Renewable energy sector seeks tax cuts on lithium battery cells to support local manufacturing

Pakistan Renewable Energy Development Forum (PREDF) has urged the Engineering Development Board (EDB) to reduce taxes and duties on lithium battery cells to support local manufacturing and accelerate the adoption of renewable energy technologies.

In a letter addressed to the EDB, the PREDF chairperson said lithium battery cells currently face taxes and duties of up to 50%, discouraging local assembly and manufacturing.

He said the government should encourage import substitution by providing a level playing field and an enabling environment for investors interested in assembling and manufacturing lithium batteries in Pakistan.

According to the letter, high taxes have increased battery prices in the domestic market, slowing the transition toward renewable and environmentally friendly energy sources as alternatives to conventional electricity.

The forum recommended greater use of solar and wind energy across households, commercial establishments and the transport sector to reduce reliance on imported petroleum products and LNG.

The PREDF chairperson said wider use of lithium batteries could help reduce dependence on petroleum products in two-wheel and four-wheel vehicles, lower the import bill and support local manufacturing and technology transfer.

The letter stated that Pakistan imported around 26,000MW of solar panels between 2022 and 2024, all of which require battery storage systems. It added that lithium-ion battery imports reached 1.25 GWh in 2024 and were projected to increase to between 2.5 GWh and 3 GWh in 2025.

The forum also urged the government to rationalise taxes and attract investment into the local battery manufacturing market, adding that affordable lithium batteries could help reduce energy-driven inflation and support further investment in renewable energy infrastructure.