Modeling the impacts of electric bicycle purchase incentive program designs

Abstract

Governments are interested in incentivizing e-bike adoption, due to potential benefits from displacing travel by private automobile. To inform the development of e-bike purchase incentive programs, the objective of this paper is to determine how key elements of program design (particularly rebate amounts and structure) are expected to affect new e-bike purchases. An aggregate demand model is developed and applied to rebate scenarios to examine incentive effectiveness. Results show that rebate programs are expected to be bound by available rebates, not e-bike demand, and additional bike shop revenues exceed rebate costs. At a fixed program budget, fewer, larger rebates yield fewer additional sales, but a larger share of rebates go to low-income and new (marginal) purchasers. Flat and proportional rebate structures yield similar sales, although flat rebates are more income-equitable. Flat rebates are recommended for new e-bike incentive programs, with robust program evaluations to inform future program designs.