After weak bank response to pilot scheme, govt launches second phase of PAVE programme for subsidised e-bikes, rickshaws

• In the second phase, government targets distribution of 76,000 electric bikes and 2,170 rickshaws with Rs80,000 subsidy per bike under revised scheme

On Tuesday, the Economic Coordination Committee (ECC) of the Cabinet approved the second phase of Pakistan Accelerated Vehicle Electrification (PAVE) Programme under National Electric Vehicle Policy 2025-30 after weak bank participation slowed implementation of the programme’s first phase.

The programme aims to promote electric mobility through subsidised distribution of electric bikes, loaders and rickshaws as part of the government’s efforts to reduce fuel consumption and encourage cleaner transport. The programme is partly financed through a Rs2.5 climate support levy imposed on every litre of petrol and diesel consumed in the country.

Officials informed the ECC that despite a target of 41,000 vehicles under the pilot phase, only 5,409 electric bikes and e-rickshaws have so far been distributed.

Out of 44,689 applications forwarded to banks, only 9,889, or 22%, were processed, while approvals were granted in just 4,075 cases, representing around 9% of total applications received. Banks provided financing worth only Rs143 million for the approved cases.

In comparison, among 1,339 applicants who opted for self-financing, 1,334 received electric bikes and 1,033 applicants received cost-sharing subsidies in their bank accounts.

Officials said the approved and distributed vehicles currently account for only around 4.5% of the overall fiscal year target ending June 30, raising concerns that the government may miss its annual target of distributing 116,000 electric bikes.

PAVE-2

Officials said the weak response from banks forced the government to introduce major changes in the second phase of the programme, which targets distribution of 76,000 subsidised electric bikes and 2,170 electric rickshaws and loaders.

Under the revised framework, vehicle allocation will now take place on a first-come, first-served basis to improve transparency and speed up delivery of subsidised vehicles.

To reduce reliance on banks, the government plans to expand the self-financing model. Under the revised mechanism, applicants will be able to obtain electric vehicles from suppliers after paying the notified price minus the applicable subsidy, eliminating the need for full upfront payments.

The ECC also approved a self-financing scheme for federal government employees in Basic Scale 16 and below working in ministries, attached departments and subordinate offices.

Under the scheme, manufacturers will deliver electric bikes against an upfront payment of Rs10,000, while electric rickshaws and loaders will require an initial payment of Rs100,000.

Officials said manufacturers would not charge interest or additional costs, while Engineering Development Board will transfer the approved subsidy within five working days. The remaining cost of the vehicle will be recovered through instalments paid by government employees.

Officials said the total target for the current fiscal year is 119,170 vehicles, including 116,000 electric bikes and 3,170 electric rickshaws and loaders.

The government has approved a fixed subsidy of Rs80,000 for each electric bike under the programme. Subsidy payments will not be made directly to buyers and will instead be transferred to pre-qualified manufacturers after verification of vehicle delivery and registration.

According to officials, distribution will take place through 200 batches of 500 units each to improve monitoring and accountability.

Officials also informed the ECC that delays in hiring a third-party verification firm during the first phase had affected public confidence in the programme and slowed implementation.

Under the revised second phase, around 600 electric bikes will be distributed to top-performing government college students who secured first, second and third positions in the 2025 Higher Secondary School Certificate examinations conducted by 26 Boards of Intermediate and Secondary Education across the country.

The scheme will cover students from pre-medical, pre-engineering, general science and humanities groups.

The ECC was further informed that, in view of recent geopolitical developments and growing energy security concerns, the government has proposed an additional fast-track electric bike scheme under the PAVE programme.

Under this component, 100,000 electric bikes will be rolled out within three months using 130,000 completely knocked down kits already available in Pakistan or currently in transit.

Officials said this target would be in addition to the existing annual target of 116,000 electric bikes.

Manufacturers will receive a subsidy of Rs80,000 per bike from a Rs9 billion allocation through a verification-based mechanism linked to proof of delivery and registration.

According to estimates shared with the ECC, the scheme is expected to save around 8.6 million litres of petrol, equivalent to nearly $8 million, within three months and about $222 million over the next five years.