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ISLAMABAD: The government has reportedly prepared three different financing structures to provide E-Bikes to interested persons, to be finalized after final approval of Economic Coordination Committee (ECC) and Federal Cabinet, well informed sources told Business Recorder.

A high level meeting presided over by Prime Minister has directed Ministry of Industries and Production to finalize the policy for local manufacturing of E-Bikes latest by March 1, 2023.

M/o Industries & Production shall in consultation with Finance Division and Revenue Division decide the timeline for 100% production of E-Bikes and provision of allied services.

Sharing the details, sources said, to facilitate the manufacturing of Electric Vehicles (EV) in the country, the Federal Government has allowed the import of Electric Vehicles’ specific parts at the rate of 1% Customs Duty and 1% Sales Tax. The incentives were incorporated in the clause 3.3 of Auto Industry Development and Export Policy (AIDEP 2021-26).

Promotion of electric bikes: PD for formation of inter-ministerial task force to devise mechanism

Ministry of Climate Change, in its EV Policy 2019, has set the EV penetration target of 50% of new sales of two and three wheelers EVs by 2030. To complement the above objectives and the fiscal measures covering the supply side, the Prime Minister constituted a Committee to explore the viability of E-Bikes and incentive structure to make E-Bikes affordable.

On the basis of 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 licences to manufacturers of E-Bikes; (v) 7,377 units of electric motorcycles were manufactured in 2021-22; and (vi) The adoption of E-Vehicles is slow primarily due to difference in price of ICE and E-Bikes.

The average cost of E-Bike with lithium battery and specific standards is Rs 170,000. The high price renders EV penetration in the country slow.

In order to create quick and sustainable demand of E-Bikes in the country, the MoI&P has proposed three financing schemes based on different criteria: Scheme-l - Cash Purchase Model: (i) Government sharing Rs 100,000 through banks as processing agents; and (ii) consumer lump sum sharing Rs 70,000 from own sources.

Scheme-2 - Price Sharing Model: (i) Rs 100,000 on sharing basis by government; (ii) Rs. 70,000 as loan from banks (24 months); and (iii) 50% Credit Guarantee by government to the banks.

Scheme-3 - Easy Loan Model: (i) 30% down payment by consumer;(ii) 36 months’ loan tenure;(iii) 19% interest rate with the government picking up only 50% of the interest rate over a three year leasing period, 50% Credit Guarantee by government.

The three schemes are different in terms of financial requirements and require financing either from the government or the commercial banks. The proposal to incentivize 175,000 E-Bikes through Scheme-I, i.e., Cash Purchase Model, which may be treated as a preferred option will help government exchequer save $98 million during the next two years.

The beneficiaries of the proposed scheme have been identified which inter alia include persons enrolled with Benazir Income Support Programme (BISP), residents of flood affected areas, low income government and private employees, government and civil/ armed forces pensioners, etc. It is also proposed that funds already allocated under schemes of BISP may be utilized to provide logistic support to the low income segment of society through the E-Bike scheme.

Copyright Business Recorder, 2023

Comments

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Rebirth Jan 17, 2023 08:01am
That specific segment can’t charge them. They can barely charge their phones. HEVs is the answer.
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Abdullah Jan 17, 2023 11:17am
What haopens when it goes into water.Karachi is half of year undee water only.
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Rana Altaf Jan 17, 2023 12:42pm
Fact Sheet. The Financial Model One and two parallel should be Introduced. Secondly Introduced electric bicycle should also be introduced by fully funded for extra poor. This is very important to add electric bicycle. This will massively impact because it's cost will be very less. But it also works for Labor class very effectively. Rana Amir +61490867813
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Yusuf agha Jan 18, 2023 01:20am
Excellent initiative by the pdm government We are step by step reducing our fuel consumption ie fuel import bill.and moving towards a surplus balance of payment profile fr pakistan
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umair Jan 18, 2023 11:24am
useless expenditure by a broke government to try and get some votes this year. similar to the ev buses scheme launched recently. electric transport should not be the priority right now. reducing expenses, plugging leakages and corruption in the system, and focusing on exports to earn money should be the priorities.
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Kaashif Jan 18, 2023 03:15pm
@Yusuf agha, the PSM government had renaged on a number of eco friendly/ green initiatives, and made it more difficult to import 100% electric vehicle cars from companies like BYD, which would have saved us billions in dollars. They also subsidized the import of cooking oil which is currently costing almost 4 billion dollars a year, for cooking samosas, pakoras, jalebiya etc which is a total waste, just for the vote bank. Ishaq Dar is openly belligerent to the IMF (our last chance), has been again trying to rig the dollar rate for votes, and has broken all the agreements made by Miftah Ismail with the IMF. If the PDM carries on like this Pakistan will default on it's debts sooner or later.
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AMJED ALI Jan 18, 2023 06:56pm
May I have an E bike ...? in this over numbered population ....hehehehe...in the said scheme only party members might be facilitated........
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Nasir Aleem Jan 19, 2023 03:28pm
If this possible? if possible that govt will achieve target very soon(only 1 year)
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