Cabinet is Against E-Bike Subsidies Due to Sustainability Concerns

Cabinet members have opposed subsidies on E-Bikes, citing concerns about rent-seeking and sustainability.

According to sources, the Industries and Production Division initially opposed the idea, but after consulting with industry representatives, decided it was the only way to start e-bike production.

A cabinet member noted that most fuel-based motorcycles are purchased in monthly installments through informal financing, which could be replicated for e-bikes since fuel savings would offset any increase in installments due to higher prices. Another cabinet member suggested using locally-made electric conversion kits.

The cabinet agreed to discuss financing models in the Economic Coordination Committee (ECC) before presenting them to the cabinet. The provision of lower-grade petrol for combustion-engine motorcycles could save 30% in monthly fuel costs.

The prime minister ordered the Petroleum Division to present a report on motorcycle and rickshaws’ lower-grade petrol consumption.

The Industries and Production Division gave a presentation on E-Bike normalization. The presentation highlighted  the following details:

• Pakistan produces over 6 million motorcycles annually from 90 companies.
• 26.3 million motorcycles and scooters in total are currently registered, and 2 million locally-made motorcycles are added annually.
• The government has imposed a 1% customs duty on parts and a 1% sales tax to encourage local electric two and three-wheeler manufacturing.
• 22 companies have received EV manufacturing licenses.
• 7,377 electric motorcycles were produced in 2021-22 and 5,985 in Jul-Nov FY23.
• Currently, 18,000 e-bikes are plying the roads.

While supporting electric two-wheelers, the cabinet ordered the sponsoring division to present the issue to the ECC for further consideration. The policy should include e-bike production and motorcycle conversion kits.