The Inflation Reduction Act of 2022 is a major piece of legislation that would invest a staggering $369 billion in clean energy and other tools to fight climate change, including billions of dollars in expanded electric car tax credits.
These are cars – not vehicles – because the bill’s authors short-sightedly decided to eliminate funding for the one type of vehicle that has the greatest potential to fight climate change, reduce car emissions, and make our cities and streets safer and more livable: e-bikes.
A $900 refundable tax credit for buying a new electric bike has been left on the cutting room floor by congressional negotiators, to the dismay of bike advocates who have been pushing for it for years.
“It’s really, really tough,” Noa Banayan, director of federal affairs at PeopleForBikes, a cyclist advocacy group, said in an interview with The edge. “We are deeply disappointed in this great opportunity to be climate responsive and to advance progressive climate policies that can really make a difference.”
The pain is particularly acute given how close proponents have come to passing a true federal directive to boost e-bike sales. President Joe Biden’s original Build Back Better proposal included a refundable tax credit worth 30 percent of the purchase price of a new e-bike, capped at $1,500. But Senator Joe Manchin (D-WV) had the final say at the end of the day, and the e-bike tax credit was scrapped.
The disappointment was palpable among urbanists and advocates of bicycles. David Zipper, a visiting fellow at the Harvard Kennedy School’s Taubman Center for State and Local Government, who focuses on urban development, called it a “crazy omission.” slate. The Washington Post declared it a “blind spot” for the bill. and To go biking The magazine said the elimination of the e-bike tax credit was a “shame”.
But the e-bike credit can live again. According to congressional sources, supporting lawmakers are already working on a Plan B and are exploring other ways to pass legislation that could accelerate e-bike sales — maybe even before the end of the year.
A source close to the negotiations conceded that the chances of including an e-bike balance change in the inflation-mitigating law before it reaches Biden’s desk are “slim to none.” But there will be other tax bills coming to a vote before the end of the year, most notably a law to delay amortization of research and development expenses.
“This is a tax provision,” the Democratic source said. “If many members push to include this provision later this year, that will likely open the door for us to include other tax measures like the e-bike credit or the bicycle commuter law.”
Rep. Earl Blumenauer (D-OR), founder and co-chair of the Congressional Bike Caucus and co-sponsor of the Electric Bicycle Incentive Kickstart for the Environment (E-BIKE) Act, vowed to keep pushing the bill.
“Electric bikes are one of the most effective ways to shift people from cars to bikes and make zero-carbon commuting even easier,” Blumenauer said in a statement. “While it’s disappointing that my bills to offer discounts on electric bikes and make commuting by bike easier weren’t included in the Inflation Mitigation Act, it’s important that Congress doesn’t give up on breaking our reliance on fossil fuels. This package is the largest single investment to combat the climate crisis in our country’s history. As we work to get this law passed quickly, I will continue to work to make it cheaper and easier for people to buy electric bikes.”
The failure to include funds to switch people from cars to e-bikes in a bill rumored to be about tackling climate change is symptomatic of the car-leaning American mindset. To combat climate change, cities need to be designed to be much more popular for walking, cycling and using public transport. This requires a multi-pronged approach that includes infrastructure improvements to build a network of protected bike lanes, more frequent train and bus services to encourage public transport use, and — yes — tax credits and other incentives to drive more people to electric bikes.
E-bikes are by far the best tool we have to replace car trips, especially those trips five miles or less that make up the vast majority of driving in the US. Electric vehicles are an important step towards decarbonizing transportation, but experts say reducing trips overall will have a more measurable impact if we are to slow the planet’s warming.
E-bikes are more expensive than regular bikes, typically ranging from $1,000 to $8,000 for some of the higher-end models. But they also have the potential to replace car journeys for many people. A recent study found that if 15 percent of car journeys were made by e-bike, CO2 emissions would drop by 12 percent. Nearly 50 percent of e-bike commutes replaced car commutes, according to a recent North American survey, and a more thorough review of European studies showed that e-bike trips replaced car trips 47 to 76 percent of the time.
And yet Senate Democrats have reportedly balked at the price tag — $4.1 billion according to the Joint Committee on Taxation — associated with subsidizing the cost of buying e-bikes. Bicycle commuting, which would provide cyclists with pre-tax commuting benefits similar to those who commute by car or public transit, produced even lower results at approximately $183 million over 10 years.
Cost will likely remain a sticking point, but Congressional Democrats could seek to include language in the bill that will encourage more domestic manufacturing — similar to how the electric vehicle tax credit was reworded to only apply to vehicles with a significant proportion of parts shall apply that were manufactured in the country USA or by commercial partners. Today, most e-bikes are manufactured overseas, mostly in China, and “onshoring the bike industry” could help garner more support, the congress source said.
Yonah Freemark, senior research fellow at the Urban Institute, called the Inflation Reduction Act a “major step forward for the climate at large” that nonetheless reinforces many of our worst habits and tendencies as a nation of drivers.
“The net effect of the bill’s approach is that it makes no effort to address the fact that electrifying the auto system is just one of many ways to reduce the climate impact of transportation,” Freemark said in an email. “Getting people out of their cars and walking, cycling or using public transport instead is a more effective – and cheaper – way to reduce greenhouse gas emissions than switching people from gas-powered cars to electric cars.