Among the many things our federal government does is provide subsidies for a variety of kinds of expenditures. Energy companies get them; farmers get them when crop prices fall; veterans get them to go to college after leaving the military. The transportation sector gets them as well and one of the ways the government has offered them has been in the form of tax credits: Buy an electric vehicle and get a certain amount of that purchase price back in the form of reduced taxes.
The idea is that the cash payment will provide an incentive to make a particular kind of purchase that is beneficial to society as a whole. Because a subsidy needs to reach as many people as possible, payments or tax credits to individuals can’t be all that large.
The Best Electric Bikes team is firmly on the side of advocating for e-bike subsidies. Let’s take a look at why.
Why Should There Be E-Bike Subsidies?
So why would our government subsidize the purchase of electric vehicles (EVs) or e-bikes? Their stated goal is to reduce the country’s collective carbon footprint. Both Democrat and Republican administrations have acknowledged a need to reduce the emission of greenhouse gasses. To that end, the federal government has made investments/provided subsidies for various efforts ranging from helping energy companies to retire old and inefficient coal-fired power plants to helping to build solar farms to help homeowners install solar panels on their homes.
They’ve also provided subsidies for the purchase of EVs and hybrids. One of the most recent ones gave individuals a tax credit of between $2500 and $7500, depending on the price of the vehicle purchased.
Currently, the least expensive EV on the market is the Chevrolet Bolt EV LT at $27,495. Were we to apply that previous subsidy to the Bolt, a buyer would get $2500 knocked off their taxes. Awesome, right? But here’s the thing: a $2500 subsidy reduces the cost of the Bolt by 9 percent. Now let’s ask the question: How often does a 9 percent discount make a difference in a buying decision?
Surveys of EV buyers have shown that the great majority of them would have made the purchase with or without the government subsidy. In starker terms: The Tesla buyer purchases one without the government’s help.
Making dollars count
Some Tesla buyers saw their tax bill reduced by $5000. What if, instead, we took that $5000 and spread that among five people, rather than one, and offered them each $1000 toward buying an e-bike?
Reducing the cost of an e-bike by $1000 has the ability to make that purchase painless in some cases—the Lectric XP 3.0 goes for $1000 (technically, $999). For some low-income families, that could give them an additional mode of transportation. Not a bad thing. Hard to argue with a 100 percent discount. And what about that family of four who decides to drop $3000 on a cargo e-bike? Even if the subsidy didn’t rise above $1000 based on the e-bike’s higher price, a one-third discount off of the purchase price has the power to make or break such a purchase, and that’s where the value of a subsidy really makes its impact seen.
Why offer subsidies at all?
Subsidies can be a political hot potato and we’re an apolitical site; everyone who is interested in e-bikes is welcome. That said, a smart subsidy can make an impact that benefits the whole of society. We know that internal combustion engines (ICEs) produce pollution that contribute to a variety of health issues, from cancer to asthma, not to mention the injuries and deaths caused each year from accidents alone. And even if someone isn’t convinced about climate change, we can all agree that dumping less C02 into the atmosphere is a good thing.
Every time one person goes for a ride on an e-bike the following benefits accrue:
- The rider sees health gains in the form of improved aerobic fitness and long-term weight loss. Good for keeping up with whippersnappers!
- The rider saves money in the form of their gas bill and reduced wear-and-tear on the vehicle. Less money was spent at the pump!
- Replacing a car with an e-bike reduces particulate pollution and greenhouse gas emissions. Smell those trees and flowers!
- Replacing a car with an e-bike reduces congestion on roads, shortening the drives for people in cars. Less time in cars!
- E-bikes reduce the wear-and-tear on roads, bridges and parking lots. Fewer potholes!
- Riding an e-bike has been shown to elevate mood in a way driving a car cannot. More smiles!
- Selling e-bikes creates new jobs in the bike industry. People form new companies; those companies hire engineers, product managers and salespeople, and bike shops hire mechanics and salespeople. (And sites like this one hire journalists, too!)
Making a dent where it counts
For people who want to make the greatest impact possible in reducing their negative impact on the environment—this includes carbon footprint as well as pollution—multiple studies have shown the greatest single change one person can make is to park their car and ride a bike—e- or otherwise.
Subsidies are meant to create a benefit that extends beyond the individual recipient and improves life for Americans as a whole. As of this writing members of Congress have just reintroduced the E-BIKE Act. Its sponsors are Jimmy Panetta (D-Calif.), Earl Blumenauer (D-Ore.), Mike Thompson (D-Calif.), and Adam Schiff (D-Calif.), and Sen. Brian Schatz (D-Hawaii).
The Electric Bicycle Incentive Kickstart for the Environment Act would provide a 30 percent tax credit on new e-bikes purchased, up to a maximum cost of $8000, with a maximum benefit of $1500. The benefit would also be capped at $150,000 for individuals, $225,000 for heads of households and up to $300,000 for joint filers.
The country’s largest advocacy organization for riders of both e-bikes and regular bikes, People for Bikes, is encouraging people interested in this subsidy to contact their senators and congressional representatives to voice their support. People for Bikes has created a form supporters can fill out that will send a message to their appropriate legislators.
Net good
The argument for an e-bike subsidy is pretty terrific. The buyer enjoys a reduced tax bill, better health and less money spent on gas and car maintenance, not to mention the enjoyment of being outside on an e-bike. Neighbors benefit from fewer cars on the road and in parking lots. Cities benefit from less overall pollution and reduced wear-and-tear to roads, bridges and parking lots. And the federal government reaps the benefit of having spread a relatively modest spend over a sizable population, which helps them reduce stated goals like reducing the country’s overall carbon footprint.
It’s a win, win, win, win.
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