If you want to switch from a petrol-powered motorcycle to an electric bike but haven’t been able to due to high prices and the lack of charging stations, there’s good news for you.
Haroon Akhtar, the Prime Minister’s Special Assistant for Industries and Production has announced government’s new National Electric Vehicle Policy.
Under the government’s new National Electric Vehicle Policy, buyers of electric bikes and scooters will receive a subsidy of Rs. 50,000 and interest-free loans from banks.
He further stated that Prime Minister Shehbaz Sharif has already given principled approval for the policy. It is expected to be approved by the cabinet within a month.
Why was a subsidy for electric bikes and scooters needed?
In Pakistan, electric bikes (EVs) are up to 100% more expensive than petrol-powered bikes. To address this price gap, the government has decided on a cost-sharing subsidy.
A petrol bike costs around Rs. 150,000. An electric bike costs around Rs. 250,000, with just the battery costing nearly Rs. 100,000.
With the subsidy, buyers will only have to make a 20% down payment, out of which Rs. 50,000 will be paid by the government. The remaining 80% will be paid in installments over two years.
The Special Assistant also revealed that over the next five years, more than 2.2 million electric bikes will be subsidized. The government will spend over Rs. 100 billion on this initiative.
In Pakistan’s 2025–26 budget, Rs. 9 billion has been allocated for the electric vehicle scheme, which will enable the delivery of 116,053 electric bikes.
What’s the solution to the lack of charging stations?
Under the National Electric Vehicle Policy, Rs. 20 billion has been allocated to subsidize the installation of charging stations.
Currently, due to the low number of electric vehicles, petrol pump owners are not willing to invest in charging infrastructure. And in turn, consumers are hesitant to buy EVs due to the lack of charging stations.
To break this cycle, the government has decided to subsidize charging stations as well. The goal is to have a charging station every 50 kilometers.
What is the government’s vision?
The government aims for 30% of all vehicles in Pakistan to be electric by 2030. Achieving this without subsidies is not feasible.
To reduce the cost of electric bikes, subsidies are essential. Initially, the plan was to fund subsidies through the national budget. But since Pakistan is under the IMF program, the government has decided to impose a carbon levy to raise funds for the subsidies.
This subsidy program will gradually be phased out over five years, during which the goal is to mainstream this technology.
Market overview
Currently, at least 10 Chinese companies are assembling electric bikes and scooters in Pakistan, but their monthly sales do not exceed 50,000 units.
Atlas Honda announces entry into the EV market
In response to the National Electric Vehicle Policy, Atlas Honda, Pakistan’s largest motorcycle manufacturer, has also announced its entry into the electric vehicle space.
On June 24, the company announced its intention to launch an electric scooter during the current fiscal year. Atlas Honda dominates the Pakistani motorcycle market and has the capacity to produce 1.5 million units annually.
Although Honda is a Japanese company, most of the technology in electric vehicles comes from China, both globally and in Pakistan. Even the model introduced by Atlas Honda will be developed in partnership with Chinese manufacturers.