Federal Cabinet is Against E-Bike Subsidies
According to a cabinet member, most fuel-powered motorcycles are purchased in monthly installments through informal financing, which could be replicated for e-bikes because fuel savings would offset any increase in installments due to higher prices. Another cabinet member suggested using electric conversion kits made locally.
Why against E-Bikes?
Cabinet members have spoken out against E-Bike subsidies, citing concerns about rent-seeking and sustainability.
According to references, the Industries and Production Division was initially opposed to the idea, but after consulting with industry representatives, determined that it was the only way to begin e-bike production.
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Before presenting financing models to the cabinet, the cabinet agreed to discuss them in the Economic Coordination Committee (ECC). Lower-grade gasoline for combustion-engine motorcycles could save up to 30% on monthly fuel costs.
Low Grade Fuel for bikes?
The prime minister directed the Petroleum Division to submit a report on the lower-grade gasoline consumption of motorcycles and rickshaws.
The Industries and Production Division presented on E-Bike standardization. The following details were highlighted in the presentation:
Every year, 90 companies in Pakistan produce over 6 million motorcycles.
There are currently 26.3 million registered motorcycles and scooters, with an additional 2 million locally manufactured motorcycles added each year.
To encourage local electric two- and three-wheeler manufacturing, the government imposed a 1% customs duty on parts and a 1% sales tax.
EV manufacturing licenses have been granted to 22 companies.
In 2021-22, 7,377 electric motorcycles were produced, with 5,985 produced in July-November of FY23.
There are currently 18,000 e-bikes on the road.
The cabinet ordered the sponsoring division to present the matter to the ECC for additional consideration while still supporting electric two-wheelers. E-bike production and motorcycle conversion kits should be covered by the policy. Other than that, Govt should ask local manufacturers to improve fuel efficiency and technology of locally manufactured motorcycles.