Electric Bike Prices in Pakistan May Rise Sharply Amid Policy Shift

Government Rejects EDB Proposal on Tax Exemptions

Electric bike prices in Pakistan are expected to rise significantly after the federal government rejected the Engineering Development Board’s (EDB) proposal for continued tax exemptions on imported EV components. This decision is likely to make electric bikes much costlier in the coming months, industry insiders warned.

Import Duties on EV Parts to Jump from 1% to 35%

Under the previous policy, electric vehicle manufacturers benefited from just a 1% customs duty on essential parts such as batteries, motors, chargers, and converters. With the government’s refusal to extend these concessions, the duty rate could now surge to 30–35%, substantially increasing production costs.

Policy Shift Stems from Miscommunication

According to sources, Prime Minister Shehbaz Sharif was initially presented with inaccurate data regarding the EV bike scheme. Introduced in July 2020, the initiative aimed to promote affordable electric mobility through tax incentives. However, the withdrawal of concessions has now dealt a major blow to the industry’s momentum.

Impact on the Auto Industry Development Policy 2021–26

Officials explained that under the Auto Industry Development Policy (AIDP) 2021–26, stakeholders were required to apply for extensions of tax incentives before the federal budget announcement. Failure to secure government approval has now left the sector bracing for price hikes and reduced competitiveness.

Governance Crisis at the Engineering Development Board

The EDB itself is facing a governance crisis that has weakened its influence in policymaking. The board has been operating without a permanent CEO for over 14 months, with Khuda Bakhsh Ali continuing as acting CEO far beyond the legal two-month limit. Additionally, the EDB has lacked a formal board since the resignation of its chairman more than a year ago.

Motor Vehicle Industry Act Drafted Without Approval

Sources also revealed that the Motor Vehicle Industry Act was drafted without the EDB’s formal approval, highlighting the institution’s declining role in shaping auto sector policies. The lack of strong leadership is seen as a key reason why the electric bike industry’s concerns failed to gain traction with policymakers.

Key Takeaways

• Electric bike prices in Pakistan set to rise sharply due to higher import duties.
• Customs duty on EV parts may increase from 1% to 35%, raising production costs.
• Government rejects EDB request for tax exemptions on electric bike components.
• Auto Industry Development Policy 2021–26 concessions withdrawn due to missed extension.
• EDB faces governance issues, including no permanent CEO for 14 months.
• Weakened policymaking role as Motor Vehicle Industry Act drafted without board approval.

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