Colorado’s initiative to encourage e-bike adoption through a statewide tax credit is encountering initial hurdles as it launches on April 1st. The program, designed to offer a $450 point-of-sale discount on electric bicycles to every resident, aims to significantly reduce climate-warming emissions. However, a limited number of retailers have signed up to participate, potentially hindering the program’s immediate impact.
While Colorado’s e-bike rebate is one of the most ambitious in the nation, a list compiled by the Colorado Energy Office reveals that only 24 bike sellers are currently committed to honoring the rebates. This limited participation raises concerns that residents may find it difficult to access the discount at their preferred local bike shops or major online retailers right from the program’s launch.
The primary reason for retailer hesitancy is the state’s current reimbursement plan. Bike shop owners like MacKenzie Hardt of Hardt Family Cyclery in Aurora are opting out because the program requires retailers to initially cover the rebate cost. Reimbursement from the state isn’t expected until retailers file their 2024 taxes. For businesses operating on thin margins and with limited cash flow, this delay is financially unsustainable.
“I have to be able to support myself, my family, and my one employee,” Hardt explained to CPR News, highlighting the financial strain the delayed reimbursement places on small businesses. “This program doesn’t allow for that, which is really unfortunate.”
Sarah Thorne, the senior program manager overseeing the rebate program for the Colorado Energy Office, acknowledges the issue and is working towards a solution. By 2025, the Colorado Department of Revenue aims to implement a quarterly reimbursement system, significantly improving cash flow for participating retailers. In the interim, the state is collaborating with financial institutions like ANB Bank and the Colorado Enterprise Fund to provide loans to support bike sellers during the program’s initial year.
“We anticipated for 2024, it would be a fairly slow rollout and we wouldn’t have a large participation from retailers,” Thorne stated, expressing optimism for increased participation once the reimbursement process becomes more efficient. “Once quarterly reimbursements start in 2025, we should see a much larger uptake.”
Colorado’s E-bike Rebate Program: Building on Past Success
Colorado’s foray into e-bike incentives began nearly two years ago. Denver pioneered the concept on Earth Day 2022 with its own e-bike rebate program, offering vouchers up to $1,400. The program was immensely popular, with initial discounts claimed rapidly. Denver has continued to offer subsequent rounds of vouchers, funded by a dedicated sales tax for climate initiatives, and has subsidized nearly 8,000 e-bike purchases from local businesses.
Denver’s success spurred similar programs across the United States and Canada, recognizing e-bike rebates as a cost-effective strategy to reduce transportation emissions, a major contributor to carbon pollution in many regions.
Colorado joined the e-bike rebate movement last summer with a state-level program that provided discounts of $500 for moderate-income residents and $1,100 for low-income residents, with additional incentives for cargo and adaptive e-bikes. This initial state program successfully helped 5,611 residents purchase e-bikes before its funding was exhausted in February, according to the Colorado Energy Office.
The new statewide e-bike tax credit represents a long-term commitment to this climate strategy. Legislatively approved and signed into law by Governor Jared Polis, the program is slated to run from April 2024 through 2032, with an estimated state investment of $120 million. Data from Portland State University indicates this is currently the largest public investment in e-bike rebates in North America.
Retailer Concerns and the Path Forward for Colorado E-bike Rebates
The new statewide program is designed for broader accessibility compared to previous local and state rebates. It is available to all Colorado residents, regardless of income, and eliminates the need for pre-application. However, concerns among bike retailers have been present for nearly a year.
MacKenzie Hardt, who initially supported the program, changed his stance after the consumer rebate was reduced from $800 to $450 during legislative amendments. This reduction also decreased the compensation for bike shops to $50 per bike, down from a potential $100 in the initial plan, intended to cover administrative costs.
Hardt also expresses concern that the reimbursement structure may disproportionately benefit large direct-to-consumer e-bike sellers or retailers backed by major manufacturers. The initial list of participating retailers includes Ride1Up, a large online e-bike retailer, validating some of these concerns. While acknowledging the importance of online options for rural residents, Hardt worries about consumers missing out on essential services from local bike shops, such as proper bike assembly and maintenance support. He fears the program, in its current form, may inadvertently harm local businesses and promote potentially unsafe practices for consumers who purchase e-bikes online without local support.
However, some retailers are choosing to participate despite reservations. Steve Heal, general manager of Wheat Ridge Cyclery, while not enthusiastic about the initial reimbursement plan, believes participation is beneficial for the long-term growth and improvement of the program. “We’re hoping if we support the program, it’ll live on to grow and improve,” Heal stated, indicating a willingness to work through initial challenges for the program’s future success.
Adding to the complexity, the publicly available list of participating retailers may not be exhaustive due to taxpayer privacy laws. The Colorado Department of Revenue cannot release a complete list, and the current list is based on voluntary submissions from bike shops. Therefore, the Colorado Energy Office recommends residents directly contact local bike shops to confirm their participation in the e-bike rebate program.
In conclusion, Colorado’s ambitious statewide e-bike rebate program holds significant promise for promoting e-bike adoption and reducing emissions. While initial retailer participation is lower than hoped due to reimbursement concerns, the state is actively working to address these issues and anticipates greater retailer involvement as the program evolves. Colorado residents interested in taking advantage of the rebate are encouraged to check the participating retailer list and contact their local bike shops for the most up-to-date information.
