IMF approves Rs 100bn to promote EVs in Pakistan

• The Prime Minister Shahbaz Sharif will announce implementation of the new electric vehicles policy on August 14 this year.
• On the same day, the Prime Minister Shahbaz Sharif will start distribution of electric bikes.

The International Monetary Fund (IMF) has approved a subsidy of Rs 100 billion to promote electric vehicles (EVs) in Pakistan. The Prime Minister Shahbaz Sharif will announce implementation of the new electric vehicles policy on August 14 this year.

On the same day, the Prime Minister Shahbaz Sharif will start distribution of electric bikes.

According to official documents, the federal government has allocated a subsidy of Rs 9 billion for the current fiscal year as part of the first phase.

Sources in the Ministry of Industries and Production said that under this policy 116,000 electric bikes will be manufactured over the next two years. The government will provide a subsidy of approximately Rs 50,000 per electric bike and rickshaw, the sources said.

Under the previous electric vehicles policy, only 50,000 two and three-wheelers vehicles, 1,000 buses, 3,000 four-wheelers, and just 10 trucks were introduced to the market—far below the original targets of 500,000 two- and three-wheelers, 100,000 four-wheelers, and 1,000 trucks.

For the fiscal year 2027, the government will provide a subsidy of Rs 19 billion. In 2028, it will rise to Rs 24.16 billion, followed by Rs 26.62 billion in 2029, and Rs 26.64 billion in 2030.

The new electric vehicle policy, formulated in consultation with the IMF, is set to span five years and will remain in effect until 2030.

The sources claimed that the electric vehicles policy also includes the introduction of battery swapping systems, vehicle-to-grid (V2G) schemes, and mandatory integration of EV charging points in new building codes to facilitate wider adoption in urban areas.

To encourage local manufacturing, incentives are being provided to domestic producers. Currently, over 90 per cent of parts for two- and three-wheelers are already manufactured locally.

As per the details, the government will also introduce special support packages for small and medium enterprises (SMEs) to further boost localisation. The Automotive Industry Development and Export Plan (AIDEP) tariff facility would continue until 2026 and be phased out gradually by 2030.

The Special Assistant to the Prime Minister Haroon Akhtar had said that the NEV policy was developed through consultations with over 60 experts, institutions, and industry stakeholders, guided by a steering committee under the Ministry of Industries and Production since September 2024.

 

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