The Basis For a Subsidy

This article was originally published in 2017

It seems Mr. Norman has come out in support of the possibility saying that an electric bike subsidy could happen; “We’ve done some work on that already, and I haven’t looked at the outcomes yet, and they might not be ready yet.  There’s a case in principle.”  Additionally, the Roads Minister focused on the potential health benefits that the electric bike subsidy could bring and the implications for large businesses.

Electric bikes have historically been passed over for subsidies by The UK's Office for Low Emission Vehicles (OLEV) despite grants being offered across a range of electric cars, vans, and motorbikes.  Current grants available include up to £4,500 for an e-car, £8,000 for an e-van and £1,500 for an e-motorbike.  A full list of currently eligible vehicles can be found on OLEV’s website.

A tweet from OLEV back in February 2017 continued to support this viewpoint and caused some controversy among ebike supporters.

It seems that the reason electric bike grants have been overlooked thus far is the way they are categorised by OLEV.  The department views them as not being a suitable alternative to other combustible engine vehicles as seen in the Tweet.

However, this viewpoint could be considered controversial by many as ebikes can often be used as alternative transport or for cycling to work.  Particularly where the distance or terrain covered on the journey prohibits the use of a non-electric bicycle.

Additional Benefits and Implications

As a self-professed keen cyclist Mr Norman has come out in support of the grant and has highlighted the additional potential benefits that could be offered by such a scheme.

Top of the list is the “tremendous opportunity” for large online retailers such as Amazon making deliveries in city centres.  Mr. Norman stated; “In terms of local deliveries, a lot of these Amazon deliveries are lighter things – you don’t need a Transit van to be doing that…  I think e-bikes and ebikes-plus are a really interesting potential way of handling that last mile or two of deliveries.”

Additionally, issues such as the health crises facing the UK from pollution and inactive living were considered.

E-bikes in Other Countries

The UK Government’s historic stance on funding for electric bikes has been quite at odds with other parts of Europe.  France currently offers a grant of €200 towards the purchase of an ebike while Norway's capital Oslo, has introduced grants of up to $1,200 towards electric cargo bikes.

Most recently the Swedish Government has presented a budget for 2018 which includes a 25% subsidy for electric bike sales. The budget includes a figure of €35 million which will be set aside each year from 2018–2020 to fund the scheme.

A statement from the European Cyclists' Federation declared this step as "…a spectacular success for the development of e-bike sales in Sweden, which is now the benchmark for all European countries to follow".

The growing popularity and acceptance of ebikes may well have a part to play in this.  The 2017 Transport Reviews journal highlights the disparity between ebike popularity across Europe.  In both the Netherlands and Belgium, Ebikes accounted for 30% of all bike sales in 2016. In Germany, Austria and Switzerland, they accounted for 10–15% of all bike sales.  This is a stark contrast with the UK where ebike sales make up a far smaller percentage of total bikes sold.

Other Options Available to E-bike Purchasers

It has been argued that any prospective ebike purchaser can still benefit from schemes under the Cycle to Work offering.  However most major Cycle to Work schemes only permits the purchase of bikes up to £1,000.  This can be extremely problematic if you’re purchasing an ebike as the majority of ebikes on the market are priced above this value.  Particularly those offering good electric assist range capability and system quality required for regular commuting.  There are ways around this cap by offering a deposit value on your ebike or by going through Cycle to Work schemes which do not have that cap such as our own ebike access scheme.  Unfortunately, these options are not always possible due to the value of the deposit required for the deposit or the fact that your employer would have to subscribe to the uncapped Cycle to Work schemes.

It is also important to note that Cycle to Work schemes are not open to everyone.  To be eligible for a cycle to work scheme you must be currently employed and therefore must be of working age. This excludes those over retirement age who are one of the key groups ebikes would benefit.  Additionally, your individual employer must be signed up to the Cycle to Work scheme for you to benefit.  With the subsidies offered on electric cars, vans and motorcycles no such restrictions apply.  Furthermore, the Cycle to Work schemes function on a salary sacrifice system allowing you to spread the cost of the bike over a number of pay checks which is fundamentally different from the OLEV vehicle subsidies which are offered as a cash reduction on the value of the vehicle.

What an Electric Bike Subsidy Would Mean for the UK

An electric bike subsidy in the UK could mean a change in the way people commute and exercise by removing the barriers that some face in the upfront cost of an ebike. Ebikes are still relatively new to the UK market and have not yet reached the levels of popularity achieved in other European countries.  The offer of an electric bike subsidy may open up the use of ebikes to a wider audience and encourage healthy, environmentally friendly transport.

See Raleigh's current electric bike range here and find out how much you could save by signing up to our very own ebike access cycle to work scheme.