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01/08/2013 10:00 AM     print story email story  

Electric Motorcycles Get Charge From Fiscal Cliff Deal

SustainableBusiness.com News

Besides extending the renewable energy production tax and some other green programs, the fiscal cliff deal includes a  specific tax credit for electric vehicles (EVs) that have two or three wheels.

Which EVs have two or three wheels? Golf carts and some motorcycles, that's about it.

This year's tax credit applies only to vehicles that can travel at speeds higher than 45 miles per hour (fast enough for public roads), because last year plenty of golf carts got the credit.

The only category left to receive a 10% tax credit on a purchase then is motorcycles, and when it comes to electric, that brings us to a handful of manufacturers.

Senator Wyden (D-OR) got the credit extended as part of the tax extenders bill because it will help the emerging electric motorcycle industry create 16,000 jobs over five years, reports Bloomberg. Constituents pointed out that electric cars are eligible for a $7500 credit, but there would be none for electric motorcycles if this credit expired.

One of the beneficiaries is Brammo, from his home state, which raised $28 million last year for its electric powertrain technology.

“We’re ramping up right now to produce more bikes every day,” Craig Bramscher, CEO of Brammo, told Bloomberg. “Based on quick dealer feedback we’ve just had this morning, it’s going to have an impact.”

Brammo makes motorcycles such as the urban commuter Enertia and the sports motorcycle Empulse, which can travel at a range of 100 miles at speeds of 100 miles per hour.

The company sells through motorcycle dealerships in the top 80 metropolitan centers in the US, with a focus on San Francisco and Los Angeles. In July, it inked a relationship with GE Capital's financing division that should help it expand its dealer footprint.

Other US companies that make technologies that could benefit from the credit are Arcimoto (Eugene, OR); Zero Motorcycles (Scotts Valley, CA) and ZAP Jonway, a California-China joint venture.

The latter is working on a three-wheeled vehicle, "Alias," that looks like a sports car. It travels at speeds up to 85 mph, and is balanced by two regular wheels in front and a wide tire in the back.

Global sales of electric motorcycles and scooters are poised to reach $18.6 million annually by 2018, according to Pike Research. Sales are particularly robust in China, which accounted for 81% of the market in 2012, which means a potential export market for the US.

It also helps the market for lithium-ion batteries, which the US  now competes in. And it provides a commuting option that's zero-noise, zero-pollution. 

There may be only a few companies that produce these vehicles now, but as the market grows Honda and other manufacturers will likely get in.

The credit also incentivizes production of car-like vehicles three- wheeled vehicles, because the National Highway Traffic Safety Administration regulates them as motorcycles, which means they need less-extensive crash testing and safety tests.

Still, these credits were meant to be temporary, and like a host of others that were extended, like for those who build race tracks, they end up being permenantly renewed.



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