US Senate Ponders Electric Motorcycle Tax Credit Extension

08/07/2012 @ 4:16 pm, by Jensen Beeler11 COMMENTS

A pivotal moment on Capital Hill for the electric motorcycle segment, as the US Senate Finance Committee has green-lit a bill that would extend tax credits for on-road electric vehicles, which include electric motorcycles. The measure now goes to the full body of the US Senate for voting, and if passed, then$2,500 in tax credits will continue to be given on electric vehicle purchases.

“Without an extension of this tax credit for the purchase of electric motorcycles, we could be stifling this innovative new industry in its infancy,” said Senator Ron Wyden (D-Oregon). A testament to the lobbying power of electric motorcycle manufacturers, Sen. Wyden is at least correct in his assessment that the federal and state subsidies available to electric vehicle manufacturers create a tipping-scale advantage for this fledgling industry.

With cost being a huge hindrance to the adoption of electric motorcycles, the ability for companies like Brammo and Zero to get tax breaks from governments for consumers, at both the state and national level, is a huge advantage to making electric motorcycles viable in the eyes of potential buyers.

While the Senate still has to vote on the measure, its passage would be a huge boon from Brammo, as the Oregonian company is set to bring its Brammo Empulse R electric street bike to market later this year. If the US Senate fails to pass the federal tax credit for electric vehicles, the Empulse R’s $18,995 price tag is going to look mighty steep — not to mention it could very well be a death blow to the precariously perched Zero Motorcycles.

Source: AMA

Comment:

  1. Westward says:

    I have a feeling the Electric vehicle companies are pricing their products with the subsidies in mind. So I don’t really think the consumer is gong to see any of it…

    Ex. Brammo pricing the Empulse at $18,995 and telling the customer they get a federal rebate of $2500, when the bike should actually be $16,495, and then the customer gets the rebate making it $13,995…

    Either way it’s still too much for what one gets…

  2. What I think would be more stifling to these companies is high unemployment, uncertain tax liablilities and unknown health care obligations. Technology that the market wants does not need to be subsidized. Anybody not buy an iPhone because there is no tax credit?

    The bredth of product line is too limited for the manufacturers of electric cycles. Their business model needs to include things that people will buy without promise of tax credits. Gasoline sill works and is available. Let the sales of ICE powered bikes fund electric R&D. Not subsidized sales of electric bikes. This brings us to the next question. The big four manufacturers of ICE powered bikes do not yet see a need to bring to market electric bikes that will not sell. Ever think that maybe they all know something?

  3. Westward says:

    EM

    Your premise is disingenuous. oil companies are subsidized, always have been. That is what made them the most pervasive industry for fueling vehicles. Imagine the advancements in electrical vehicles if we had done the same a hundred years ago…

    Have you ever heard of Preston Tucker? He created a car back in the late 1940’s that had a rear engine, disc brakes, safety pop-out glass for the windshield, seat belts, and headlights that pointed where the front tires did. The Big 3 Car manufactures crushed him with bureaucracy and politics, mainly because they could not compete with his innovations, and the safety features just were not cost effective.

    You may as well have said the Beef industry should fund the Vegetarian movement, as if that made sense in anyone else’s head…

    Do you honestly think one industry will give up all their investment in what’s made them billions to fund another if it’s going to replace them? They are going to eek out as much profit out of ICE bike’s until there is nothing else before they move into something like electrics.

    That’s what start-ups and up-starts are all about…

    If it were not for forward thinking companies, you’d still be using the latest Motorola Razr, and listening to music on your sony mini-disc player…

  4. Everett says:

    2nd to Westward. Subsidies are plentiful and abundant for petrol in the form of; tax breaks for the oil industry, a gas tax that hasn’t risen since the 90’s (despite our crumbling infrastructure) and most importantly in the wars (and general military presence) in the middle east to the tune of several trillion dollars.

    Promote American jobs, Brammo, (Mission PLEASE!) etc, with electric vehicles powered by American sunshine. Just by extending the smallest of assistance.

    As a side note on my ride in to work today (bicycle ride), saw a Brammo on the streets and a Leaf and I bet a lot more of the other drivers could work an electric into their commute.

  5. Brammofan says:

    Westward: You said “I have a feeling the Electric vehicle companies are pricing their products with the subsidies in mind. So I don’t really think the consumer is gong to see any of it…” This is a “feeling” you have based on what? I think it’s more likely that the bill of materials for the Empulse and Empulse R plus the design costs, overhead, etc., exceeds the current price tag. The investments by Polaris and other companies and individuals help make up the loss and that eventually, when the ‘units sold’ reach a high enough number, it will result in a lower bill of materials and hopefully, at some point, a profit. Brammo and Zero want the tax credit for its consumers because it sweetens the pot and is likely to result in more units sold.

    Also, it’s a tax credit, not a rebate. The companies will never see a dime of this federal money.

    And, to pile on to the El Marillo critics – his statement “Technology that the market wants does not need to be subsidized” is so very very wrong. And instead of talking about oil, let’s talk about another mode of transportation that would never have been developed but for the HEAVY subsidization by our federal government: the railroad. Today, we have a railroad network that is the envy of almost every other country in the world. Would have never happened if it had been left to this “market” you speak of. iPhone not subsidized? Not the phone itself, perhaps (but I bet that much of its internal components have benefited from various incentives or subsidies) and the cell phone network that allows you use it as a phone? Heavily subsidized. I love this country.

  6. Harry, I hate to think of which gutter-slum counties you’ve been to that envy our Amtrak. Or, are you referring to our commercial heavy rail infrastructure?

  7. Brammofan says:

    Definitely the commercial rails.

  8. protomech says:

    Side note: the bill specifies a 10% tax credit, up to a maximum credit of $2500.

  9. Westward says:

    @ Brammofan

    Hence the caveat “feeling”… Looking at the components and build of the Empulse R that I saw in person, I do not see a $19,000 bike. the electric motor regardless of engineering, is not more than a desmo v-twin engine. At the cost that Brammo wants that puts it on par with the Nissan Leaf.

    Nissan introduced the Leaf at $20,000 MSRP in the US, yet dealers are selling it at a premium, touting that it is a very in demand car (Honestly, which car isn’t depending on who is selling it) pricing it at $25,000.

    For a bike that will ultimately cost $20,000, the Empulse is competing with any bike in the Ducati line-up. Call me crazy, but Brammo will lose that comparison 9.5 times out of ten.

    To put it plainly, I am going to by another bike in the near future.

    I would love to maybe purchase an Empulse R. But at it’s current price, I can’t see purchasing it over any number of Ducati’s, and being a Ducatisti – I am a little bias. But every time I even toy with the thought of Brammo, if Ducati does not come to mind, the MV Augusta F3 does…

    If I am thinking about a little city scrambler, than the new 2013 Ninja 250R is far more attractive price-wise.

    Trust me I have done the numbers…

    Also, tax credit or rebate, it’s semantic really, all I know is it’s money back in my pocket…

    On another note: I don’t know when was the last time you have left the US, but the rail system in most modern counties are seemingly light-years ahead of the US. In fact when I think rail system in Europe I think Mission Impossible – futuristic high-speed light rail. When I think of the US rail system, pick any number of westerns that come to mind…

    Don’t get me started on the differences in cellular data bandwidth, cause the US seems like dail-up. Even the Koreans laugh…

  10. protomech says:

    @ Westward

    Nissan Leaf starts at $35200 MSRP.
    http://www.nissanusa.com/leaf-electric-car/vehicle-overview?next=ev_micro.root_nav.overview

    If up-front cost is the overwhelming input you use in your decisions, why would you ever buy a new bike? Kawasaki has done little beyond cosmetic changes to the 250 line since the 80s.. you could pick up a 2008 bike with very few miles for $2k or less. I haven’t even heard definitively if the US bike is getting electronic fuel injection..

    Up-front cost for electrics is very high, yes. They’re still being produced in very limited volumes – comparable in volume, if not in price or workmanship to Confederate and Motus. As a consumer this is not a particularly compelling argument – in the case of the Zeros, you’re looking at a $11-14k price tag for a bike that competes in performance with a $4k gas bike. Total operational costs have the tantalizing promise of being much closer .. but the up-front cost is a huge hurdle for most consumers.

    So they’re expensive because they’re low-volume, and they’re low-volume (in part) because they’re expensive. Subsidies are one way to break down that loop, and (as a nation) encourage development of alternate technologies. And the cost is very small, at least at the national level – the July recalls for the Zeros indicated that around 250 2012 bikes were covered by the recalls. Say an average $1200 rebate, $300k for one of the largest volume emoto manufacturers is a miniscule amount at the national level .. compared to the billions and billions in subsidies spent in mature fields like oil production, farming subsidies, etc.

  11. Bob says:

    At this moment in time electric motorcycles on the market are a compromise in performance and price. Therefore the price needs to be drastically reduced, to the level of ICE bikes, if they actually want to sell them to the general public.