The government has reportedly prepared three different financing plans to offer electric bikes to interested parties. These plans will be finalized following final approval from the Economic Coordination Committee (ECC) and Federal Cabinet.
The Ministry of Industries and Production has been instructed to finish the strategy for domestic e-bike manufacture at the latest by March 1, 2023, following a high-level meeting presided over by the Prime Minister.
The timescale for 100% E-Bike production and the delivery of ancillary services will be determined by M/o Industries & Production in cooperation with the Finance Division and the Revenue Division.
According to individuals who shared the information, the federal government has permitted the import of parts specifically for electric vehicles at a rate of 1% customs duty and 1% sales tax in order to facilitate the manufacturing of electric vehicles (EV) in the nation. The incentives were included in the Auto Industry Development and Export Policy’s Article 3.3 (AIDEP 2021-26).
In its 2019 EV Policy, the Ministry of Climate Change established a target for EV penetration of 50% of new two- and three-wheeler sales by 2030. The Prime Minister established a Committee to investigate the viability of E-Bikes and incentive structures to make E-Bikes cheap in addition to the aforementioned goals and the budgetary measures covering the supply side.
On the basis of the recommendations of the Committee, a comprehensive presentation on E-Bikes was made to the Federal Government on December 28, 2022. Following are the salient facts and figures of the presentation:
- (i) more than 26.3 million motorcycles are in the country
- (ii) annual market size of motorcycles is more than 2 million which are produced locally
- (iii) existing bikes on the road consume fuel of $ 3 billion annually
- (iv) EDB has issued twenty-two manufacturing licenses to manufacturers of E-Bikes
- (v) 7,377 units of electric motorcycles were manufactured in 2021-22
- (vi) The adoption of E-Vehicles is slow primarily due to the difference in the price between ICE and E-Bikes.
An E-Bike with a lithium battery and certain requirements typically cost Rs 170,000. Due to the high cost, EV uptake in the nation is gradual.
The MoI&P has proposed three funding schemes based on several factors in an effort to quickly and sustainably increase demand for e-bikes in the nation:
Scheme-l – Cash Purchase Model:
- The government sharing Rs 100,000 through banks as processing agents
- Consumer lump sum sharing Rs 70,000 from own sources.
Scheme-2 – Price Sharing Model:
- Rs 100,000 on sharing basis by the government
- Rs. 70,000 as a loan from banks (24 months)
- 50% Credit Guarantee by the government to the banks.
Scheme-3 – Easy Loan Model:
- 30% down payment by the consumer
- 36 months’ loan tenure
- 19% interest rate with the government picking up only 50% of the interest rate over a three-year leasing period, 50% Credit Guarantee by the government.
The three plans have various financial requirements and need funding from either the government or private banks. The government exchequer will save $98 million over the next two years thanks to the proposal to encourage the purchase of 175,000 E-Bikes through Scheme-I, or the Cash Purchase Model, which may be treated as a preferred alternative.
The Benazir Income Support Program (BISP) participants, residents of flood-affected areas, low-wage public and private employees, retired members of the armed forces, and civil servants, among others, are among the beneficiaries of the proposed plan. Additionally, it is suggested that funds previously allotted for BISP programs be used to support the low-income group of society logistically through the E-Bike program.
