How a proposed federal e-bike incentive could lead to fewer battery fires

As electric bikes grow in popularity, the number of deadly fires caused by faulty lithium-ion batteries has also risen. One of the main culprits? Cheap e-bikes delivered from non-reputable, overseas companies direct to consumers.

A reintroduced bill that would provide Americans with a federal rebate of up to $1,500 toward the purchase of an e-bike could help consumers afford higher-quality bikes. That could help reduce the growing number of e-bike fires that have plagued cities like New York.

U.S. Representatives Jimmy Panetta (D-CA), Earl Blumenauer (D-OR), Mike Thompson (D-CA) and Adam Schiff (D-CA) reintroduced this week the Electric Bicycle Incentive Kickstart for the Environment (E-BIKE) Act. If passed, the incentives will cover 30% of the cost of a new e-bike, up to a maximum credit of $1,500. Only bikes that are priced at less than $8,000 qualify. Sen. Brian Schatz (D-HI) has introduced companion legislation in the Senate.

Schatz originally introduced the E-BIKE Act in 2021 as part of the Biden administration’s Build Back Better (BBB) Act, which passed in the House of Representatives but didn’t clear the Senate hurdle. The Inflation Reduction Act, which was essentially a shrunken down, negotiated version of the BBB, did pass and was signed into law in August 2022. The E-BIKE Act was, unfortunately, left out of that bill’s language.

The reintroduced bill is designed to both make e-bikes more accessible to lower-income Americans, and ensure that only safe, reputable bikes are eligible for the program. New to this version of the bill is the addition of income caps parallel to existing electric vehicle tax credit caps: an annual salary of $150,000 for single filers, $225,000 for heads of households and $300,000 for those filing jointly.

Crucially, the legislation includes additional language to help address battery hazards by defining tax credit-eligible e-bikes as:

Having a drive system that has been certified by an accredited laboratory to Underwriters Laboratory (UL) standard UL 2849, or a battery that has been certified to any of the battery safety standards listed in UL 2849 or such other drive system or battery safety standard that is or may be recognized by the United States Consumer Product Safety Commission.

The UL standard offers electrical and fire safety certification by examining e-bikes’ electrical drive train system, battery system and charger system combinations.

“The idea is that the incentive is going to go towards bicycles that are being sold at reputable dealers and meet certain safety and testing standards, so that the products that are coming in direct-to-consumer from China and from brands that aren’t very recognizable and don’t meet any international or recognized testing and electrical safety standards aren’t the ones that are being subsidized for purchase,” Noa Banayan, director of federal affairs at People for Bikes, told TechCrunch.

Banayan noted that creating a subsidy for higher-quality products is one of the main ways policymakers and advocates are hoping to phase out potentially dangerous e-bikes.

The proposed federal incentive is modeled off of successful local programs in the United States, such as Denver’s 2022 e-bike rebate program. By the end of last year, Denver issued more than 4,700 e-bike rebates, with 67% going to low-income residents. Perhaps even more encouraging, low-income residents reportedly used their bikes 50% more than standard voucher recipients. The program was estimated to have cut 2,040 metric tons of carbon dioxide in 2022 and saved nearly $1 million in avoided fuel and electricity costs.

Mike Radenbaugh, founder of Rad Power Bikes, told TechCrunch that close to half of the vouchers redeemed in Denver were for Rad bikes.

“I think that speaks to an established brand, the largest e-bike brand in North America, and people looking for an e-bike that’s for real, durable, day-to-day transportation,” said Radenbaugh, noting that Rad bikes are built with Samsung, Panasonic and LG battery cells. “I do think a lot of the fly-by-nights, the imitation and knockoff brands, will be most impacted [by this proposed legislation].”

From phasing out to banning bad batteries

Policymakers also hope to phase out low-quality batteries by banning the import and sale of non-compliant lithium-ion rechargeable batteries used in bikes and scooters.

New York City — with its thriving ecosystem of gig delivery workers — has been hit particularly hard by battery fires linked to electric micromobility devices. The Fire Department of New York reports that rechargeable lithium-ion batteries have caused more than 400 fires in the last four years (200 of which occurred last year), resulting in more than 300 injuries, 12 deaths and damage to more than 320 structures.

At the local level, NYC Mayor Eric Adams announced an action plan earlier this week to stop battery fires and promote safe electric micromobility usage. Part of that plan was the signing of a law to prohibit the sale, lease or rental of e-bikes and scooters and storage batteries that fail to meet recognized safety standards, and another to prohibit the assembly, reconditioning or sale of “lithium-ion batteries using cells removed from used storage batteries.”

Aside from low-quality batteries, George Kerchner, executive director of the Portable Rechargeable Battery Association, an industry trade group, says refurbishing batteries is another major cause of fires.

“When you’re modifying a battery design that has safety features associated with it, and you’re in there tinkering with it, that certainly has the possibility of compromising those safety features that the battery has built in,” Kerchner told TechCrunch.

There are also moves at the state level to ban non-compliant batteries.

U.S. Representative Ritchie Torres, a Democrat who represents the South Bronx, proposed federal legislation on March 7 that would require the Consumer Product Safety Commission to establish a final consumer product safety standard for e-bikes and e-scooters to protect against the risk of fires. The proposal came two days after a battery powering an e-scooter exploded in a Bronx supermarket and food plaza and caused a five-alarm fire.

The one problem with legislation designed to prohibit the sale or rental of vehicles that fail to meet safety standards is that it’ll be incredibly difficult to enforce it, says Kerchner.

“I think the incentives will go a long way and will be more effective than the ban itself,” he said. “At the end of the day, a good quality bike is relatively expensive, and providing an incentive to buy a higher-quality bike and providing those discounts will raise the bar, and you’ll see fewer fires as a result of that.”

How a proposed federal e-bike incentive could lead to fewer battery fires by Rebecca Bellan originally published on TechCrunch