ISLAMABAD: The Economic Coordination Committee (ECC) has approved Electric Vehicle (EV) Policy and free distribution of E-bikes in top position holder students.
Sharing the details, in a meeting held on 13th September 2024, the Prime Minister was pleased to establish a Steering Committee, led by Federal Minister for Industries and Production, to develop a policy for the promotion of electric vehicles in Pakistan and inter alia directed that this Division, State Bank of Pakistan (SBP) and commercial banks may prepare a financing facility for incentivizing local demand of electric vehicles (Annex-I). Accordingly, draft New Energy Vehicles Policy, 2025-30 was prepared and presented to the Prime Minister in a meeting held on 14-06-2025. It will now be submitted before the Federal Cabinet for approval after a round of consultations in light of the directions of the Prime Minister. Further, in this meeting, Prime Minister also direct that necessary approvals for financing scheme may be obtained from ECC and Federal Cabinet.
Adoption of electric vehicles is important for Pakistan for environmental reasons as well as for lowering oil import bill and to create opportunity for productive use of available excess power.
The policy ibid aims at raising the number of electric vehicles to 30% of new sales of vehicles by 2030 in line with Pakistan’s NDCs under the Paris Agreement. The major barrier in adoption of electric vehicles is higher upfront acquisition cost as compared to internal combustion engine vehicles.
Therefore, worldwide, electric vehicles are subsidized, at least during initial stages of adoption. In the same spirit, the policy also envisages a subsidy scheme focused primarily on electric two and three wheelers which will be implemented during the next five years at a cost of around Rs. 100 billion. This scheme will be revenue neutral and requisite funds will be collected through New Energy Vehicles Adoption Levy imposed on internal combustion engine vehicles in accordance with their engine capacity. It is expected that the proposed levy will generate a revenue of Rs. 122 billion over the next five years. A New Energy Vehicle (NEV) Adoption Levy Act, 2025 to provide statutory basis for the collection of levy was approved as part of the Finance Act, 2025 . The policy and revenue neutral subsidy scheme is part of US$ 1.4 billion Resilience and Sustainability Facility (RSF) agreed with the IMF .
During fifth meeting of the Steering Committee held on 25th June, 2025, it was decided that the subsidy will be used for supply of electric bikes and Rikshaws /loaders to all citizens of Pakistan including Azad Jammu Kashmir (AJK) and Gilgit Baltistan (GB). In addition, potential beneficiaries will also be given an option to pay full price of electric bikes or rickshaws/loaders themselves and claim subsidy comprising of a portion of equity and interest payment as per terms of the scheme after registration and third-party verification. The Steering Committee also decided that in order to show case the need for adoption of electric vehicles and recognize their academic achievement, 131 students showing highest performance in the Higher Secondary School Certificate (HSSC) examination, 2024-
25 conducted by the Federal Board of Intermediate & Secondary Education (FBISE) shall be provided electric bikes free of any charge. The Steering Committee also considered a draft term sheet prepared in consultation with the Pakistan Banks Association (PBA) and recommended that it shall be submitted for seeking approval from ECC of the Federal Cabinet.
An allocation of Rs. 9 billion is available in the budget for the FY 2025-26 to subsidize electric vehicles . This will be sufficient to subsidize around 116,000 electric bikes and 3,170 electric Rikshaws/loaders. In order to allow refinement through experience, scheme will be rolled out in two phases, in the first phase, 40,000 electric bikes and 1,000 electric Rikshaws/loaders will be offered while remaining 76,000 electric bikes and 2,170 Rikshaws/loaders will be offered in the second phase.
In a meeting held on July 18, 2025, the Prime Minister was pleased to pass directions for improvement of the scheme (Annex-VIII). As per the term sheet recommended by the Steering Committee and directions of the Prime Minister, the basic structure of the subsidized financing scheme is as follows ;(i) available financing options will include Islamic financing options as well; (ii) maximum loan size covered under the scheme shall be Rs. 200,000/- in case of an electric bike and Rs. 880,000/- in case of an electric Rikshaw/loader; (iii) allowed markup rate shall be 6 months KIBOR+2.75% with a maximum tenor of two years for electric bikes and three years for electric Rikshaws/loaders;(iv) Government of Pakistan will provide 20% portfolio guarantee on first loss basis; (v) the debit to equity ratio shall be 80:20, Government of Pakistan will provide a maximum of Rs. 50,000/- and Rs. 200,000/- as its share in equity in respect of an electric bike and Rickshaw/loader respectively and also bear the entire cost of
markup bringing borrower’s markup to zero; (v) all citizens of Pakistan including Gilgit Baltistan and Azad Jammu & Kashmir (AJK) will be eligible to apply subject to age restriction given below; (vi) for accessing subsidy for an electric bike, a citizen shall be of an age of 18 to 65 years and in case of an electric Rikshaw/loader of an age of 21 to 65 years; (vii) province wise quota of electric bikes and electric Rikshaws/loaders shall be in accordance with their population as per 2023 census; however, 10% quota shall be reserved for Balochistan by reducing quotas of Sindh and Punjab ;(viii) in case of electric bikes, minimum 25% quota shall be reserved for women while maximum 10% will be reserved for persons using electric bikes for commercial purposes such as courier or delivery services; (ix) in case of electric Rikshaws/loaders, first priority will be given to individuals, any leftover quota will be allocated to fleet operators to a maximum extent of 30%;(x) exact eligibility criteria for the persons using electric bikes for commercial purposes and fleet operators of electric Rikshaws/loaders will be determined by the
Steering Committee; (xi) all citizens will be allowed to obtain only one electric bike or Rikshaw/loader under this scheme while the number of electric rickshaws allowed to a fleet operator will
be decided by the Steering Committee;(xii) applications for participation in the scheme will be invited through advertisement, and in case the applications received exceed the quota of a province or a particular segment, selection will be made through electronic balloting; (xiii) the scheme will be delivered through an end-to-end digitalized platform which will be used for inviting applications, balloting and tracking progress;(xiv) only those manufacturers/assemblers that are shortlisted by the Engineering Development Board (EDB) on the basis of their technical capacity, financial strength and capability to provide after sale service in accordance with criteria approved by the Steering Committee will be eligible to participate in the scheme;(xv) there is a range of electric vehicles available in the market, EDB will also shortlist electric bikes and Rikshaws/loaders that will be offered by shortlisted
manufacturers/assemblers in accordance with quality, performance and safety criteria approved by the Steering Committee; (xvi) successful candidates will be free to choose from a range of shortlisted electric bikes and Rikshaws/loaders, this will promote competition and best value for money for them; (xvii) to ensure transparency, third party audit of the scheme will be carried out – this shall be in addition to the regular audit through the Auditor General of Pakistan; (xviii) the shortlisting of manufacturers/assemblers by EDB as well as quality check of products supplied under the scheme will be subject to third party validation, procedure for quality check will be developed by the Steering Committee; and (xix) Electric bikes and rickshaws supplied under the scheme will carry appropriate
branding as approved by the Steering Committee.
Minor adjustments to the scheme, such as changes in number of electric bikes and Rikshaws /loaders or quota readjustments in case a particular quota remains unutilized, may be made by the Steering Committee during its implementation while remaining within the allocated funds.
In the meeting, Prime Minister was also pleased to direct increase in number of students receiving free e-bikes from 131 to a minimum of 200. These free electric bikes will be distributed among students of government colleges only affiliated with twenty-six BISES across Pakistan securing highest and second highest marks in HSSC examination 2024 in each of the four academic disciplines viz. pre-medical, pre-engineering, general science/ICS and humanities. As per the list provided by Inter Boards Coordination Commission (IBCC), Ministry of Federal Education & Professional Training this number comes to 217 as certain positions are shared by more than one student. Since, this list does not have their representation, two students scoring highest marks from GB have also been selected. This brings the total number to 219 students.
Other main highlights of this scheme are as follows: (i) the maximum price of the electric bike shall be Rs. 2,50,000/-;( ii) only those manufacturers and electric bikes that meet minimum financial, quality, performance and safety criteria approved by the Steering Committee shall be eligible to participate in the scheme; and (iii) Electric bikes will be purchased by EDB through open competitive process under PPRA subject to above conditions for supply to students.
The subsidy will also be available to any citizen who intends to acquire an electric bikes or rickshaws/loaders by paying its full price himself. In this case, subsidy equivalent to equity and interest payment as would have been available under the approved term sheet will be reimbursed through a designated account after registration of the vehicle and third-party verification.
Further, the scheme will be rolled out by the EDB. This will require an estimated cost of Rs. 45 million on account of advertisement, running of media and awareness campaign, bearing the cost of third-party audits, development of digital platform, obtaining verification from NADRA etc. and meeting other contingent expenses..
In view of the foregoing, ECC will approve rolling out of subsidy scheme for adoption of electric bikes and Rikshaws/loaders, provision of free electric bikes to top performing students and self-financing scheme and permission to EDB for using Rs. 45 million for meeting administrative cost out of the
indicative allocation of Rs. 9 billion for subsidizing adoption of electric vehicles. Ends
