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July 21, 2022

Want to Save Americans Money at the Pump? Invest in Bikes

By: Noa Banayan, PeopleForBikes’ director of federal affairs

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The Biden administration and Congress could quickly lower transportation costs for Americans by investing in bike infrastructure and e-bike purchase subsidies, as well as fight inflation by relieving Section 301 tariffs on bicycle imports.

One of the few bipartisan agreements in Congress right now is that a gas tax holiday is a false, shortsighted solution to saving Americans money at the pump. Despite this one area of agreement since President Biden first called for a gas tax holiday in June, his administration is still asking Congress to deliver

Congress can heed President Biden’s call to save Americans’ real money at the pump by focusing on bikes, not a temporary suspension of a tax on gas. By investing in solutions that make it safe and efficient for all Americans to choose transportation options other than driving, like biking, walking and public transit, we can ensure an affordable and sustainable mobility future.

We need long-term solutions to the energy and inflation crises that we can begin implementing today. If we want stability in our transportation system and energy portfolio, we need to look beyond Band-Aid solutions. We know bikes will never eclipse cars in use, but the United States can’t afford to wait a decade or more for a fully electrified road fleet. 

Why bikes? According to the U.S Department of Energy, 60% of the time Americans get in their car, they travel less than six miles. On electric bicycles that provide a low-speed pedal assist or throttle-actuated boost up to 20 or 28 mph, that distance is easily achievable in 15-20 minutes for most riders, likely without breaking a sweat. Even more, electric bicycles with cargo carrying capacity offer riders new ways of carrying small children, groceries, deliveries and so much more with ease, efficiency and the inherent joy and satisfaction that comes from riding a bike. 

Beyond the individual benefits of riding more often, shifting more car trips to those made by bike and e-bike in the U.S. holds meaningful potential to reduce emissions and fight the climate crisis. Nearly a third (and the largest share) of all carbon emissions in the U.S. come from the transportation sector, the majority of that share from passenger vehicles. Research from Portland State University’s Transportation Research and Education Center shows that a 15% shift from car trips to e-bike trips could lower carbon emissions by 12% — more than one-fifth of the Biden administration’s goal of 50% emissions reductions by 2030. 

Rising gas prices and inflation continue to inflict real damage on American families, making immediate policy action for more affordable transportation solutions a growing necessity. From tax benefits for e-bike purchases and bike commuting to tariff relief for bike products, Congress holds all the right cards to usher in a low-cost, low-carbon future. They just need to play them.

Whatever small potential for relief a gas tax holiday might offer, which remains up for debate when it remains at only 18 cents/gallon in the long term, gas prices will constantly fluctuate based on the supply chain, geopolitical issues and other uncontrollable forces. Concrete barriers that create safe places to bike, once built, will not. 

Investing in networks of protected bike lanes that connect communities and individuals with their destinations makes it easier for Americans to know they’ll be safe when choosing to bike for short trips. The Bipartisan Infrastructure Law authorized $200 million/year for the Active Transportation Infrastructure Investment Program, a new federal grant program designed to fund critical connections in bike infrastructure networks. The question of how much funding the program actually receives stands before the Senate Appropriations Committee. By funding at the authorized level, the program can quickly start to build missing pieces of active transportation networks, connecting communities and regions and helping more Americans choose biking and walking for short trips. 

A consumer-facing tax credit for electric bicycle purchases — like the one modeled off the E-BIKE Act (H.R. 1019/S. 2420) and included in the House-passed Build Back Better Act — could save lower-income Americans $900 when purchasing a qualifying new e-bike. Current estimates for the average cost of car ownership run more than $9000 per year, thousands more than the average one-time cost of an e-bike. The larger, longer-term savings come from replacing short car trips or a second family car with an electric bicycle. E-bikes don’t require costly insurance, parking, maintenance and, most importantly, gas. Their batteries can reach a full charge for less than a dollar in electricity costs.  

Another transportation cost-saving provision already passed in BBB is the Bike Commuter Benefit, which would offer commuting Americans $81/month, pre-tax, to use on costs associated with biking to work. Whether that’s spent on bike share, bike maintenance, safety products or anything else is up to the individual. Presently, no federal commuting benefits exist for individuals choosing to cut out traffic, congestion and emissions by riding a bike to work. 

Congress could also help lower inflation on in-demand products almost immediately by sending the Senate-approved United States Innovation and Competitiveness Act (USICA) to President Biden. Critical provisions in USICA to retroactively relieve and end the Section 301 tariffs on bicycles and bicycle products will help lower prices for U.S. consumers and allow bike companies to better prepare for future demand. 

If President Biden wanted to act swiftly to cut inflation on products that support low-cost transportation and mobility options, he could direct the Office of the United States Trade Representative to unilaterally end all Section 301 tariffs on bicycles and bicycle products. Members of the administration have even called out bicycles as undeserving of added duties and as potential sections of the broader list of tariffed imports in line for relief. 

Americans need solutions now to save money on gas and transportation costs. On the bright side, states and cities are quickly making progress where Congress stalls: the number of proposals for e-bike and bike-riding incentives skyrocketed in state legislatures and city councils in 2022. For example, the city of Denver launched a robust and well-developed e-bike voucher program that was so in demand it ran out of funding in two weeks

Incentives and infrastructure are necessary investments to shift purchasing and transportation behaviors. The concepts are proofed and the policies are ready, now we just need President Biden to call on Congress to invest in bikes, not a gas tax holiday.

Related Topics:

Electric BikesSustainable Transportation
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