon Democrat and bicycle devotee who founded and cochairs the Congressional Bike Caucus, isn’t giving up. “If not this Congress, the next Congress will be able to get it across the finish line,’’ he told Forbes.
Still, the Urban-Brookings Tax Policy Center’s Renu Zaretsky says a federal tax credit might not be the right policy tool in this case. People are buying the bikes anyway, she notes, and this would grant a tax break to folks who would buy e-bikes without it. “I like the idea of any policy that's trying to encourage broader use across income groups. And if it's targeting low income groups (as many of the local rebates do), I think that's a good thing,” she says.
Significantly, the Denver study of early rebate users found that the lower income folks who got the larger vouchers used their new e-bikes nearly 50% more than standard voucher recipients–suggesting the program’s targeting made sense. One common provision of the local rebates that couldn’t be done on a national basis: More than half of active and approved e-bike incentives require or reward buying locally, thus encouraging the development of a local dealer and service network.
Martin Rahmani is co-founder and chief revenue officer of The Hub Bicycles, a Covid era start-up that rents and sells e-bikes and e-trikes to both delivery services and consumers from its original Queens, New York dealership. The company opened a Colorado outlet in 2022 after it won a contract from the Denver Climate Action, Sustainability and Resiliency office to bring its e-bike delivery services to the city. The individual Denver rebates, a satisfied Rahmani reports, have helped “open up the market to a whole lot of people who may not have considered e-bikes as a viable form of transportation.”
MORE FROM FORBES
After several years of false starts, electric bikes are finally entering the American mainstream, amid booming sales of a multiplying number of models on offer and as more states offer incentives for people to ditch their cars and shift to two, motor-assisted, wheels.
This year could be considered “the year of the ebike”, according to John MacArthur, a transport researcher at Portland State University. Ebike sales in the United States leaped by 269% between 2019 and 2022, with the market size expected to have grown further in 2023, to be worth $2.59bn.
While ebikes took off in other parts of the world the US was slow to catch on, until the Covid pandemic, when streets were closed off, public transit numbers dropped and people were looking for alternative ways to get around. This, combined with city and state efforts to cut pollution from transportation to meet climate goals, has helped fuel an ebike surge that has no sign of abating.
“All these converging trends means that I think we’ll look back at this year and think this was an important moment,” said MacArthur. “Ebikes are in the zeitgeist, people are talking about them. They are inclusive of everyone. Even my mom is thinking of getting one.”
Nationally, Joe Biden’s administration has been fixated on shifting people from gasoline cars to electric cars, with tax credits worth up to $7,500 to people who want to get an EV. But there is no comparable federal support for buying an ebike, even though sales of ebikes now outstrip that of electric cars and many experts point to the superior benefits of the two-wheeled version, which emits less air pollution from tire wear and are safer in road accidents.
In lieu of this, there are more than 100 city and state-based incentives to boost ebike adoption across the US, according to a database compiled by MacArthur. One of the most significant ebike support packages could soon be put in place by New York, with the state senate passing a bill that offsets 50% of the purchase of a new ebike or electric scooter, up to $1,100.
A man rides an ebike through Times Square in New York City.
Photograph: VIEW press/Corbis/Getty ImagesJabari Brisport, a Democratic New York state senator, said despite a delay he is optimistic that the bill will pass the lower house, the New York assembly, and be signed by the governor. “I haven’t heard of any pushback to the bill,” said Brisport, who occasionally uses a publicly shared ebike to get to his Brooklyn office.
“There is a lot of focus on moving people from one type of car to another type of car but there are other modes of transportation and ebikes are one of them. They are a low-carbon form of transportation that are great for getting around the city for short trips.”
Ebikes add a battery and a motor to the classic bicycle frame and provide a helping hand, as if someone were pushing at your back, when pedaling. There are different classifications of ebikes – some, with throttles that power the ebike independently of pedaling, can reach as fast as 28mph – but all are considered climate-friendly, even more so than electric cars. Globally, there are about 280m electric mopeds, bikes and scooters and, combined, these vehicles are already cutting demand for oil by about a million barrels a day.
But the rise of ebikes has greater connotations than just climate change, MacArthur points out. You can now get foldable ebikes, for commutes, or large cargo ebikes that can carry 550lb in weight. They can be used by people of different physical abilities. Half of all trips made by Americans are under three miles – a distance ebikes can easily conquer. Suddenly, cycling isn’t just a fitness activity or something done for fun by small children – it is a method to run errands and get to work in car-centric America.
“They break down barriers that people worry about – around distance, about physical ability, about being too hot and sweaty when you arrive somewhere,” MacArthur said. “You have batteries with a 40-mile range on them and so you can consider them in a more utilitarian way, outside recreation. Ebikes are changing how people view cycling.”
When Bryn Grunwald, a transport analyst at the environment group RMI, got her first ebike six years ago she initially felt it “sounded silly” but had a revelatory moment when she used it to get to college, via a steep hill. “The first time I biked up that hill, it was a life-changing experience – I wasn’t sweaty, I wasn’t out of breath and red in the face, I was invigorated,” said Grunwald, who is based in Colorado. “I’ve been evangelical about them over since.”
Grunwald said her own ebike use has lessened her dependence upon her car and saved her money in running and maintenance costs, which are comparatively tiny for an ebike. Her enthusiasm appears to be shared by others in Denver – when the city offered a new rebate scheme last year the website for applications promptly crashed from the number of people visiting it.
“I think something has shifted in the US,” Grunwald said. “Not everyone wants to bike but not everyone wants to drive and it makes life better for everyone to have one less person sitting in car traffic. I use the ebike to get groceries, to get a library book, to go to work. When that pedal assist kicks in, it feels very fun and freeing.”
A woman riders an ebike on the Strand in Hermosa Beach, California.
Photograph: Mel Melcon/Los Angeles Times/Getty ImagesThere are caveats to the ebike success story. They remain expensive compared with regular bicycles – ranging from about $1,000 to $16,000 or more – and many Americans still fear riding around on streets that are typically dominated by hulking SUVs and lack separated bike lanes.
“We won’t see this go anywhere unless we see more biking infrastructure in cities,” MacArthur cautioned.
There are also safety concerns raised by those not on the ebikes. Some pedestrians and other cyclists are unnerved by ebikes whizzing past at faster speeds than a regular bicycle, while a spate of fires in New York emanating from the lithium-ion batteries the bikes use has highlighted the dangers posed by faulty or cheaply made batteries (regulations have recently been put in place in New York City to ensure that ebike batteries meet a certain safety standard).
Such concerns are reasonable, MacArthur said, but should be compared with the status quo offered by cars, which also catch on fire and are responsible for about 40,000 deaths a year in the US due to accidents. If ebikes are to replace car journeys, rather than just other bikes, the net benefits should be tangible.
“The majority of people killed while walking are killed by cars, that is the real issue,” MacArthur said. “The key thing is to have separated walking and biking areas to reduce conflicts. Ebikes won’t solve everything, they aren’t a panacea, but I think more cities will be leaning into them.”