Biden’s Build Back Better bill may save you up to $900 when buying an e-bike. Here’s how the proposed tax credit works

- Advertisement -

  • The increasingly popular electric bicycles could grow even more so thanks to a provision in the Democrats’ $1.75 trillion Build Back Better bill.
  • The version passed by the House of Representatives offers some Americans a fully refundable, 30% tax credit on the purchase of certain e-bikes.
  • Advocates say e-bikes are vital to US efforts to fight climate change because they provide a low-carbon transportation solution.
  • “We wanted to put [e-bikes] And with electric vehicles or e-buses” as a way of reducing transportation emissions, said Rep. Jimmy Panetta, D-Cal..

- Advertisement -

electric bicycle is boom in popularity The tax credits in recent years, and Democrats’ $1.75 trillion Build Back Better Bill, could fuel their growth even further.

- Advertisement -

The version of the social safety net and climate bill passed by the House of Representatives offers some Americans a fully refundable, 30% tax credit on the purchase of certain e-bikes.

Individuals who earn $75,000 or less qualify for a maximum credit of up to $900. Joint filers earning up to $150,000 may qualify for two bikes and a $900 tax credit on each. It is phased out for taxpayers above those income levels. E-bikes with a sticker price of more than $4,000 are not eligible for the credit.

- Advertisement -

Congress has several champions in e-bike credit, including Rep. Jimmy Panetta, D-California., who in the first year Uniform, standalone law introduced To encourage e-bike purchase. Because e-bikes are a low-carbon transportation option that Can replace some car tripsPanetta and other advocates, especially the less-for-profit, say they are vital to US efforts to fight climate change.

“We wanted to put [e-bikes] Same with electric vehicles or e-buses, and basically show that’s one way we can reduce our carbon production in the transportation sector,” Panetta told CNBC in an interview.

CNBC Politics

Read more about CNBC’s politics coverage:

  • Trump SPAC under scrutiny by federal regulators, including SEC
  • Biden ready to warn Putin against possible Russian invasion of Ukraine
  • US diplomats will boycott next year’s Beijing Winter Olympics

Transportation accounted for 29% of US greenhouse emissions in 2019, According to the Environmental Protection Agency, This is the largest of any sector, with electricity generation and industrial activity in second and third places respectively at 25% and 23%.

Panetta said Democrats want the Infrastructure Investment and Jobs Act, which is already in law, and the Build Back Better Act, which will fund Democrats’ social and spending priorities, to help accelerate the transition to more sustainable transportation modes. Can you He said the e-bike tax credit “is an important link in the chain of those efforts to do so.”

What is an e-bike?

Electric bicycles often look similar to conventional bikes. The main difference – as their name suggests – is that they have a battery-operated electric motor to propel the bike, in addition to the occasional users’ own pedaling.

In the 12 months between July 2020 and July 2021, e-bike sales jumped 240% compared to the same period two years ago, According to market research firm NPD Group,

  • Some e-bikes, known as Class 1, have motors that run only when the rider is pedaling; When the bike reaches 20 mph the motor stops providing a boost.
  • The motor on a Class 2 e-bike can be used when the rider is not pedaling. But like a Class 1 e-bike, the motor doesn’t operate above 20 mph.
  • A third variety, called the Class 3, also requires the user to pedal, but its motor can assist up to 28 mph before it stops providing assistance.
  • All three classes of e-bikes are eligible for tax credit, provided they meet the criteria mentioned earlier.

“The magic of the e-bike is that it really takes away the more painful edges of cycling,” said Chris Cherry, a civil and environmental engineering professor at the University of Tennessee who conducts research on sustainable transportation. He is currently working on a study that examines the impact of e-bike incentives at the municipal level.

“You can take traffic easy. You can meet all your travel needs without being in a vigorous physical activity environment,” Cheri told CNBC in an interview. The result, he said, is that e-bikes are attractive to a wider group of people, such as those who can’t sweat while riding a traditional bike to work. They also make it easier to complete tasks like going to the grocery store or getting kids from daycare to bikes, he said.

encourage adoption

Cheri said e-bikes do not remove all the obstacles to cycling, including the safety risks associated with riding on roads with poor bike infrastructure. But e-bikes “outperform some of them,” he said. “When those barriers are removed, people begin to look to meeting the greater demands of their travels on e-bikes rather than more carbon-intensive options such as a gas-powered car”.

This change is important for maximizing the potential climate benefits of e-bike adoption, Cherry said, acknowledging that there are Additional benefits of riding an electric bicycleincluding personal health.

“If you really care about emissions and that’s why you’re buying a bicycle – and I think that’s the main essence of an e-bike [tax credit] In Build Back Better Bills – you have to do it in a way that replaces the car trip,” said the professor.

E-bikes tend to be more expensive than comparable-style traditional bikes, but that’s where proponents hope incentives can make a difference. Panetta and other advocates, such as Rep. Earl Blumenauer, D-Orre., hopes that having an income-capped federal tax credit eases a potential barrier to adoption.

“Some people just need a little bit of encouragement to make the transition to riding a bicycle, and the fact that e-bikes are so convenient and easy and fun makes people do it,” said Blumenauer, who is co-chairman. Congressional Bike Caucus, “These people who make less than $150,000 per household are precisely the people to whom the economic benefits are most important.”

Build Back Better Act after it is passed by the House, Now being considered by the Senate, where Democrats have a very small majority. It is unclear whether the e-bike tax credit will make it to a possible final version. Republican opponents of the comprehensive legislation have criticized its price tag and many of its various spending initiatives, including the e-bike tax credit.

“The government should not use taxpayer money to subsidize the electric vehicle industry, be it for cars or bikes,” Rep. mike kelly, R-Pa., said in an emailed statement to CNBC. Kelly, member of Tax-Writing Ways and Means Committee, is the co-chairman of House Automotive Caucus, he is long standing protest EV tax credit.

“Right now, it will only benefit the wealthy. This provision comes at a time when e-bikes, in particular, are struggling to gain popularity among the majority of Americans,” Kelly continued. “E-bikes are significantly more expensive than traditional bikes, and I cannot ask the hardworking taxpayers in my district to provide tax credits for these products at a time when inflation and everyday costs are rising.”

industry influence

mike radenbaugh, the founder and CEO of Seattle-based Red Power Bikes, told CNBC that he believes a federal tax credit could have a “big impact on our business,” which, he said, is already experiencing significant growth. Has been doing. Rad has more than 350,000 customers since launching as a direct-to-consumer business in 2015 and expects to add more than 100,000 riders in the second half of 2021 alone, he added.

Even if the e-bike tax credit doesn’t become law, Radenbaugh said the mere fact that it is included in the House bill validates e-bikes as “a true form of transportation.”

“Two-thirds of our customers use their e-bikes to convert miles they would otherwise be doing in their cars,” Radenbaugh said.

“Our customers are primarily using their bikes for mobility, utility, taking their families to schools and dropping them off at daycare, carrying cargo and doing food delivery and other commercial applications. are,” Radenbaugh said. “This tax credit is the first time at the federal level where it is being recognized, that e-bikes are not purely entertainment. They are primarily transportation.”


- Advertisement -

Stay on top - Get the daily news in your inbox

DMCA / Correction Notice

Recent Articles

Related Stories

Stay on top - Get the daily news in your inbox