Governments Aim to Reduce the Big Barrier to E-Bike Adoption: The Price

Following the popularity of programs offered in places like Denver, many states and cities are exploring or rolling out financial incentives for residents to buy e-bikes.

Dozens of proposals are already in the works.

States including California, Colorado, Connecticut and Hawaii are rolling out incentives this year.

College towns including Austin, Texas; Ann Arbor, Michigan; and Columbus, Ohio are among the first cities to help customers buy e-bikes.

Officials in places such as Atlanta, Nashville, and Washington, D.C., could soon follow suit.

“2023 is going to be the year of the e-bike,” said John MacArthur, who researches sustainable transportation for the Transportation Research and Education Center at Portland State University. “The success of the Denver program has galvanized legislators to say, ‘Oh, we should be doing that since it’s really so successful. Let’s just copy their program and do it.’”

City officials are especially excited about promoting electronic bikes because they are even better than acoustic bikes—non-electric bicycles—in replacing car trips. The battery power helps increase the distance cyclists can go, the amount of cargo they can haul and the types of terrain they can handle.

“It makes it easier to bike, so people use them more,” said Ken McLeod, the policy director for the League of American Bicyclists. “That means it can be more likely to reduce car trips with cargo bikes … That trip to the store that would otherwise be done by a car is now easier to do with a bicycle for many people.”

Reducing car trips could help cities meet their goals of reducing greenhouse gas pollution and improving the safety of their streets.

“That ability to do more trips and replace cars more—which is borne out in research—makes it more appealing to localities and states to incentivize e-bike purchases,” McLeod said.

Subsidies can help potential customers opt for an e-bike, too, because one of the main barriers for wider adoption of e-bikes has been cost. Many new pedal-powered bikes cost less than $1,000, but few electric-assist models are that cheap. New leisure and commuter e-bikes average around $2,400, according to MacArthur’s research, and electric cargo bikes are even more pricey, at about $4,500.

But the U.S public’s interest in e-bikes has been climbing for years. Several bikesharing providers introduced them before the pandemic, and sales skyrocketed as Americans spent more time at home in 2020. Customers often had to wait months before they could get their hands on new bikes. Last year, Americans bought more e-bikes than electric vehicles.

Meanwhile, most state governments have adopted new laws that treat electric-assist bicycles more like traditional bikes instead of mopeds and motorcycles. That makes it clear that e-bikes can be used in bike lanes and on bike paths where gas-powered vehicles are not.

The cycling industry has promoted a three-tier classification system for e-bikes. The lowest tier is for bikes that don’t exceed 20 mph and don’t have a throttle (which lets riders move forward without pedaling). The middle tier includes cycles with a throttle. And the third tier has maximum speeds of 28 mph.

Inspiration from Denver 

While cities and states have tried out various incentive programs over the years, an ambitious program in Denver last year captured the attention of advocates around the country.

All residents there could claim $300 to help them buy an e-bike, or $500 if it was a cargo bike. For lower-income residents, the benefits were more generous: a $1,200 rebate for standard e-bikes and $1,400 for cargo versions.

The city handed out rebates for 4,734 e-bike purchases last year. Nearly half of them went to lower-income residents.

Denver officials say the financial incentives have already had a big impact. Respondents said they rode their new e-bikes for 26 miles every week, with 22 of those miles for trips they would have otherwise driven in their cars. Based on that response, the city says e-bikes are reducing 100,000 miles of car trips every week.

They noted that lower-income customers used the e-bikes even more often, at 32 miles a week on average.

Denver is continuing the program again this year, although it has reduced the amount of the rebates, it said, to reflect the declining price of e-bikes.

“This program showed there was a desire in our community for new, sustainable mobility options, and I’m excited to see the e-bike rebate program expand and continue to evolve our residents’ transportation habits,” said Denver Mayor Michael B. Hancock in a statement.

California Launches Statewide Effort

California lawmakers approved a pilot program for e-bike incentives as part of the state budget two years ago, before Denver launched its initiative, but the resulting voucher program will launch this year.

The California Air Resources Board, a powerful agency that handles air pollution issues, will be distributing $10 million in vouchers to help middle- and lower-income residents buy e-bikes. Qualifying residents are expected to get $1,000 vouchers, with more for cargo bike purchases or for people with lower incomes. Advocates say the pilot program could help 4,000 to 10,000 residents.

Demand for the vouchers will likely be high, said Laura McCamy, a spokesperson for the California Bicycle Coalition. An email list maintained by CalBike for updates on the program has 13,000 subscribers, she noted.

Two dozen California cities and power companies also already offer various kinds of incentives for people to use e-bikes.

Older residents, parents, and people with mobility restrictions are frequently attracted to e-bikes, because they are easier to use than traditional bicycles, McCamy said.

“A lot of people who aren’t bicyclists are getting an electrified bike. These are people who don’t bike, and this is their gateway,” she said.

Subsidizing e-bike purchases makes at least as much sense as giving financial incentives for people to buy electric vehicles, which California already does, McCamy argued. (Nearly a fifth of all vehicles sold in California last year were electric powered.) E-bike batteries are smaller, which reduces their carbon footprint while being accessible to a broader swath of people, she said.

This year, CalBike is pushing lawmakers to set aside $50 million for an expanded e-bike incentive program.

In the meantime, though, legislators have helped speed adoption of e-bikes by passing a law that prevents cities from banning e-bikes in certain areas, by creating an e-bike education effort and by allowing people who trade in a gas-powered car to get a voucher for an electric vehicle or an e-bike, McCamy noted.

She also said financial incentives are most effective for customers at the time of sale, even though it’s often easier for states to offer tax credits. Lower-income residents might not have the money to put up for a big purchase while waiting for a refund later.

MacArthur, the sustainable transportation researcher at Portland State, said another way to get people to use e-bikes is to make them more common in bikeshare services. “All bikeshare should be electric. There should be no bike share bikes that aren’t electric, no matter what,” he said. “They will expand the number of people using bike share and the number of places people are willing to go using bike share. They break down barriers. They get more people to join. And they get people to use the bikes more often.”

McLeod, from the League of American Bicyclists, said local governments can also encourage people to use e-bikes—not to mention traditional bikes, electric scooters and other new mobility devices—by building out robust networks of protected bike lanes and other bike infrastructure. Given the price of e-bikes, secure places to lock them up near stores, offices and other popular destinations.

McCamy agreed. “It’s much cheaper to give an e-bike subsidy than it is to build new infrastructure. It's expensive, but that’s what we really need to do,” she said.

“One of the nice things about the e-bike boom is that it’s building a constituency for bike lanes, which is fabulous,” she added. “The more people out there biking, the more demand there will be to create more protected, safe facilities. That’s what will really get people onto bikes and e-bikes.”