EV Tax Credit: Ditch Your Car?

Would you abandon your car if given a Federal tax credit to buy an E-Bike?  Despite the 2021 tax deadline being pushed back to May 17, thousands of Americans are still scampering to organize their paperwork to enjoy hefty tax refunds under the new tax code.  But would you give up your car for a large EV tax credit?

The Age of Electrifying

The current US administration has big plans for electric vehicles. Despite his love for his 1967 Corvette, President Biden plans to spend up to $174 billion to get Americans behind the wheels of electric cars. He also plans to make electric vehicles more affordable by offering rebates, tax credits, and other incentives. The President also hopes to have a million charging stations scattered across the country by 2030. Other government officials are following suit. Congressmen Jimmy Panetta and Earl Blumenaurer of California and Oregon were inspired to propose the Electrical Bicycle Incentive Kickstart for the Environment (E-BIKE) Act. They want to drastically reduce carbon emissions by getting more cars off the streets. The Act promises to provide tax credits to individuals seeking to purchase a new e-bike. In fact, consumers would get up to 30% of their total e-bike purchase back come tax season. However, the limit caps off at $1,500.

While a tax credit sounds tempting, does the purchase of an electric car or e-bike make a significant environmental impact?  And exactly how many people are actually buying e-bikes? Would riding an e-bike save the planet? According to a recent study published by the National Institute for Transportation and Communities, 45% of trips taken by e-bike riders in the US are done instead of driving a car. An additional study claims that the 15% of Americans riding e-bikes in lieu of cars could cut our carbon footprint by as much as 12%. This is huge.

Would You Take the Tax Credit?

The E-BIKE Act has a good chance of passing, but will it encourage more consumers to go electric? While Europeans have been encouraged to buy e-vehicles thanks to new legislations, and government subsidies for EVs, would America do the same?  Not surprisingly, an overwhelming percentage of Americans prefer gasoline vehicles. Right now, EVs make up less than 2% of new-vehicle sales in the US. While numerous automakers are embracing electric vehicles as their future, promising to end production of gas-fueled cars and trucks by the 2030s, consumers are still dragging their feet. They have lots of reasons: the high price of EVs, the lack of charging stations in many areas, the limits on range and charging times.  For most Americans, the timing just isn’t right for the purchase of an EV, yet.

EV sales have taken off in Europe, and eBike sales are enormous in China, because gas-powered small vehicles are already illegal in most Chinese cities.  To walk on the streets of Shanghai is to experience the future of the West, as most light vehicles zipping through the city are already electric, even shaggy 3-wheel lumber haulers that in previous centuries were horse-drawn, then powered by smoky two-stroke engines in the 20th Century.  Today Shanghai’s streets are relatively quiet, and the air is free of exhaust smoke, which compares extremely favorably to a walk through Paris in the summer, where every stoplight becomes a drag race for dozens of small two-stroke scooters, that fill the air with a noxious, eye-watering cloud.

Will the EV experience ever gain traction in the USA?  Without legislation encouraging (or requiring) EVs, it will take a very long time before Americans embrace battery power en masse. The Vintagent’s own Paul d’Orléans notes, “I’ve been asked by every eBike maker – ‘what will move the needle on sales?’, and my answer is the same: only legislation will create mass adoption, for better and worse.”   With the proposed E-BIKE Act tax incentives, more people will surely be inclined to give electric vehicles a go, but at what scale we can only wait and see.

[Feature image: Wisconsin State Journal, Amber Arnold ]