BOULDER, Colo. -- While electric bicycles are highly popular in many rapidly growing economies - particularly China, which accounts for some 92 percent of e-bike sales in the world today - they have yet to catch on in a significant way in North America. Only around 89,000 e-bikes will be sold this year in the United States, for example, compared to 252,000 in Germany, a country with less than one-third the population of the United States. According to a recent report from Pike Research, a part of Navigant's Energy Practice, that will begin to change over the next several years. E-bike sales in the United States will more than triple in the next six years, the report forecasts, reaching 265,000 in 2018.

Worldwide global sales of e-bikes will surpass 47 million vehicles in 2018, generating nearly $12 billion in revenue in that year.

"Although the e-bicycle will remain a niche product in the United States, the U.S. market is expected to expand at a compound annual growth rate of 20 percent," says senior research analyst Dave Hurst. "That means it will continue to trail significant Western European markets, but increases in bicycle infrastructure in growing urban centers and the rise in popularity of alternative means of transport will make e-bikes a viable choice for thousands of new users."

The challenge of distribution remains a significant hurdle to expanded e-bike sales in many regions, including North America, the Middle East, Africa and Latin America. In North America, as in some parts of Western Europe, traditional bicycle dealers have been uninterested in carrying e-bicycles because the customers are not typical bicycle buyers. Some of the world's largest bicycle manufacturers, including Giant, Trek and Schwinn, currently offer e-bicycles, but these vehicles also remain relatively unsupported in the U.S. market. Dealers in the United States are generally required to qualify to sell the vehicles, and many dealers have not chosen to pursue this product line.

The report, "Electric Bicycles", provides a comprehensive analysis of the worldwide e-bicycle and e-bicycle battery industry including an examination of market forces, technology issues, government policy influences, the competitive landscape and key drivers of growth. The study includes global forecasts for e-bicycle units and e-bicycle batteries through 2017, segmented by world region and key countries. An Executive Summary of the report is available for free download on the Pike Research website.

The headlines on the Internet recently read something like this: “E-bikes Get $2,500 Tax Break.”

Actually, they don’t.

Last week the United States Senate Finance Committee approved an amendment authored by Senator Ron Wyden (D-Oregon) to the Family and Business Tax Cut Certainty Act of 2012. The Plug-in Electric Motorcycles and Highway Vehicles amendment states:

“The provision reforms and extends for two years, through 2013, the individual income tax credit for highway-capable plug-in motorcycles and 3-wheeled vehicles. This proposal replaces a 10 percent tax credit that expired at the end of 2011 for plug-in electric motorcycles, three-wheeled vehicles and low-speed vehicles. Thus it repeals the ability for golf carts and other low-speed vehicles to qualify for the credit.”

Basically, the amendment applies only to electric motorcycles that are capable of highway speeds, presumably 55 mph and higher. If Corbin or Myers Motors were actively building Sparrow/NMG EV three-wheelers, they too would qualify for the credit which remains capped at a maximum of $2,500.

Not qualifying are electric-assist bicycles or e-bikes, electric mopeds, and electric motor scooters if they aren’t capable of safely operating at highway speeds. In practical terms, this means that if you buy a $11,000 Zero or Brammo e-cycle, you can take a $1,100 tax deduction, and no more. Currie Technologies IZIP e-bikes don’t quality, neither does the Jetson moped (the company continues to call it a bicycle for legal reasons, though peddling it any distance would be exhausting).

Interested in one of the emerging Vespa-like e-scooters? Don’t count on taking a tax deduction on them either; they’re too slow, so they don’t qualify under the amendment. Also restricted now are Neighborhood Electric Vehicles (NEVs) regarded as ‘low speed vehicles’ by Congress and the IRS. So, Polaris’ purchase of GEM, just took a marketing hit, as do Club Cars, Tomberlin, and other authentic US NEV manufacturers.

Not coincidentally, I believe, two of Senator Wyden’s constituents happen to be located in Oregon: Brammo, based in Ashland and Motoczysz in Portland. Zero is located just down the coast in Santa Cruz, California; and BRD, a motocross start-up, is in San Fransciso, as is Lightning. Vectrix, makers of a highway-capable electric scooter, is located in Rhode Island. Apart from this handful of essentially start-up companies, there aren’t many other e-cycle makers in America. There are even fewer e-bike manufacturers and virtually no e-moped builders.

Which raises an interesting question that I posed to Tom Caiazza with Senator Wyden’s Washington D.C. staff. If the purpose of the amendment is to create and/or save American jobs, why focus on just this handful of companies? Why don’t we also, as they’ve done in Barcelona, Spain and elsewhere across Europe, incentivize a spectrum of two-wheeled mobility options: regular bikes, e-bikes, e-scooters, and electric motorcycles. And to forestall the flood of foreign imports that would surely follow, why not insist in the legislation that to qualify for the tax credit they must be assembled in the US from a high percentage of US-made parts. Such a provision would not only help equalize the cost difference between Asian-made two-wheelers and US-made ones, but would help re-stimulate a largely moribund industry, one ripe for innovation if given the right incentives.

Not that any of this will actually matter. According to Caiazza, while the amendment was approved by the Finance Committee, the chance of the bill actually being voted on in the Senate or its eventual counterpart in the House, is unknown. Like a pair of rutting elks joisting with horns locked in ideological combat, the US Congress may wait until after the November elections before they even consider the bill, if then. Mr. Caiazza wouldn’t speculate when the bill might be taken up. So, don’t hold your breath that the credit will be enacted. But in the interim, maybe the Senator and his colleagues can be persuaded to rethink the measure so that instead of just preserving a few hundred jobs in Oregon and California, it helps ignite a two-wheeled revolution across America. After all, it just takes a couple of sentences in the bill that might read something like this:

“The American Two-Wheeled Revolution Amendment reforms and extends for five years, through 2017, the individual income tax credit on all two and three wheeled vehicles that are assembled in the United States from more than 50 percent U.S. manufactured parts. The maximum allowable tax credit is $2,500 and the minimum on a US-made bicycle is $250 or 10% of the value of the vehicle, whichever is less.”