Everything You Need to Know About Pakistan’s Electric Bikes Subsidy Scheme

The Economic Coordination Committee (ECC) of the Cabinet has formally approved a summary from the Ministry of Industries and Production for the launch of a wide-scale subsidy program aimed at encouraging the use of electric bikes and rickshaws across Pakistan.

This decision aligns with the government’s broader environmental and energy conservation objectives, and ProPakistani has obtained exclusive insights into how the subsidy will be implemented.

Rs. 9 Billion Budget Earmarked for EV Subsidy in FY26

A total of Rs. 9 billion has been allocated under the federal budget for the fiscal year 2025-26 to subsidize electric vehicles (EVs), specifically targeting the widespread adoption of electric bikes and electric rikshaws/loaders. The available budget is expected to cover subsidies for approximately 116,000 electric bikes and 3,170 electric rikshaws or loaders.

Two-Phase Rollout Strategy

The implementation of the scheme will follow a two-phased rollout model designed to allow adjustments based on real-time learning and feedback:

• Phase 1: 40,000 electric bikes and 1,000 electric rikshaws/loaders will be offered.
• Phase 2: The remaining 76,000 electric bikes and 2,170 rikshaws/loaders will be distributed.

Key Features of the Financing Structure

The government has outlined a structured subsidized financing mechanism, which includes:

• Financing Types: Both conventional and Islamic financing options will be available.
• Loan Limits: Up to Rs. 200,000 for electric bikes and Rs. 880,000 for rikshaws/loaders.
• Markup Rate: 6-month KIBOR + 2.75%.
• Loan Tenure: Up to 2 years for electric bikes and 3 years for rikshaws/loaders.
• Markup Subsidy: The government will bear the full cost of markup, effectively bringing the borrower’s markup rate to zero.

Additionally, the government will offer a 20% portfolio guarantee on a first-loss basis and contribute toward equity as follows:

• Electric Bike: Up to Rs. 50,000 equity support.
• Electric Rikshaw/Loader: Up to Rs. 200,000 equity support.

Eligibility Criteria for Citizens

All Pakistani citizens, including residents of Gilgit-Baltistan and Azad Jammu & Kashmir (AJK), will be eligible to apply, subject to age requirements:

• Electric Bikes: 18 to 65 years
• Electric Rikshaws/Loaders: 21 to 65 years

Each applicant may apply for only one vehicle under this scheme.

Regional and Demographic Quotas

The allocation of vehicles will be based on provincial population data from the 2023 census, with some targeted adjustments:

• 10% quota reserved for Balochistan, with proportional reductions in quotas for Sindh and Punjab.
• Electric Bikes: Minimum 25% of the quota reserved for women; maximum 10% allocated for commercial users (e.g., delivery riders).
• Electric Rikshaws/Loaders: Individual applicants prioritized. Any leftover quota (up to 30%) may be allocated to fleet operators.

Eligibility criteria for commercial users and fleet operators will be finalized by the Steering Committee overseeing the scheme.

Transparent Selection Process via Digital Platform

Applications will be invited through a public advertisement campaign. If the number of applicants exceeds the available quota for a particular region or segment, electronic balloting will determine the successful candidates.

A fully digital platform will handle:

• Application submissions
• Balloting processes
• Real-time tracking of implementation progress

Manufacturer and Product Selection by EDB

The Engineering Development Board (EDB) will be responsible for shortlisting eligible manufacturers and products based on:

• Technical capacity
• Financial strength
• Capability to provide after-sale service
• Product quality, safety, and performance

Only shortlisted manufacturers/assemblers will be eligible to supply products under the scheme. A range of approved electric bikes and rikshaws/loaders will be made available to successful applicants to encourage consumer choice and healthy market competition.

Monitoring, Audits, and Quality Control

To ensure the scheme’s transparency and efficiency:

• A third-party audit will be conducted in addition to routine oversight by the Auditor General of Pakistan.
• The shortlisting process and product quality checks will undergo third-party validation.
• The Steering Committee will develop procedures for quality checks and branding of vehicles supplied through the scheme.

Adjustments During Implementation

Minor adjustments to quotas or vehicle counts may be introduced by the Steering Committee during rollout to ensure full utilization of funds, without exceeding the allocated budget.