You have likely heard about Zero Motorcycle’s Cash For Carbon Program. Zero is offering buyers an additional $1,500 towards the purchase of either their SR/F or SR/S electric bikes. But there are plenty of other incentives out there for electric bikes. These incentives come not only from Zero, but from the US federal government, state governments, manufacturers, and utility companies.
So if you are interested in purchasing an electric vehicle or, more particularly, an electric motorcycle, the incentives can be a significant factor in making an electric vehicle purchasing decision.
In this regard, we’ve compiled a list of some of the readily available incentives. With some research, you may be able to find more.
US federal tax credits
For example, the US federal government has an incentive in place that provides a tax credit of up to $2,500. Called the E-motorcycle Federal Tax Credit or 2-wheeled plug-in tax credit, The government will give you a tax credit of 10 percent based on the final bill of sale purchase price of the bike being bought. Accordingly, a $25,000 bike will fetch the full $2,500 tax credit. A $15,000 bike will bring a $1,500 tax credit and so on.
And, it’s important to note that the incentive is a tax credit, not a tax deduction. Tax deductions only affect your tax liability, a tax credit, on the other hand, comes directly off the bottom line of your tax bill.
Therefore, if you owe Uncle Sam $6,000 at the end of the year, and you are eligible for a $2,500 tax credit, you’ll only owe $3,500 in taxes for that year. The importance of a tax credit versus a tax deduction cannot be understated. It’s huge.
Charging equipment also incentivized
But Uncle Sam isn’t done incentivizing you to go electric. There are also US federal tax incentives for electric motorcycle chargers. The guy wearing the top hat with red, white, and blue stars and stripes will give you a 30 percent tax credit on the cost of a motorcycle charger up to an additional $1,000.
To take advantage of the federal charger tax credit, make sure your dealer provides a separate invoice for the charging equipment and charging accessories. You can then use that separate invoice for tax documentation.
There are also state incentives for electric vehicles, including motorcycles. Unfortunately, they vary quite widely, so you’ll have to check what your particular state has in place for incentives.
These state tax incentives can be in addition to the federal tax incentives. Some states have incentives such as rebates and reduced registration costs and fees. Once again, some states will incentivize you to install charging stations.
Other financial incentives
Another financial incentive can come from individual utility companies. Some will give you a rebate on the cost of the vehicle and may also give you a break on the cost of electricity.
It’s important to note that electric vehicle rebates will not last forever. The federal government currently has limits on how many electric vehicles can be produced by a manufacturer before the credit is reduced or eliminated. Some states have allocated a specific budget amount to incentivize electric vehicles. Once those funds are exhausted, the state may end the incentive program or may extend it with fresh funding. But it’s a gamble that you might not want to take given the tight fiscal constraints caused by the COVID pandemic.
In summary, electric vehicle incentives can make a significant difference in how much your electric motorcycle will cost you. Let’s run down one motorcycle as an example. If you were to purchase a Zero SR/F with an MSRP of $24,390 and charging equipment totaling $2500, you could benefit from the following incentives:
- US federal government electric motorcycle tax credit – $2,439
- US federal government charging equipment tax credit – $750
- Zero’s Cash for Carbon Credit (available until Sept 15th) – $1,500
- State rebate – $X
- State registration/licensing/fee discounts – $X
- Utility company vehicle rebate – $X
- Utility company cost of power discount – $X
Accordingly, in the case of a Zero SR/F, you are looking at minimum incentives of $4,869. Add in the incentives from individual states and utility companies, and you’re looking at a very significant chunk of change.
Electric vehicles are coming and will likely play a significant role in the not too distant future. If you are considering an electric motorcycle purchase, you may want to take a look at the incentives (tax credits, rebates, and discounts) that are currently in place. You can bet that they won’t last forever.
Important Note: Incentives change frequently. Do your homework to determine current incentives. You’ll need to evaluate this information to make the most informed decision. This information is provided for reference only and must not be considered tax advice. Seek appropriate tax advice from a trusted tax professional.