E-bikes have long been hailed as the way to save urban transportation and therefore our cities. But one of the key challenges to getting more people to cycle, especially on e-bikes, is their high cost. Now, there are more and more programmes to subsidise the purchase of electric bikes.

In the US, there has recently been a surge of e-bike incentives in over 100 cities, counties and states. These programmes encourage residents to purchase e-bikes, emphasising the enthusiasm many policymakers feel around the topic. Even the US Congress has considered enacting an e-bike incentive programme at the federal level.

And the benefits are clear: E-bikes are greener than individual cars and even than public transport, they are healthier for cyclists, and they are much more space-efficient. They are also less dangerous for other road users. The challenge in many cities is how to get people to cycle, which – beyond providing bikes – might require better cycling infrastructure, changing and showering facilities in offices, and safe parking spaces for e-bikes.

Direct discounts incentivise e-bike purchases

Some cities and countries have been offering discounts and incentives for e-bike purchases for years. The Île-de-France region offers 500€ off new e-bikes and in the UK, the eBike Cycle to Work Scheme allows employers to provide e-bikes tax-free and at half-price to their employees. In the US, Denver became the first city to offer e-bike incentives in 2022 with vouchers of 400 USD for electric bikes and 900 USD for cargo e-bikes. So far, almost 8,000 people have redeemed a voucher in Denver. Since then, over 150 cities and towns of all sizes in the US have followed suit.

A new study from the US, published in Transportation Research, takes a closer look at analysing the purchase behaviour of e-bike customers. The idea is to understand price sensitivity, response to incentives, and consumer value of e-bike attributes. According to the authors, e-bike incentives can be powerful levers in shifting behaviour and getting people to cycle. They found out that point-of-purchase discounts are particularly useful, since lower-income people might not be able to pay as much up-front. Tax credits and mail-in rebates are also showing effects but are much less popular than direct discounts. To maximise the adoption of e-bikes, it is important that discounts are easy to redeem. They should be targeted toward low-income residents without overstating the effect on greenhouse gas reductions. After all, cycling also leads to health benefits, increased mobility, travel affordability, safety, and congestion reduction.

E-bikes are not the most cost-efficient CO2 mitigators

The study focused on low-income groups, who are often the target of e-bike incentives. Importantly, policymakers should also look at the motivation behind buying an e-bike, which is often to save money by being able to forego the car. At the same time, the researchers also found that the cost of voucher or other incentive programmes are relatively high compared to the reductions in greenhouse gas emissions. E-bikes would need to replace hundreds of thousands of miles of car travel before the value of avoided emissions exceeds the costs of vouchers.

Therefore, the researchers suggest focusing on other CO2 mitigation tactics, which are more cost-effective than e-bike incentive programmes. Reforestation and clean power plants are some examples of sustainable initiatives that have a bigger impact on greenhouse gas reductions than urban trips taken on e-bikes. While the e-bike is still part of sustainable mobility, there are many other urban planning interventions that have a larger impact on CO2 mitigation in cities.

Consider the many other benefits of e-bikes

While it might seem disappointing that e-bike incentive programmes are not particularly cost-effective, there is an important point that the study makes: The reduction of greenhouse gas emissions is just one of the many benefits that electric bikes bring. Public health, reclaimed street space and more mobility equity are key benefits of e-bikes. Therefore, it is important to think about e-bikes and e-bike incentive programmes not just in terms of CO2 reduction performance, but also in terms of health and social equity.

Through smart policy choices, policymakers and planners can unlock the many benefits from e-bikes that replace the individual car. Incentive programmes can help to target those at the lower end of income distribution and introduce costly cargo e-bikes. When combined with measures such as adequate infrastructure, safe traffic codes, and opportunities for cycling to work, these programmes can help to increase the number of e-bikes on our streets.

There are many other factors to consider, from speed limits for e-bikes to insurance, the idea of introducing number plates, and the safe disposal of batteries at the end of an e-bike’s lifecycle. But it is clear that they are an essential part of the mobility of the future. They allow everyone to choose a sustainable, accessible mode of transport and improve our health at the same time.

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