Last Friday, the United States passed a bill that allows citizens to receive a maximum subsidy of $1500 for purchasing electric bicycles
President Biden's Build Back Better Act was passed by the House of Representatives on the morning of November 19th, with high subsidies for the electric vehicle industry being a major highlight of the bill
In terms of electric vehicles, in order to stimulate consumer demand, the bill plans to increase the tax reduction amount per vehicle from $7500 to $12500.
However, not all electric vehicle manufacturers can benefit from preferential upgrades. All electric vehicles sold in the United States will still enjoy a $7500 tax credit, while electric vehicles manufactured by workers of the United Auto Workers (UAW) can receive an additional $4500 tax credit, and if the vehicle's battery is manufactured in the United States, an additional $500 tax credit can be obtained. Stricter "differential treatment" measures are still ahead. After 2027, only electric vehicles produced in the United States are eligible for a tax credit of $12500.
The subsidy targets of this bill also include buyers of two - and three wheeled electric vehicles (electric motorcycles): the bill intends to provide citizens who purchase electric two wheelers with a refundable tax credit equivalent to 30% of the new car purchase price, with a maximum discount of $1500 for electric bicycles and $7500 for electric motorcycles. The 30% subsidy is the first time for electric bicycles, while the previous exemption for electric motorcycles was 10%.
The conditions for electric motorcycles eligible for subsidies are: battery not less than 2.5kw/h, speed not less than 72km/h
At the same time, the bill will provide pre tax commuting allowances for people who ride electric bicycles or shared bicycles to work. According to the proposal, the amount of electric bicycle commuting allowances will be 30% of parking allowances, equivalent to $81 per month and approximately $1000 per year.
The eligibility criteria for electric bicycle subsidies are: electric bicycles priced below $8000.
We know that the majority of electric bicycles in the US market come from China, and the passage of this policy will undoubtedly be a significant benefit for Chinese manufacturers. Yin Xinchi, an analyst at CITIC Securities, stated that as the electric two wheelers sold in the United States are mainly electric scooters with prices ranging from $1000 to $8000, if the new budget agreement is successfully implemented, it will significantly reduce consumer purchasing costs and further promote the overall development of the micro electric vehicle industry. However, the United States lacks a mature micro electric vehicle industry chain and has a strong dependence on imports. It is expected that this bill will directly drive the performance improvement of related domestic enterprises.
