E-bike buyers would get a new tax credit under budget plan as lawmakers seek ways to curb climate change

After Paul Snodgrass got an electric cargo bike last year, he said it quickly became his vehicle for everything: getting to work, hauling his kids and even transporting a playhouse.

The Arlington, Virginia, family’s Subaru Outback mostly sits at home. Their Toyota Prius, which once logged 1,000 miles a month, now clocks about 300.

“It’s fun. It’s really fun,” said Snodgrass, 41, who competes with a friend to see who can get the most outlandish loads on their motor-assisted rides.

Cycling accounts for a tiny fraction of the billion or so daily journeys Americans make, but advocates and some lawmakers are hoping to get more people like Snodgrass onto two wheels. House Democrats looking to tackle climate change advanced a proposal in recent days as part of a sprawling $3.5 trillion package to offer billions in tax credits for e-bike purchases.

The $7.4 billion measure would be perhaps the most high-profile boost yet for the emerging technology in Washington, D.C., where the Biden administration and congressional Democrats have shifted transportation priorities to focus on the sector’s contribution to environmental damage. By combining the effort of a rider with a small electric motor, e-bikes provide power to travel at 15 mph without breaking a sweat, carry hundreds of pounds or cover long distances — jobs that might otherwise require a car.

“It’s absolutely thrilling,” said Noa Banayan, a lobbyist for PeopleForBikes, a trade group and advocacy organization. “Anything in the billions is really a lot bigger than what we’ve seen before.”

Transportation is the biggest emitter of greenhouse gases in the United States. Emissions peaked in 2006, before the financial crisis, according to the Environmental Protection Agency, but have steadily risen in recent years. House Democrats, who met in a cluster of committees this past week to advance the mammoth tax-and-spending proposals, are casting a broad net to reverse the trend.

They have strewn ideas to cut carbon emissions from transportation throughout the package. It would provide billions for transit; financial incentives for cities and states to curb emissions; subsidies for cleaner jet technology; grants for high-speed rail; and money to help people purchase electric cars, as well as install places to charge them.

Rep. Peter DeFazio, D-Ore., chairman of the Transportation and Infrastructure Committee, said this summer’s extreme weather showed why action is needed. He described being in Washington and seeing the sun rise into a sky made hazy by Western wildfires.

“America is burning,” he said.

DeFazio’s portion of the bill calls for $4 billion in carbon emission reduction grants. It also would require the federal government to set targets for transportation emissions reductions and reward states that make the most progress, while ensuring laggards face “consequences.”

It also proposes $10 billion in additional transit funding under a program run jointly by the federal transportation and housing departments. The program’s unusual structure was designed to get around a pledge by President Joe Biden that the bill — which Democrats would pass through a process called reconciliation without Republican support — wouldn’t add money to measures included in a $1 trillion infrastructure bill that has passed the Senate.

“There is not money here to build new highways,” said Yonah Freemark, a transportation researcher at the Urban Institute, a policy analysis organization. “There’s money to do a lot of other types of improvements that are much more about generating alternatives to highway transportation and creating opportunities for people to switch to much more sustainable transportation options.”

Republicans on the transportation committee said the proposed spending was wasteful and an attempt to do an end-run around infrastructure negotiations. Rep. Garret Graves, R-La., said the bill needed to bolster disaster relief, such as from hurricanes like those that batter his state.

“It’s an absolute slap in the face,” he said. “I haven’t heard anybody, anybody call and say ‘Hey, I want you to put $9 billion in transit on top of the $69 billion we put in it last year.”

The Biden administration is also betting heavily on electric cars, issuing an executive order calling for half of new vehicles to be zero-emission by 2030. The reconciliation package would support that goal with tax credits for electric car buyers, providing the biggest payouts to people who opt for those made by unionized workers at American manufacturers. It also includes billions of dollars to fund charging stations and other infrastructure.

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But the nation’s car fleet takes a decade or two to turn over, meaning that emissions gains from those sales are projected to kick in slowly. A recent forecast by RMI, an environmental advocacy organization, concluded that a 45% cut in emissions from transportation by 2030 — in line with Biden’s overall goal for the nation — would require 70 million electric cars on the road and for Americans to drive 20% less.

“We cannot expect American car buyers to drive our way out of the climate crisis — even if they are in electric cars,” Julia Thayne, principal of the urban transformation team at RMI, said in an email. “We need to ensure that transportation investments encourage and prioritize alternatives to driving.”

Their supporters say e-bikes could play a significant role in that transformation because about half of car trips are four miles or shorter, according to the National Household Travel Survey.

Cycling’s popularity boomed during the pandemic as people cooped up at home turned to bikes as a way to stretch their legs. Growth in sales of e-bikes outpaced that of standard bikes, with market research firm NPD Group estimating 274,000 were sold in 2020.

The new tax credit would be worth up to $750, and couples who file jointly could claim it twice if purchasing two bikes. The credit would be tied to income and start to phase out for couples who make more than $150,000 a year. Another provision in the bill would provide an $81 monthly tax benefit to cover costs associated with commuting by bike, similar to what many employers offer for transit or parking.

Karen Buhler’s family had been relying on a single car since moving to the Chicago area three years ago. Then she bought an e-bike in the spring. Buhler, 36, uses the bike to get around her suburban Chicago neighborhood, making the five-mile trip to Costco and playing Tetris to organize her groceries on board.