On June 1, 2023, United States senators Tammy Baldwin of Wisconsin and Bob Casey of Pennsylvania announced that they would introduce the Electric Motorcycle Parity Act in the Senate. If enacted, this legislation would expand available tax credits to riders who purchase qualifying electric motorcycles in the US, with the same qualifications required for four-wheeled electric vehicles that passed into law as part of the 2022 Inflation Reduction Act.
In the US, electric motorcycle purchases that met certain conditions were previously eligible for tax credits before the 2022 calendar year. Unfortunately for riders, those tax credits expired at the end of 2021. While some individual states have opted to offer tax incentives for electric motorcycle purchases in 2022 and 2023, nothing has existed at the federal level for the past year and a half at the time of writing on June 5, 2023.
According to Senators Casey and Baldwin, the Electric Motorcycle Parity Act of 2023 would make vehicles with fewer than four wheels (in other words, potentially two- and possibly even three-wheeled vehicles) eligible for the clean vehicle tax credit that is part of the Inflation Reduction Act of 2022. This tax credit awards up to $7,500 to customers if both the vehicle and the taxpayer meet certain requirements.
Existing EV Tax Credits Under the Inflation Reduction Act of 2022
As of June 5, 2023, electric vehicle buyers in the US with certain four-wheeled vehicles that are placed in service after April 18, 2023, can potentially qualify for up to $7,500 in tax credits. The credit amount is determined based on when the vehicle is placed into service (in other words, when you take delivery of it), not when you purchased it.
Personal buyer requirements to qualify include that the vehicle is purchased for personal use and not resale and is also purchased primarily for use in the US. There’s also an Adjusted Gross Income (AGI) requirement as well, which varies based on circumstance. To qualify, taxpayers’ AGI may not exceed $300,000 for married couples who file jointly; $225,000 for heads of households; or $150,000 for all other tax filers.
Electric vehicles that currently qualify for these tax credits must meet certain criteria as well. They must have a battery capacity of at least seven kilowatt hours, and also have a gross vehicle weight rating of under 14,000 pounds. Additionally, they must be made by a qualified manufacturer, undergo final vehicle assembly in North America, and “meet critical mineral and battery component requirements” (more on that in a moment). Finally, the manufacturer suggested retail price on qualifying vehicles cannot exceed $80,000 for vans, SUVs, or pickup trucks, or $55,000 for other vehicles.
Under the terms of this credit, qualifying vehicles could receive a $3,750 tax credit if they meet the critical minerals requirement, and/or another $3,750 if they meet the battery requirement. In total, vehicles that qualify on both fronts could be eligible for a credit of up to $7,500.
The US Department of Energy’s FuelEconomy.gov website has an interactive tool you can use to see whether certain vehicles meet the criteria. It, like the US Internal Revenue Service website, mentions “Critical Minerals and Battery Component Requirements,” but gives no further information about the specifics of those requirements.
However, it seems safe to say that if your vehicle is in the lookup tool, it qualifies—and if it doesn’t, you’re out of luck. As of June 5, 2023, no electric motorcycles are included in the list of qualifying vehicles—a problem that Senators Baldwin, Casey, and co-sponsor Senator Ron Wyden of Oregon hope to address with the Electric Motorcycle Parity Act.
The Electric Motorcycle Parity Act of 2022
As of June 5, 2023, the full text of this legislation is not currently listed via Congress.gov’s interactive legislation lookup tool. We will update this post with appropriate links when the full text becomes available, so you can read it for yourself.
In the meantime, both Senator Baldwin and Senator Casey, who are sponsoring this bill, have issued official press releases about it. Senator Baldwin’s release states that the Electric Motorcycles Parity Act is endorsed by two unions: the United Steelworkers (USW) and the International Association of Machinists and Aerospace Workers (IAMAW). Additionally, it is endorsed by Harley-Davidson and LiveWire.
RideApart has reached out to both Zero Motorcycles and Energica Motor Company for their comments on this legislation but did not immediately hear back. We will update this post if and when we receive a response from either electric motorcycle manufacturer.