Rolling Along: Why New Jersey Should Join Other States and Offer an E-Bike Incentive Program

Electric bicycles, along with programs intended to incentivize their adoption, are rolling out across the country and New Jersey can’t afford to be left behind in this transportation revolution. Transportation emissions, which account for more than a third of all total greenhouse gas emissions in the state, are a critical target for climate change mitigation, necessitating the use of every tool to help us drive less. E-bikes in particular have huge potential to increase transit equity, since they add a transportation option for those who can’t afford a car, choose not to have one, or are unable to drive. However, even e-bikes can be prohibitively expensive, which is why incentive programs are particularly important for supporting low-income individuals with their purchase and ultimately reducing how much we drive. New Jersey’s density is an asset in encouraging bicycle and e-bike mobility and infrastructure and all the more reason to implement a statewide program encouraging more e-bikes on our streets. This analysis examines successful e-bike incentive programs at the state, county, and local levels across the nation to better inform a comprehensive and successful incentive program in New Jersey.

The Benefits of E-bikes for Quality of Life

As the state looks to reduce emissions and transition to sources of clean energy, it is crucial to find alternatives to driving gas-powered vehicles, which presently accounts for a significant amount of fossil fuel consumption in New Jersey. While moves to increase mass transit ridership; create more walkable, bikeable communities; and reduce vehicle miles traveled (VMT) have already emerged across the state, one new area to cut emissions and green our state is through the adoption of e-bikes.

E-bikes—or bicycles with electrical battery technology that can supplement and sometimes replace traditional pedaling power—are an up-and-coming form of transportation. As bike-sharing programs grow increasingly popular, e-bikes offer increased potential for equity in non-driving transportation options, making biking for transportation more accessible for all people, including aging adults, inexperienced bikers, people with physical limitations that make traditional biking difficult, and others of all shapes and sizes. E-bikes can also allow users to travel longer distances without fatigue and, in the case of cargo bikes, can allow users to transport items that are normally cumbersome, like groceries. This technology is more sustainable than driving cars, while also being more accessible and efficient than traditional biking or walking. The widespread adoption of e-bikes in New Jersey provides a cheaper, more sustainable option than driving that promotes a healthier environment and lifestyle for all New Jerseyans to enjoy.

The rechargeable batteries that power e-bikes make them less affordable than the traditional human-powered bicycle, presenting challenges in promoting widespread adoption across class lines and income levels. In New York City, an entry-level e-bike starts at $2,500, with spare batteries costing as much as $700 each. Nationwide, the median cost for a new e-bike is $1825, of which the gold standard $1200 rebate (in Denver, CO, see table below), covers just shy of two thirds of the cost, with less generous rebates covering between 20-50% of the total cost. While more affordable than the average new car, the costs of owning an e-bike remain inaccessible for many low-income families. Recently, US lawmakers reintroduced a bill called the Electric Bicycle Incentive Kickstart for the Environment (E-BIKE) Act, which would provide a tax credit for purchasing e-bikes that refunds up to $1,500. Many cities have also begun to explore e-bike bike-sharing programs, though the placement of such programs tends to be in wealthier, predominantly white neighborhoods, and in areas where affluent tourists visit. Some forward-thinking communities have even created e-bike libraries, which offer free access to borrow e-bikes for community members. It is crucial to critically evaluate where e-bike bike-share stations are introduced, ensuring that income, race, and geographic background are not limiting factors that exclude underprivileged community members from using them. Especially with federal and state support, as well as bike-sharing programs, the affordability and accessibility of e-bikes offers an opportunity to engage in active, sustainable, accessible transportation and to reduce our VMT.

The heightened range and ease of access associated with e-bikes compared with regular bikes provides the opportunity to use e-bikes for many essential trips. However, at present, the urban sprawl seen in many cities across the United States—in which communities rapidly expand with areas of low-density housing and low connectivity—causes bike infrastructure, such as protected lanes and separated paths, to play a significant role in the feasibility of the adoption of e-bikes. Notably, e-bikes have a long battery life, lasting between 22 and 50 miles per charge, and batteries lasting up to five years, providing great opportunities for increasing mobility within communities. E-bikes are particularly effective within condensed neighborhoods and mixed-use areas with existing bicycle infrastructure. While e-bikes are better suited to travel longer distances and to go up hills with less effort than a regular bicycle, safety is a major concern in areas without existing bicycle infrastructure, whether bike lanes, car-free streets, or other bike-friendly street design. Thus, compact and bike-friendly neighborhoods are essential to keep those utilizing e-bikes safe from cars. 

E-bikes have the potential to be used to meet a variety of needs, ranging from quick trips to the grocery store to supporting the transportation demand of tourism to connecting low-income community members to a wider range of jobs. There are some limiting factors for e-bikes as a primary mode of transportation, including snowy, wet, or cold weather conditions, as well as dangers of riding at night, but the efficiency and accessibility of e-bikes promotes them as a promising option for shorter day trips in good weather. At the same time, e-bikes provide enhanced opportunities for running errands when compared to traditional bikes. Many producers of e-bikes have begun creating cargo e-bikes, designed to support heavier weight and to carry groceries, luggage, or other cargo from place to place. Requiring less effort than a regular bicycle, e-bikes offer users the ability to bike to work, church, a date, or other activities without showing up sweaty and tired. E-bikes can also connect low-income communities to areas of higher opportunity, especially for those otherwise without access to reliable transportation. Ultimately, e-bikes hold a world of possibilities for reliable, safe, sustainable transportation to help us drive less.

What Other Jurisdictions Have Done So Far

Over the past year, incentive programs for e-bike purchases at various levels of government have quickly gained steam. The most popular program, and one of the most generous, was started in Denver, Colorado in April 2022 and its success has inspired a growing list of potential state-wide and other city-wide programs. However, this program is also the only well-established one that has existed for enough time to properly measure its success. Other new or proposed programs, such as Vermont’s as the first statewide one, also present promise and insights into the shape of a similar program in New Jersey. The table below shows the status and type of some of these programs, most of which are still in proposed legislation, working their ways through state legislatures. Vermont initiated the first statewide program in July 2022, California is rolling theirs out this year, and now at least seven other states are considering implementation. As mentioned previously, there is also a federal tax credit bill that has recently been reintroduced and may have more support than before.

 

Jurisdiction	Status	Initiated	Type	Base Incentive	Income Considerations
Denver, CO	Active	Apr 2022	Rebate	$300 for e-bike; $500 for cargo e-bike	$1,200 total for e-bike or $1,400 total for cargo e-bike for low-income tier
Vermont	Funds exhausted	July 2022	Point of sale or rebate	Up to $250 or $400 depending on income	Up to $250 or $400 depending on income
Hawaii	Active	Feb 2023	Rebate	Lesser of $500 or 20% of retail price	Must: participate in a low-income assistance program, or not own a car, or be a student
California	Coming soon	TBA 2023	Point of sale	$1,000 for e-bike; up to $1,750 for a cargo or adaptive e-bike	Up to $250 more for low-income tier
Illinois	HB 3447	-	Point of sale	$250-$750 depending on e-bike type	$1,000-$2,000 total for low-income tier
Colorado	Governor budget proposal	-	Rebate	$500 for e-bike	$1,000 total for low-income tier
New York	S314 (passed Senate)	-	Rebate	50% of cost, up to $1,100	None
Oregon	HB 2571	-	Rebate	$400 for e-bike	$1,200 total for low-income tier
Maine	LD 256	-	Rebate	TBD by Efficiency Maine if passed	TBD by Efficiency Maine if passed
Washington, D.C.	B25-32	-	Rebate	$400 or 30% of cost for e-bike; $500 for cargo e-bikes	$1200 total for e-bike or $500 additional for cargo e-bike for low-income tier
Federal	E-BIKE Act	-	Tax credit	30% of cost, up to $1,500	Income caps
New Jersey	A630	-	Tax credit	30% of cost, up to $1,500	None

 

Denver’s program has been the nationwide model and has plenty of positive results to show for its first year of implementation. In April 2022, the city initiated the program that offered residents $400 off a new electric bike or $900 off an e-cargo bike, with low-income residents eligible for an additional $800 discount. It was quickly oversubscribed within a few days (more than 4,700 residents received a voucher), causing the city to pause the application process. The value of the rebates decreased in 2023, but the latest round of 860 vouchers distributed in January ran out in 20 minutes.

Denver, CO estimates that e-bikes are replacing 100,000 vehicle miles each week, saving 0.94 pounds of CO2 per dollar spent, and preventing 2,040 megatons of CO2 from being released per year.

The City of Denver distributed a survey to rebate recipients in the fall to assess the program’s impact and found that the average respondent used their new e-bike instead of a car 3.4 times per week, and nearly 30% of respondents claimed they had not previously biked at all. The resulting study estimates that the bikes are replacing 100,000 vehicle miles each week, saving 0.94 pounds of CO2 per dollar spent, and preventing 2,040 megatons of CO2 from being released per year. The city’s recommendations for other jurisdictions trying to build a similar program include: making the incentive applicable at the time of purchase; leading early and genuine outreach in lower income neighborhoods; making a plan for how to collect data from individuals once they have purchased the e-bike; and thinking holistically about inducing demand for biking in the region by prioritizing investment in safe infrastructure.

Why It Makes Sense to Replicate in New Jersey

New Jersey currently has a proposed bill for an e-bike tax credit program that has no income considerations. To make this e-bike program more equitable, it should provide either a point-of-sale voucher, or rebate, since low-income residents might not be able to make such a large purchase and wait for a refund weeks or months later. It should also include either income caps or higher rebates for those in a lower income tier. As mentioned before, e-bikes could provide a significant advantage for lower-income families particularly because of the relative unaffordability of cars, especially more costly electric vehicles. These adjustments will be necessary to ensure equitable outcomes for New Jersey’s communities.

Given New Jersey’s development history, and specifically its large number of places that were founded before the age of the automobile, a statewide e-bike incentive program makes a lot of sense. Many places in New Jersey were built in an era when most trips took place by non-motorized means and where destinations were built close together to facilitate easy travel among them. There are many cities, towns, and older suburbs that have inherited “good bones” – high building densities that keep destinations close together, connected by local street networks with short blocks and narrow lanes that keep vehicular speeds low – that lend themselves to safe and easy bicycle and e-bike use and that have made Denver’s program a success.

New Jersey Future has developed three metrics of compact, walkable urbanism – net activity density (population plus employment per developed square mile), presence of a mixed-use center, and street network connectivity (as measured by median block size) – and there are 119 municipalities in the state that score well on all three of them, and another 107 that score well on at least two. These range from the state’s big urban centers like Newark, Jersey City, Paterson, Trenton, and Camden to smaller cities like Garfield, Rahway, Asbury Park, and Phillipsburg to “streetcar suburbs” like Maplewood, Ridgefield Park, Metuchen, Somerville, and Collingswood. Most of these possess the same kind of development patterns and fine-grained street grids as Denver, and would likely result in similarly high rates of ease and comfort with e-bike use.

Given the high rate of program participation among lower-income households in Denver, where nearly half of all rebates went to income-qualified residents, we recommend that a New Jersey program be scaled by income, with the size of the benefit increasing as household income decreases. For lower-income households, the cost of owning and operating a car or truck can be a major obstacle, a gap that an income-targeted e-bike program could be well positioned to fill. There are 108 municipalities in New Jersey with a rate of households not owning a vehicle that is at least as high as Denver’s rate of 9.6% (as of the 2020 American Community Survey). Together these 108 account for more than one-third (35.1%) of the total statewide population. In most of them, the relative lack of vehicle ownership appears to be for financial reasons: All but 17 of them have median household incomes that are less than the statewide median of $85,245, and more than half of them (60 municipalities) have median household incomes that are less than 80% of the state median.

A smaller benefit should still be available to middle- and higher-income households since an e-bike incentive could persuade some of these households to give up one or more vehicles and replace them with e-bikes, creating clear benefits in terms of reduced traffic congestion and greenhouse gas emissions. The willingness to go car-free (owning zero vehicles, and instead relying on public transit, rideshare, or rental options) or car-light (owning only one vehicle in a household) for reasons not related to monetary distress is apparent by the approximately 565,000 households owning at most one vehicle in municipalities with median household incomes that are higher than the statewide median. The potential for more such reductions in vehicle ownership, if offered an e-bike incentive, may exist, for example, among the approximately 490,000 households that own two or more vehicles in the municipalities that score well on all three of New Jersey Future’s smart-growth metrics – places like Cranford, Union, and Metuchen, for example, where more than 60% of households own two or more vehicles despite living in compact, walkable towns with easy access to public transit. 

In cities, towns, and older suburbs that are big enough to have retail downtowns, cargo e-bikes could be used for package deliveries and inter-business courier services, taking advantage of these places’ bike-friendly street grids. In cities that are big enough to have taxi service, e-rickshaws (which “are simply easier and cheaper to electrify than cars“) could serve the same function for shorter trips that can be accomplished without leaving the lower-speed local street network. New Jersey should consider the commercial and light-industrial usages of e-bikes in developing its incentive program.

The state should set up a mechanism for measuring actual use of e-bikes by households and businesses that take advantage of the e-bike incentive, whether it be surveys of purchasers about their travel habits, electronic devices that tally how many miles the e-bike travels, or some other method of reportage. The post-purchase phase of the program should monitor income levels and the rates of car ownership of households that purchase e-bikes, to see if households with lower incomes and/or lower rates of vehicle ownership do in fact end up being disproportionately represented among users of the e-bike incentive. Such feedback is important both for fine-tuning the targeting of future incentives, and for demonstrating the larger potential for e-bikes to substitute certain types of trips that would otherwise be taken by motorized, carbon-emitting vehicles.

New Jersey’s current proposal for an e-bike tax rebate program (A630), while a step in the right direction, should be amended to be even more accessible for low-income New Jerseyans. It should mirror Denver’s program, providing rebates for both e-bikes ($500) and cargo e-bikes (up to $900), ideally at the point of sale. It should also include more generous rebates ($1,200 total for an e-bike and $1,400 total for cargo e-bike) for income-qualified recipients who are below 60% of the state of New Jersey’s median income, or below 200% of the relevant federal poverty level, or below 80% of area median income. Given the urgency of the climate crisis and the impetus to enhance transportation equity, the state should join the efforts quickly gaining speed around the country to promote e-bike adoption, providing communities with an affordable and environmentally friendly option they can use to roll along wherever they need to go.