Guide to E-Bike Tax Credits and Rebates
You might already know about some of the great reasons to get an e-bike. They're a practical alternative to cars, they’re environmentally friendly, and e-bikes can give you a healthy workout. A lesser known reason to get an e-bicycle? Tax credits and rebates make them more affordable than ever.
Although the United States doesn't have a nationwide e-bike tax credit (yet — more on that below), some states have already implemented cost-saving measures.
Discover if you're one of the lucky Americans who can get an e-bike tax credit or rebate in your state below.
Are e-bikes eligible for tax credits?
The Inflation Reduction Act of 2022 paved the way for a greener future in America. But the part of the Act devoted to federal tax credits for e-bikes didn't pass.
The Electric Bicycle Incentive Kickstart for the Environment Act, or the E-BIKE Act, would have allowed U.S. taxpayers to obtain a refundable tax credit of up to 30% the cost of an eligible electric bicycle.
Qualifying vehicles were defined as two-wheeled bicycles with an electric motor power of less than 750 watts. Additionally, the electric bicycle's price tag, according to the act, couldn’t have exceeded $8,000, and the 30% tax credit was capped at a dollar amount of $1,500 per taxpayer.
This bill was part of the Inflation Reduction Act of 2022 (essentially a reworked version of the Build Back Better Act), which included legislation to invest in eco-friendly initiatives.
It provided funding for clean energy to reduce carbon emissions and combat climate change. The act expanded tax credits for electric cars and added tax credits for American households to offset energy costs.
This is good news for America’s future in sustainability. But the bad news is, e-bikes are still not eligible for tax credits in the U.S. as a whole.
What states offer e-bike tax credits or incentives?
Although there is no federal tax credit for electric bicycles, some states have initiatives to incentivize e-bike purchases. Here's a roundup of what some states offer as of October 2022 (check your state laws regularly, since legislation changes).
California’s E-Bike Affordability Program aims to help 10,000 Californians buy e-bikes with some $10 million in subsidies. The initiative aims to encourage people to replace car trips with e-bike trips.
The program is supported by the California Air Resources Board (CARB) and is set to launch in the first quarter of 2023. It will be available to people living anywhere in California. Qualifying residents will get a voucher to take up to $750 off an e-bike’s purchase cost or up to $1,500 for an adaptive e-bike or cargo e-bike.
California also has more localized incentives. For example, Los Angeles' Replace Your Ride initiative helps residents replace traditional cars with clean energy alternatives like e-bikes, covering as much as $9,500 of the cost.
Colorado's Air Quality Improvement Investments Bill offers funding to nonprofits, tribal governments, and local governments to establish programs for electric bike sharing or ownership.
The legislation has budgeted $12 million and includes e-bike rebates for low-income and mid-level income households. The electric bicycles grant and rebate program is currently set to run until September 1, 2028.
Like California, Colorado also has localized initiatives. For example, the city of Denver offers an e-bike rebate of up to $1,700 for e-bike purchases made through a participating bike shop in the city.
Connecticut's Clean Air Act gives state residents the chance to get a $500 rebate on electric bike purchases. The bike you choose can't cost more than $3,000. Plus, you have to fall under a certain income threshold to qualify.
Connecticut is also considering another piece of legislation to expand eligibility for e-bike tax credits. Depending on household income, it could approve tax credits of up to $1,000.
Hawaii has a statewide e-bike rebate program that gives students up to $500 off the cost of a new e-bike (or students might pay 20% of the original retail price). This applies to e-bikes and mopeds that can't go more than 28 mph.
To be eligible, you have to be enrolled in a university, college, or school. Additionally, you must qualify for certain low-income assistance programs, and you can't own a motor vehicle with four or more wheels.
The Eastern Iowa Light & Power Cooperative is a distribution electric utility serving multiple counties in eastern Iowa. The power company provides rebates for "residential outdoor battery-operated equipment" including electric bicycles. The rebate is available for 25% of the cost of up to $150 total.
To qualify, you have to have an account with the company. You also have to provide an itemized sales receipt. Note that you can't get rebates totaling more than $300 per year per member account.
The Massachusetts Transportation Bond Bill includes an e-bike rebate of up to $500 while citizens who qualify as low income can get a rebate of up to $750. The rebates are offered via designated local bicycle stores.
The initiative is expected to take effect in 2023. There are also discussions about making the bill effective retroactively. That means if you’ve already purchased an e-bike in Massachusetts and qualify, you could get money back.
New York doesn't have a statewide e-bike program yet, but they're working on it. If the Clean Ride program passes, the New York State Energy Research & Development Authority will offer rebates of up to 50% on e-bike purchases (capped at $1,100).
That said, there are already some local initiatives underway designed to promote e-bike accessibility. For example, the Equitable Commute Project helps New York City commuters in Brooklyn and the Bronx get e-bikes, subsidizing up to 50% of the purchase price.
Oklahoma is another state that doesn't have a broad e-bike rebate program in place yet — but it's another one to watch. Bill SB 435 proposes providing financial assistance in the form of a $200 tax credit towards new e-bike purchases. However, it's still a work in progress.
Oregon doesn't have a statewide incentive program for e-bikes, but there are a number of local opportunities. For example, residents of Ashland who are Ashland Electric customers can get a rebate of up to $300 on an e-bike or $600 on an electric cargo bike.
Meanwhile, Eugene, Oregon offers a $300 e-bike incentive. To qualify, you must be a residential Eugene Water & Electric Board (EWEB) customer. Only two rebates are allowed per EWEB customer account.
Unfortunately, Texas doesn't have a statewide e-bike tax credit or rebate program. But if you live in Austin, you have the chance to benefit from the city's local e-bike rebate program. Rebates are available for up to $300. To qualify, you must be a customer of Austin Energy, and you must purchase an eligible, new e-ride vehicle.
The Vermont state government is currently working on a bill that would offer statewide e-bike rebates of $200–$400 per person (the exact amount would depend on the individual's income). The bill is currently being reviewed by the state's Committee on Transportation.
For now, there are some localized e-bike promotions that can help cover e-bike costs. For example, if you're a customer of Washing Electric Coop Service, you may be eligible for a $200 rebate on an e-bike purchase.
If you live in certain cities like Burlington or Montpelier, you can try out an e-bike for free with e-bike "lending libraries." Other municipalities with lending libraries include Springfield, Brattleboro, and Upper Valley.
Washington is another state working on an e-bike rebate program. A proposed bill — currently being reviewed — would make e-bike purchases exempt from sales tax. Citizens would also benefit from tax-free purchases of up to $200 worth of e-bike accessories.
The state's Governor has also suggested other initiatives, such as a statewide rebate program for electric vehicles. It would offer up to $7,500 rebates for electric cars and up to $1,000 for electric bikes.
Nationwide e-bike tax incentives for the United States
As mentioned above, there is no nationwide e-bike tax incentive for the United States. Congressional negotiators from the House and Senate couldn't agree on the E-BIKE Act.
As a result, the E-BIKE Act ended up getting cut from the larger legislation, the Inflation Reduction Act (a revised version of President Joe Biden's Build Back Better Bill), which passed in August 2022.
This doesn't mean, however, that a national bill for e-bike tax credits or similar incentives will never pass. Some politicians, like Democrat Earl Blumenauer of Oregon, are still planning to push for the bill going forward.
As consumers become eco-conscious, odds are that there will be more opportunities for tax credits or rebates in the future. More states may follow the lead of those listed above, or the federal government may pass a bill.
Advocacy organizations like PeopleForBikes continue to champion politicians for more electric bike initiatives. You can learn more about their work to promote e-bike incentives and help cyclists here.
Discover the Velotric e-bike that’s best for you
Electric bicycles are becoming increasingly popular — thanks, in part, to the rebates and tax credits that make them more affordable. It’s worth noting, however, that even without special deals, electric bicycles are a cost-efficient way to get around.
With an e-bike, there’s no need to pay for gas. Plus, modern bikes are more affordable than they once were. Velotric's bicycles come in under $2,000, for example — and with these models, you get the bang for your buck.
The Velotric Discover 1 comes with a 500W power motor, a 48V 14.4Ah battery, a five-level pedal assist system, and walk mode. It also has Shimano 7-speed derailleur and hydraulic disc brakes to keep you safe.
The Velotric Nomad 1 has fatter tires which make it great for rougher terrain. It features a 48V 14.4Ah battery and throttle assist — plus a more powerful 750W motor and a five-level pedal assist system. The Nomad has a Shimano 8-speed derailleur and hydraulic disc brakes.
Velotric's bikes and batteries are certified by Underwriter's Laboratories with UL 2271, a global safety organization, so you can be confident you're getting a quality product. Read more about Velotric’s e-bikes now.
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