Changes afoot for Minnesota e-bike rebate after wobbly rollout last year

New legislation would limit Minnesota’s e-bike rebate program to lower-income Minnesotans and deliver vouchers through a lottery after the program’s rollout last year overwhelmed its website.

The program, which allocated $2 million for rebates both in 2024 and again this year, had a bumpy start for its manager, the Department of Revenue, people who sought rebates and even some bike sellers.

The application process was first-come, first-served for e-bikes, which are increasingly popular, especially among older adults.

Last June, the state’s rebate platform online crashed within minutes of going live. The system didn’t reopen until early July. When it did, the program hit its 10,000-applicant cap within 20 minutes.

There were other challenges. Some bike sellers criticized the revenue department for the program’s setup. Customers were inquiring about rebates before retailers knew whether they were eligible. Also, some would-be buyers were holding off until they found out if they won a rebate come summer.

The state ultimately awarded 1,519 rebate vouchers, including a second round in the fall; 1,335 were redeemed with an average value just less than $1,339, according to the revenue department. Unspent funds will roll into this year’s rebates.

Bipartisan legislation introduced by Senate Republicans and DFLers would substantially change the program.

Only taxpayers with an adjusted gross income of $78,000 or less (married filers) or $41,000 (single) in 2024 would be eligible for a rebate.

Last year, the revenue department reserved 40% of the rebates for people with those income limits.

“There is not enough money to meet the demand,” said Michael Wojcik, executive director of the Bicycle Alliance of Minnesota, “so this [change] helps the people who would most benefit from financial assistance.”

Applicants would have a window to register for the program. The revenue department would then use a lottery system if the number of eligible applicants exceeds the available rebate vouchers.

The rebate would cover up to 75%, or up to $750, of the cost of a new e-bike or qualifying expenses.

Last year, the maximum rebate was 50% to 75% of the cost of a new e-bike, up to $1,500.

Wojcik said prices have dropped for some e-bikes since the program was approved in 2023. (A random online check of inventory at Erik’s, one of the eligible bike sellers, found an Aventon Pace 500 on sale for $1,000.)

Hypothetically, the lower discount should double the number of rebates awarded, Wojcik said.

Shane Delaney, deputy assistant revenue commissioner, wrote in an e-mail to the Minnesota Star Tribune that his department “does not have any concerns with the proposed changes.”

“As with any legislative change,” he added, “it will take time for the department to implement. If these changes are passed late in the legislative session, it will push back the timeline of when the next round of e-bike rebate certificates will be available, likely to late summer or early fall.”

The public can sign up for e-mail updates from the revenue department about the rebate program.

Luke Breen owns Perennial Cycles in Minneapolis, one of the 200-plus eligible sellers. The revenue department is encouraging more retailers to apply.

Breen’s shop sells high-end electric bikes, starting at $2,500, with cargo bikes especially popular. He deemed the program a success overall.

“We sell bikes,” he said, “and our bikes are car replacements. That is a win for all of us.”

While his customer base is generally too well-off to qualify under the revised program, Breen said he is glad legislators are trying to accommodate more people with less means.

That is the goal, said GOP Sen. Jim Abeler, one of the bill’s co-authors. The others are Republican Sen. John Jasinski and Democrats Scott Dibble and Omar Fateh.

Abeler said the legislation could narrow the field of rebate recipients further as it works it way through committees. One idea is to make rebates available solely to people with disabilities who fit the legislation’s new income standards.

“I think [the bill] is a good improvement,” Abeler said.

Related legislation is circulating in the House. Democratic Reps. Lucy Rehm, Andy Smith and Peter Fischer’s bill also would change the rebate program to a lottery and require a report. GOP Rep. Mike Wiener has introduced a bill that would repeal the rebate program.