E-Bike Incentive Programs Need Well-Defined Goals To Be More Effective – CleanTechnica

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Incentive programs meant to catalyze the adoption of greener, cleaner, low carbon technologies, such as we’ve seen with solar and EVs, and most recently e-bikes, can be effective if done right, but when a cookie-cutter one-size-fits-all approach is used, they can end up being not very cost-effective or efficient in moving the needle toward the desired outcome.

A recent study analyzing the “consumer purchase response” to existing e-bike incentive programs suggests that these programs could be more equitable, cost-effective, and efficient if they begin with the end in mind. In essence, starting out with clear and well-defined goals for incentive programs is necessary for designing, funding, and implementing them with maximum effectiveness.

The study, “Consumer purchase response to e-bike incentives: Results from a nationwide stated preference study,” was published in the journal ScienceDirect this past April, with the authors stating in its Abstract that it is “among the first to experimentally analyze prospective purchase behavior of e-bike consumers to assess price sensitivity, behavioral response to incentives, and consumer value of e-bike attributes.”

“Purchase incentives offset the price of an e-bike for consumers, with the goal of increasing e-bike adoption and ownership. While programs initially offered incentives of $300 or less, amounts have progressively increased over time. The 2023 legislative cycle has seen a notable expansion in state- and province-level purchase assistance programs, as well as the re-introduction of a proposed federal tax credit known as the “E-BIKE” Act. Despite the growing funding allocated to e-bike purchase incentives, there is little evidence as to their cost-effectiveness or optimal design.”

Some of the results of the study are pretty straightforward, and perhaps no-brainers:

• Point-of-purchase discounts are more cost-effective than rebates or tax credits for stimulating additional e-bike adoption
• Cost-effective e-bike incentives require equivalent amounts provided across standard and cargo e-bike types, and require the largest incentives be provided to those in the 200–300% FPL (Federal Poverty Level) income range

However, one finding that really stood out was this (emphasis added):

“[W]e find that even when e-bike incentive programs are designed cost-effectively, the costs per ton of CO2 reduced still far exceed those of alternatives or reasonable social costs of GHG emissions. We conclude that the argument for allocating public funds for e-bike incentive programs must be based on the co-benefits of e-bike travel and ownership, and not solely on GHG reduction.

If you don’t have time (or access) to read the full text, an article published on GovTech about the study offers a great summary and some additional insights direct from the authors. For example, “it takes about $4,000 worth of incentives to induce that extra e-bike purchase,” which far exceeds the benefits gained by displacing carbon emissions due to the adoption of that e-bike.

As we are likely to see a lot of political pushback on any and all government incentive programs for cleaner transport and energy in the US in coming years, using the findings of this study — and others like it that may follow — could be a key element in designing and funding effective programs in the near future.