Proposed US tax credit for electric bikes back up to 30%, capped at $1,500 incentive

After being cut in half, a proposed US tax credit for new electric bicycle purchases has been bumped back up to a full 30%.

The move comes as electric bicycles sales continue to grow, making the alternative form of transportation an increasingly popular option as a car replacement.

That led several members of the US Congress to propose a tax credit earlier this year to help reduce the cost of e-bikes, which are several times more expensive than pedal bicycles.

Congress has been chewing away at the proposed legislation, with the House of Representatives recently cutting the incentive from 30% to 15%.

Now President Biden’s “Build Back Better” proposal has restored the proposed incentive back to its full 30%. It would be capped at a maximum incentive of $1,500, and would only apply to electric bicycles priced under $8,000 (which is the vast majority of all e-bikes).

A phase-out schedule is included based on income level. The credit would begin phasing out for taxpayers earning over $75,000, though that figure increases to $112,500 for heads of household and $150,000 for married couples who file jointly.

Electric bicycles help riders travel faster, farther, and for longer without as much exertion

There’s still a way to go before the e-bike tax credit could become law, but this is certainly promising news for those that have hoped to buy an e-bike as an alternative to car trips.

The proposed tax credit has been designed to help Americans that may not otherwise be able to afford the cost of an electric bicycle.

While several models of e-bikes can be found for under $1,000, most popular e-bikes cost several thousand dollars.

Even though e-bikes are expensive compared to pedal bicycles, many riders have discovered that they ultimately saved a significant amount of money by switching from a car to an electric bicycle. In one case, a woman in San Fransisco saved around $50,000 over several years by entirely switching from a car to an electric bicycle.

Most commuters who don’t live in a densely packed urban area will likely find it difficult to completely replace a car, but electric bicycles are still useful for many local trips that don’t require a full-size vehicle. And with electric cargo bikes that can carry several children or a week’s worth of groceries, more riders are discovering that a full-size vehicle might not be as necessary as they once thought.

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Avatar for Micah Toll Micah Toll

Micah Toll is a personal electric vehicle enthusiast, battery nerd, and author of the Amazon #1 bestselling books DIY Lithium Batteries, DIY Solar Power, The Ultimate DIY Ebike Guide and The Electric Bike Manifesto.

The e-bikes that make up Micah’s current daily drivers are the $999 Lectric XP 2.0, the $1,095 Ride1Up Roadster V2, the $1,199 Rad Power Bikes RadMission, and the $3,299 Priority Current. But it’s a pretty evolving list these days.

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