Federal Tax Credits for Electric Motorcycles Set to Expire

12/28/2016 @ 2:12 pm, by Jensen Beeler17 COMMENTS

If you are in the market for an electric motorcycle (or any road-legal electric vehicle, for that matter), you have only a few more days to take advantage of the federal tax credit that comes with the purchase of these machines.

For potential electric motorcycle buyers, that means the 10% federal savings (some states offer their own incentives as well) will only be available for purchases made for the remaining four days of 2016.

Once January 1st, 2017 rolls up on the calendar, electric motorcycles will cost their full freight. How this will affect the space though, remains to be seen.

Federal and state incentives certainly helped electric motorcycle OEMs lure in buyers, as the tax breaks lowered the perceived cost of buying an electric motorcycle – at least for buyers who weren’t shopping with their conscience.

What will be interesting to see in 2017 is whether electric motorcycle OEMs adjust their price structures to maintain some sort of competitiveness against petrol-powered bikes, or if we will see them hold fast to their current MSRPs.

Good economists can probably make an argument for either reality.

Source: Zero Motorcycles

  • Fivespeed 302

    I ended up only getting something like $82 back after my Zero purchase. It was nice, but I was hoping for more than that.

  • with the $$$ I’ve saved on gas & maintenance in the past 3.5 years, I would still buy one without the fed credit. Still, I think EVERYONE should go electric for their daily rider not only because you never have to get up early to stop for gas on the way to work, or because you can beat ANY supercar (except a Tesla) off any light in LA, but also because it’s the most powerful way to stick it to the man. The Man, in this case, being Putin, Tillerson, and all the others whose fortunes depend on our use of oil. Fuck all those guys to hell, and their little puppet, too. Do it as the ultimate act of rebellion.

  • Yeah, I always thought the tax credit was a bit misleading of a discount. Depending on how much you’re already deducting, the benefit can vary widely.

  • It’s a tax credit, not a tax deduction.

    Unless the tax credit exceeds the amount you paid in federal taxes – or you otherwise do not meet the criteria for the credit – then you should get the full amount back applied against your tax burden, and a check in the mail if you have then overpaid on taxes.

    With all of that said – it’d be much better if it was applied directly to the out-the-door price.

  • Shinigami

    Root, hog, or die. (If the loss of a questionable tax break substantially damages the market for electric, maybe it wasn’t that strong to begin with)

  • Shinigami

    Nonsense. All you’re doing is creating another “man”.

    Your bike probably uses Lithium Ion technology.

    China controls 85-90 percent of the Lithium battery market, including elemental lithium, along with other elements used in batteries suited to motor vehicles.

    You are merely exchanging our “man” from one in the Middle East to one in communist China.

    Congratulations, there, rebel. (slow clap).

  • Emptybee

    Hate to tell you, but your electric vehicle is most likely powered by natural gas or coal.

  • Yes, I understand that.

    Whether it’s a credit or a deduction, how much it actually benefits you will vary widely, depending on other deductions and withholdings on your tax return.

  • As an LADWP customer, I know exactly how my EV is powered, and it’s still a lot better than powering it with gasoline. but yeah, your 100mpg car is so much cleaner than this: http://www.ucsusa.org/clean-vehicles/electric-vehicles/ev-emissions-tool#z/90039/2013/Fiat/500e

    500e cuz Zero isn’t on that list. yet.

  • I’m sorry, I couldn’t hear you over the rumble of construction at the new lithium plant in Nevada… or Wyoming…or Louisiana… The biggest battery plant in the world is in Nevada, conveniently located near a massive lithium deposit: https://cleantechnica.com/2014/09/15/teslas-lithium-supply-relies-americas-loneliest-highway/

    oh and, my local utility is kicking the gas habit too, making it easier to solar-power EV’s https://www.tesla.com/blog/addressing-peak-energy-demand-tesla-powerpack

    So while us motorcyclists have to settle for inferior Chinese batteries (for now), I think our government being massively indebted to China in the form of bonds is a much bigger problem than the gigafactories that will continue springing up around the world. http://www.businessinsider.com/china-is-selling-us-government-debt-2016-2

  • Jason

    For a lot of people the credit would exceed their tax bill as about 45% of people pay no Federal Income Taxes. These people would get no electric bike (or car) tax credit.

  • Wayne Thomas

    Righties will cheer this as a step forward to free market competition all the while ignoring all the tax subsidies and military occupation of the Middle East that is funded by tax payers rather than the oil companies reaping the benefits. Governments pick winners and losers. Always have. THe US needs to pick winners of the future rather than of the past.

  • Fivespeed 302

    It is really nice just hopping on and taking off. The best part of all is no chain to mess with. But then the lack of oil changes and air filter cleanings are really nice too. It’s really hot here so the lack of motor heat is also really nice.

  • Not as hard as you might think.

    A Zero SR with charge tank runs about $18k, so $1800 in federal tax credit.

    A single person would need at least $15k in taxable income (line 44, 1040) to max out the credit, a married couple filing jointly would need at least $18k.

    To max out the $7500 federal tax credit, a single person would need $47k in taxable income, a married couple filing jointly would need $56k in taxable income.

    If I’m reading the numbers correctly, approximately 90% of filers owe enough to maximize the credit for the Zero, and around 50-60% of filers owe enough to maximize the car credit.

    Per tax liability stats here:
    https://www.irs.gov/uac/soi-tax-stats-individual-statistical-tables-by-size-of-adjusted-gross-income

    Typically, people that would lay down $18k on a new motorcycle or 35k+ on a new car are in the upper income brackets anyways – which is another problem.

  • Jason

    You are reading the IRS information incorrectly.
    In the file – All Returns: Adjusted Gross Income, Exemptions, Deductions, and Tax Items (2014) All you need to look at is the first column (number of returns) and then the rows:

    All Returns, Total (148.6 million)
    Taxable Return, Total (96.5 million) 65%
    Nontaxable Returns, Total (52.1 million) 35%

    In 2014 35% of households paid $0 in federal income tax. Only 44 million households (30%) even itemized deductions

    That means that anytime someone is considering purchasing an item that has a tax credit or deduction they need to carefully consider whether they pay enough in taxes to get the credit. EVs, solar panels, efficient heat pumps or furnaces, etc.

    Personally I think this is a very poor way to incentivise people to buy these items which is the purpose of the credit. I think instead of tax credits we should use rebates paid to the retailer at the time of sale. That would ensure that anyone regardless of income could get the credit, and they would get the credit immediately instead of paying up front and then waiting up to a year to get the money back at tax time. (State of Oregon credits for residential solar are paid back over 3 years)

  • Ah, good point.

    With the updated data, then, approximately 55% of filing households qualify for the full motorcycle credit, and approximately 33% of filing households qualify for the full EV car credit.

    100% agree that a tax rebate would have been a more effective subsidy.

    However, the tax credit still has some subsidy benefit even for those who cannot use it directly. The tax credit is frequently rolled into leases, and it also indirectly subsidizes the secondary market by reducing the effective cost of the car. Part of why the Nissan LEAF depreciates so much, though the other part is higher battery degradation in the 2010-2012 models.

  • Jason

    Yes, many leasing companies will roll the tax deduction into the lease agreement but that isn’t always the case. I leased 2016 Chevy Spark EV this year and the tax credit was not rolled into the lease. I leased the vehicle anyway due to other rebates bring the lease down to $100 a month but it would have been significantly cheaper for me to buy the car. (The purchase price after the tax credit would have been $9600)