Navigant Research Blog

Renewed U.S. Tax Credit Gives E-Motorcycle Market a Boost

— December 29, 2015

An important federal tax credit for electric motorcycles (e-motorcycles) expired at the end of 2013, but has just been reinstated as part of the enormous $1.1 trillion spending package approved by Congress in December 2015. The federal tax credit will offset 10% of the purchase price for qualifying plug-in two- and three-wheel vehicles (must have a top speed of at least 45 mph and a 4 kWh battery or larger). The maximum credit available to consumers will be $2,500 and the credit will apply retroactively to all e-motorcycle purchases since January 1, 2015.

This effort, reportedly spearheaded by California-based manufacturer Zero Motorcycles and non-profit Plug In America, will likely serve as a sales boost for the e-motorcycle industry in the United States. However, e-scooters and e-bikes do not receive the same tax advantages since these technologies generally have a top speed limit of 30 mph and 20 mph, respectively. So why are lower speed electric vehicles (EVs) left out of the incentive regime?

Highway-Capable and Gas-Powered Vehicle Replacement

Part of the reason is likely due to the fact that only on-road or highway-capable vehicles are considered to be worthy of tax credits, based on the larger volume of emissions being avoided from these vehicles. Another explanation specific to e-bikes may be that the technology is seen as replacing bicycles (already a clean technology), not cars. However, this assumption may not be entirely accurate.

A consumer survey conducted by the Oregon Transportation Research and Education Consortium (OTREC) demonstrates that the primary reason respondents bought e-bikes was to replace some car trips (see Figure 1 below). Additionally, the main reason cited by respondents for using an e-bike was to commute to work or school (see Figure 2). The survey from OTREC suggests that e-bikes are used for commuting and to replace car trips much more than lawmakers think or even recognize. Speaking from personal experience, my e-bike replaced both my traditional bicycle and my gasoline-powered car—with the primary purpose of using the e-bike as a commuting vehicle.

While the tax credits are welcome news for the e-motorcycle industry, e-scooters and e-bikes continue to be under-incentivized and under-utilized technologies in the United States. If the primary goal of tax credits for all EVs is to replace or reduce the number of gas-powered vehicle trips, then e-scooters and e-bikes should be considered in the future.

Figure 1: OTREC Survey Respondents’ Primary Reason for Purchasing an E-Bike

Ryan Blog Fig 1

(Source: Oregon Transportation Research and Education Consortium)

Figure 2: OTREC Survey Respondents’ Main Purpose for E-Bike Trips

Ryan Blog Fig 2

(Source: Oregon Transportation Research and Education Consortium)

 

Car-Free in Colorado: Living with an E-Bike

— October 20, 2014

After years of vehicle ownership, I decided about 3 months ago it was time for a change of pace.  Literally.  Tired of the plethora of (and seemingly continually rising) costs associated with owning a vehicle (parking, maintenance, insurance, repairs, registration fees, gasoline, etc.), I sold my car and used part of the funds to purchase an E3 Vibe electric bicycle (e-bike)  for $1,500 from Currie Technologies.  An e-bike is a traditional pedal bicycle with a battery pack that stores electricity, an electric motor for propulsion, and a user control attached to the handle bars for modifying the level of electrical assistance.

(Source: Currie Technologies)

Living in Boulder, Colorado certainly makes this transition much easier than in most U.S. cities.  An excellent bicycling infrastructure, a local carshare program, and comprehensive transit system all contribute to an excellent environment for going car-less.

Cost Analysis

With an upfront cost of $1,500, the e-bike will pay for itself after one year of avoided car insurance and gasoline expenses.  My monthly gasoline and insurance charges were about $130 combined ($80 for insurance, $50 for gas), totaling $1,560 per year.  This is more than the brand new e-bike cost itself, without even delving into the additional avoided costs of vehicle registration fees, parking, maintenance, and repairs.  Just as an example of potential additional costs of owning a vehicle, it’s estimated that in Colorado, the average cost of a common car repair (parts & labor) was $348.17 in 2011.

What about the operating costs for e-bikes? While many organizations estimate the cost of fully charging an e-bike from $0.10 to $0.20, other conservative estimates project that it costs just under $0.25 to charge an average e-bike battery from empty to full.  For me, this would happen about twice a week, since I’m usually charging the battery from half to full power 4 times per week (a 6.3 mile commute round trip usually drains the battery to a little over half power).  Using the conservative estimate of $0.25 to fully recharge the battery, electricity for recharging my e-bike would run about $26 per year ($0.50 multiplied by 52 weeks).  This (wishfully) assumes no winter in Colorado.  With a more realistic projection of biking to work three-quarters of the year, this reduces the annual charging cost to under $20.

Electric Hum

When the weather isn’t suitable for biking to work, I take the bus with a complimentary bus pass from my employer.  However, since I do need access to a vehicle on occasion, I have become a member of Boulder’s carsharing program, eGo CarShare.  So far, I am averaging about $20/month in rental fees, amounting to $240 per year.

Overall, becoming an e-bike owner has not only provided significant financial relief, but has also been an incredibly enjoyable experience.  I bike more often and travel longer distances than I would typically go on a traditional bike.  In addition, I get to confuse other cyclists with the humming sound of a 250W electric motor.

 

E-Bikes Gear Up in North America

— August 20, 2014

While Tesla, Nissan, and BMW get most of the headlines around electric transportation, the electric bicycle (e-bike) market is quietly gaining momentum in North America.  E-bikes are simply traditional pedal bikes with a battery pack and electric motor for propulsion.  Usually a throttle or user control module is attached to the handlebars to allow the user to adjust the power levels of electric assistance.  E-bikes offer a unique market solution for the transportation problems many cities in North America currently face: traffic congestion, fatalities from road accidents, local air quality, climate change, and the economic burdens associated with car ownership.

While the e-bike market has historically been strongest in China and Western Europe, emerging trends have helped position the industry for increased growth in North America.  Combined throttle-control and pedal-assist models, electric cargo bikes, all-in-one retrofit kits and wheels, an aging baby boomer population, and the use of e-bikes in police patrol and various security industries have all contributed to a growing market with strong potential.

Battery Prices Fall

As is the case with the broader electric vehicle market, the increasing quality and affordability of lithium ion (Li-ion) batteries is attracting new customers.  Most Li-ion e-bikes in North America range from $1,500 to $3,000.  While not as cheap as traditional bicycles, this is a relatively small upfront cost to adopt electric transportation.  If the plan is to reduce car trips or ditch your car altogether, your investment will be recouped within a few years of reduced trips to the pump and avoided insurance, parking, and vehicle maintenance costs.  Not to mention the health benefits that come with increased exercise and the avoidance of traffic jams.

Automakers Climb On

Several automotive manufacturers are joining the e-bike party.  In the United States, Ford recently partnered with Pedego Electric Bikes to design a throttle-controlled e-bike, the Ford Super Cruiser.  Daimler AG’s smart unit is one of the most aggressive automotive brands in e-bikes, partnering with GRACE GmbH to deliver an e-bike sold through dealers in Europe.  BMW recently released its pedal-assist Cruise e-bike 2014, which features a Bosch 250 W motor and 400 Wh battery.  Audi, Opel, and Volkswagen have also shown e-bike concepts, though these vehicles have not yet been announced for production.

Navigant Research’s upcoming report on e-bikes, scheduled for publication in the third quarter of 2014, will contain a detailed analysis of global market opportunities, barriers, and technology issues, along with market forecasts for e-bikes, e-bike batteries, and overall sales revenue by region.

 

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