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ISLAMABAD: The federal government is all set to launch a new five-year Electric Vehicle (EV) policy on August 14, aiming to aggressively promote electric bikes and rickshaws across Pakistan. The policy, developed in consultation with the International Monetary Fund (IMF), marks a renewed commitment to sustainable and energy-efficient transportation.
Sources within the Ministry of Industries and Production confirmed that the IMF has backed the policy by allocating Rs9 billion out of a total Rs100 billion subsidy package for the current fiscal year. The funds are meant to encourage the adoption of two- and three-wheeler electric vehicles, which form the backbone of daily urban mobility in Pakistan.
Electric Bikes and Rickshaws Get Priority
Under the new policy, 116,000 electric bikes will be distributed over the next two years, starting from the policy’s implementation phase. Each electric bike and rickshaw will receive a direct subsidy of around Rs50,000, significantly reducing the purchase cost for consumers and making the vehicles more accessible to the general public.
This focus on electric two- and three-wheelers reflects the government’s recognition of their widespread use in cities and rural areas alike. These vehicles contribute heavily to air and noise pollution, and their conversion to electric alternatives is seen as a critical step in tackling environmental degradation and energy inefficiency.
Previous EV Policy Fell Short of Ambitions
The upcoming policy seeks to address major shortcomings of the previous EV policy that was introduced several years ago. Despite high ambitions, the earlier plan fell significantly short of its targets.
Out of a target of 500,000 electric two- and three-wheelers, only about 50,000 made it into the market. Similarly, only 200 electric buses were deployed against a goal of 1,000. The adoption of electric four-wheelers and trucks also lagged, with just 3,000 and 1,000 vehicles, respectively, introduced compared to the target of 100,000 units.
Officials cited lack of infrastructure, inconsistent policy incentives, and weak market readiness as the primary reasons for the underperformance. This time, however, the government, with IMF guidance, aims to implement a structured subsidy and policy framework to avoid similar pitfalls.
Long-Term Financial Commitment Secured
The new EV policy is not just a short-term initiative. It will remain in effect until 2030 and includes a series of staggered financial commitments to ensure continuity. According to official projections, the following subsidy allocations have been proposed for future fiscal years:
- FY2027: Rs19 billion
- FY2028: Rs24.16 billion
- FY2029: Rs26.62 billion
- FY2030: Rs22.64 billion
This phased approach allows for gradual scaling of production, distribution, and infrastructure development, especially charging stations and local assembly units.
PM Shehbaz Sharif to Announce Policy on Independence Day
The formal announcement of the new EV policy will be made by Prime Minister Shehbaz Sharif during the Independence Day celebrations on August 14. The launch event is expected to highlight the government’s commitment to climate action, economic modernization, and reducing Pakistan’s reliance on imported fossil fuels.
Haval H6 PHEV Launching in Pakistan on August 12
Officials believe this policy could also help reduce the country’s oil import bill, create green jobs, and position Pakistan as a regional player in electric mobility, especially in affordable transport segments like bikes and rickshaws.
Industry Response and Challenges Ahead
While the announcement has been largely welcomed by environmentalists and industry stakeholders, questions remain about implementation capacity, especially at the provincial and municipal levels. Manufacturers have shown interest in scaling up local production, but seek clarity on long-term tax incentives, import duties on EV parts, and battery recycling guidelines.
Transport sector experts have also urged the government to simultaneously invest in public awareness campaigns, financing options, and regulatory mechanisms to ensure safety standards are met.
Conclusion
The new EV policy, backed by the IMF and set for launch on August 14, could mark a turning point for Pakistan’s transport sector. By focusing on electric bikes and rickshaws, the government is targeting the most commonly used vehicles to make the biggest environmental impact. However, much will depend on transparent implementation, industry cooperation, and consistent policy support over the next five years.
