Politics and Government

Minnesota's new rebate powers up 'Year of the e-bike'

A man stands next a bike-1
Tony Winkler explains features on e-bikes for sale in the shop e-Bike Duluth on Wednesday.
Dan Kraker | MPR News

Bike retailers around Minnesota say e-bike sales have surged in recent years. And they expect further growth now that Minnesota has joined the increasing number of states and cities to pass e-bike rebate programs.

“E-bikes are really the wave of the future. They go out the door like crazy,” said Tony Winkler inside e-Bike Duluth, a small shop in a converted home just across the street from Duluth’s popular Lakewalk paved trail.

Winkler said he even sold 30 bikes in March, when Duluth was still buried in its snowiest-ever winter. Customers range in age from twenty-somethings to octogenarians.

The shop where Winkler works stocks less-expensive e-bikes, he said. Still, the cheapest model on the store floor retails for $1,600. That’s why he’s grateful for Minnesota’s new rebate program.

“Because there's people that can't even afford that,” Winkler said.

Income-based subsidies

State lawmakers set aside $4 million for the program in the transportation budget bill they approved last week: $2 million per year in 2024 and 2025.

The maximum rebate is $1,500, up to 75 percent of the value of a new e-bike. And it's scaled based on your income. So the more someone earns, the smaller their rebate.

For a family earning $125,000 a year or more, the most they can get back is $1,000, up to 50 percent of the cost a new bike. 

Minnesota's program also reserves 40 percent of funding for people earning less than the state's median income — about $78,000 for a married couple, or $41,000 for a single filer.

The rebates could be a deciding factor for people who have been on the fence.

National Parks Electric Bikes
The maximum rebate is $1,500, up to 75 percent of the value of a new e-bike.
David Sharp | AP

“Lots of people are sniffing around in the store for e-bikes,” said Nick Milton, general manager of Tangletown Bikes in south Minneapolis. “But financially speaking, it is a big question to ask families to spend $3-$5,000 on a good quality e-bike.”

Already, in the last two weeks, Milton said people have stopped by or called, expressing increased interest in purchasing an e-bike.

“We're really excited about [the rebate program], said Dorian Grilley, executive director of the Bicycle Alliance of Minnesota, which lobbied for the rebate. 

“And I think it'll make a meaningful contribution to our efforts to drive a little bit less and emit a little less greenhouse gas."

Minnesota's program was inspired by Colorado, Grilley said. That state approved $12 million in incentives after an e-bike rebate the city of Denver adopted proved wildly popular. 

It’s a bike world

Rebates are becoming more common across the country. Several states and cities have either recently adopted or proposed different incentives to help people purchase e-bikes.

“I'm calling it the year of the e-bike in that we're really at this tipping point in which we're seeing a significant number of states and cities exploring and putting in place e-bike incentives to bring down the cost of the bikes,” said John MacArthur, a researcher with the Transportation Research and Education Center at Portland State University.

A big motivation for the incentive programs is to get people out of cars and on to bikes, said MacArthur, who's studied e-bikes for the past decade.

That has health benefits for people. It also reduces greenhouse gas emissions. MacArthur said national surveys he’s conducted show about 40 percent of trips that e-bikers take are substituting a car trip, often for running errands, or commuting to work. 

And he said a big reason people report riding e-bikes, isn’t to save the environment, or because it’s healthy, but because they’re fun. Which could prove to be a critical component in motivating people to change their behavior when it comes to transportation.

“The fun factor is potentially the big stickiness aspect to getting more people biking,” MacArthur said.

Just ask Erik Saltvold, owner of Erik's Bike Board Ski, which has 32 shops in Minnesota and around the Midwest.

“Anybody that’s ridden them, they're gonna have an immediate smile on their face,” he said.

A man stands next a bike-3
"E-bikes are really the wave of the future," Winkler said.
Dan Kraker | MPR News

Faster and farther

Most e-bikes have some level of pedal assist. The electric motor gives a boost to the cyclist. 

That means the cyclist is still getting exercise, but they’re going faster and farther than they could otherwise go. E-bikes top out at 20 or 28 miles per hour. Newer bikes can travel 50 miles or more before the batteries need to be recharged.

E-bikes now make up more than half of dollar sales in bicycles at his stores, said Saltvold. He said sales have been doubling annually for the past several years. He expects that to accelerate with Minnesota’s new rebate program.

“The idea is to encourage higher use, higher adoption rates of E-bikes,” he said. “Even though they're fast growth, it's still a very small part of the overall bicycle business.”

People interested in an E-bike rebate will have to apply to the Department of Revenue for a rebate certificate. Bike shops will have to apply to be a qualified retailer.

A Department of Revenue spokesperson said there's no timeline yet on when exactly the rebates will roll out. 

When it does, the available money could get snatched up quickly. That’s what happened in Denver when the city first unveiled its rebate program.

“I’ve got a feeling it's going to be gone pretty quick,” said Winkler at e-Bike Duluth. “But aside from that, I think it's still going give an opportunity for people who would not be able to afford to buy e-bikes, a chance to buy one.”

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