Govt Plans Subsidy up to Rs 0.2M on electric wheelers

Staff Report:

The government plans a subsidy of Rs 50000 for electric two wheelers and Rs 200000 for three wheelers.
Policy rate has been reduced from 22 to 15 percent.The scheme will be launched with 3 percent kibor.The instalment plan will cover for two years and consumers will pay Rs 9000 per month instalment.

Policy Highlights and Incentives

An allocation of Rs 4 billion has been made in the Federal Budget 2024-25 for the demand incentivization scheme for electric 2- and 3-wheelers.Car Sales Surge 27% MoM in October 2024

The financing scheme offers subsidies of PKR 50,000 for two-wheelers and PKR 200,000 for three-wheelers to lower upfront costs for consumers.

The government has reduced the policy rate from 22% to 15%. The scheme will be launched with a 3% KIBOR, which will be borne by the government. As a result, the consumer will only pay the installment over a span of two years, with a monthly payment of approximately Rs. 9,000, which will be even less than the savings from fuel consumption.

A Credit Loss Guarantee is also provided through the Finance Division and is not borne by the Ministry or the consumer.

With the reduction of the policy rate from 22% to 15%, the government aims to encourage banks to incentivize and facilitate consumer banking for those interested in switching to electric vehicles (EVs).

The government also plans to facilitate the establishment of EV infrastructure to address consumer anxiety. In the first phase, the government has prepared a plan to install EV stations along key locations.