Govt Approves New Subsidy Plan Under EV Policy

A Rs. 9.0 billion package was approved for FY2025–26 by the Economic Coordination Committee of the federal cabinet today.

The scheme operates on a revenue-neutral model funded through the NEV Adoption Levy Act 2025.

For the current fiscal year, the overall target is 119,170 vehicles, including 116,000 electric bikes and 3,170 rickshaws and loaders. After completing a first pilot phase of 41,000 vehicles, the revised second phase now targets 76,000 electric bikes and 2,170 rickshaws and loaders.

The ECC is expected to approve an additional fast-track rollout of 100,000 electric bikes within three months. The programme will use around 130,000 CKD kits available domestically and in transit. A fixed subsidy of Rs. 80,000 per electric bike will be paid directly to pre-qualified OEMs, with distribution structured in 200 batches of 500 units each.

Officials estimate this rollout will save approximately 8.6 million litres of petrol in the short term, valued at around USD 8 million, with projected savings reaching USD 222 million over five years.

Alongside this, the government will distribute 600 free electric bikes to top-performing students who secured first, second, and third positions in the 2025 HSSC examinations across all 26 Boards of Intermediate and Secondary Education. The initiative is estimated to cost around Rs. 150 million, based on an average unit cost of Rs. 250,000 per bike.

To improve efficiency and reduce delays seen in the first phase, the steering committee has recommended replacing the balloting system with a first-come, first-served mechanism, prioritising Phase 1 waitlisted applicants based on precise application timestamps.

The subsidy process has also been revised. Instead of upfront full payment, buyers will now pay the net price after subsidy deduction, while the Engineering Development Board (EDB) will transfer subsidies directly to OEMs via the State Bank of Pakistan upon verification of delivery and registration.

A revised self-finance scheme for federal employees in BS-16 and below has also been introduced, requiring minimal down payments of Rs. 10,000 for bikes and Rs. 100,000 for rickshaws, with the remaining amount recovered through interest-free payroll deductions over 6 to 18 months.

Program access will now include institutional financing, housing-linked public-private partnerships, overseas Pakistanis holding NICOP/POC, SECP-registered NBFCs, and fleet operators.

The mandatory 100% third-party verification system has been replaced with a risk-based verification model, using biometric checks, photographic evidence, and digital validation through the programme portal. The change follows concerns over high verification costs, previously estimated at over Rs. 500 million in Phase 1.

To support implementation, the EDB will establish a dedicated 14-member unit with an annual cost of Rs. 32.76 million, along with Rs. 37 million allocated for operational expenses in FY2025–26.

Phase 1 received 269,149 applications, with strong demand despite limited banking approvals. However, the self-finance segment achieved a 99.6 percent delivery success rate.