Electric Bikes: Benefits, Costs and Government Incentives (USA)
There are numerous benefits of owning an electric bike. Extreme performance, saving the environment, and of course, looking very attractive. However, what about the price? A common perception is that electric vehicles are expensive to run, which, in turn, makes some riders hesitant to switch from petrol-powered bikes to electric bikes.
But, the reality is not much more complicated than that. Electric bikes help you avoid the ongoing costs associated with running a petrol bike, such as petrol, regular repairs, bike consumables, etc. In addition, the number of government projects for electric vehicles – including electric motorcycles – is also growing rapidly.
With that in mind, we’ve put together a comprehensive guide to the electric motorcycle grants and incentives available in the US.
First, an update on the federal tax credit for electric motorcycles.
Federal Tax Credits for Electric Motorcycles: 2023 Latest Update
The INFLATION REDUCTION ACT of 2022 was signed into law on August 16, 2022. The law removes the now-expired federal electric motorcycle tax credit, which allowed riders to claim up to $7,500 in tax credits. The legislation which does not include electric bikes — is quite different from the Build Back Better Act, which was passed by the US House of Representatives in November 2021.
While it’s a blow to riders, it’s unlikely to be the last update to the federal electric motorcycle tax credit this year. In fact, Jacqueline Patterson, vice president of communications for the Motorcycle Industry Council, is exploring other options for the end of the year:
Jacqueline Patterson, Vice President of Communications, Motorcycle Industry Council, says MIC GRO continues to work with tax committees to consider other options, including possibly a tax extension bill later in the year. Also included.”
As soon as there is an update, we will update this blog. Watch this space!
KEY POINTS FROM THE 2022 INFLATION REDUCTION ACT
Here’s some additional information on how other zero-emission vehicle and electric vehicle manufacturers are affected by the new law:
- Sale Cap Expired – The previous sale cap of 200,000 has been replaced with an expiry purchase date of 31 December 2032.
- Sourcing of battery components is becoming more important – to qualify, a vehicle must source at least 50% of its battery components from the US or countries with which the US has free trade agreements by 2024. Then, it will begin to gradually increase to 10% by 2028.
- Used electric vehicles still qualify – Used electric vehicles are now eligible for a $4,000 federal tax credit with a value limit of $25,000. They must be at least two years old, and the used credit can only be availed once in the lifetime of the vehicle.
- In 2024, the credit can be applied at the point of sale – The tax credit can be applied at the point of sale instead of your taxes from 1 January 2024. This effectively makes it a rebate. However, before that date, it remains a tax credit.
Are there any electric bike incentives at the state level?
Electric motorcycle tax credits and incentives vary greatly by state.
And, although the federal tax credit has ended, several states are offering significant incentives for electric bike ownership.
Here’s a summary of the incentives available in our five safest states:
California electric bike incentives
The Clean Vehicle Rebate Project (CVRP) is available to anyone in California
CONCLUSION:
Owning an electric bike is a constant money saver for you
As you can see, buying an electric bike is becoming cheaper than ever.
States across the U.S. are constantly offering new incentives to convince residents to switch to cleaner vehicles. In addition, demand to renew the federal electric motorcycle tax credit is unlikely to end soon.
One thing’s for sure, the savings from an electric bike don’t end when you turn the key – they continue far into your electric vehicle ownership.
Electric bike insurance costs are starting to drop, and will continue to do so as electric bikes become safer. Plus, the batteries last longer, there are almost no repairs, and of course, there are no crazy maintenance costs involved!
It’s time to save the planet, look good, and save some money while doing it.