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How Europe Engineered Its E-Bike Boom

Millions of Europeans now commute by e-bike, a mobility revolution carefully cultivated by governments and employers. If the switch to e-bikes from cars continues at this pace it will be very good news for the environment and help enable countries to hit their climate emission reduction targets.

Initially, e-bikes in Europe were seen mainly as a device for senior citizens. Today, they’ve caught fire among younger riders, according to an industry report by e-bike manufacturer Shimano Steps.

The report found that one in four Europeans now either owns an e-bike or plans to buy one this year. The new users ride longer distances in their everyday lives, many of them commuting to work. More people are also using them during the winter months.

Even before the pandemic, an e-bike boom was underway in Germany. In 2017, 720,000 e-bikes were sold here. In 2018 sales climbed to 980,000,  and then to 1.36 million in 2019. In the first few months of 2020, sales were already trending 30 percent higher. Nearly all of these bikes have only a small engine to assist the rider when pedaling becomes too tough.

There’s reason to believe the e-bike boom has room to grow. Of those who aren’t yet riding, according to the Shimano Steps report, only 19 percent say it’s because they don’t want to. A far more common reason is cost - 40 percent of those surveyed said they couldn’t afford to purchase an e-bike. For example, bikes like the VanMoofS3 (pictured) would set you back around €2,000 / £1,800.

To fix this, a growing number of European countries are subsidizing e-bike purchases. The governments of Austria and Luxembourg will chip in 350 euros. France, home to the world’s most famous cycling race, ponies up 200 euros. Scandinavia is even more generous. In Norway and Sweden, subsidies of around 1,000 euros have triggered a considerable e-biking boom.

German companies have come up with a neat plan that allows their employees to avoid paying the significant costs of purchasing an e-bike upfront - by leasing them from firms specializing in workplace bicycle leases on behalf of their employees. The employer simply retains 25 euros of the employees monthly salary, and when the contract expires after two years, their staff can buy the 3,000 euro bike outright for just 300 euros.

It's clearly a very attractive proposition as there are now 1.6 million employees in Germany riding employer-provided e-bikes.

In the UK, the Cycle to Work (Salary Sacrifice) is a simple scheme whereby an employer can provide staff with an electric bike ‘tax free’ at approximately half the retail price and at no cost to the company. The employee obtains the bike of their choice ‘tax and vat free’, by saving on the PAYE and NI contributions. In addition the company saves the national insurance on the reduced salary and can treat the cost as capital expenditure and claim capital allowance in the normal manner. It's a win win.

If the switch to e-bikes from cars continues at pace, it will be very good news for the environment and help enable countries to hit their climate emission reduction targets.



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