By Pakistan’s electric bike manufacturers are calling on the federal government to reconsider its recent decision to raise the sales tax on electric two-wheelers from 1% to 18%. Industry representatives raised their concerns during a meeting with Haroon Akhtar Khan, Special Assistant to the Prime Minister on Industries and Production, cautioning that the hike could significantly slow down the country’s transition toward environmentally friendly transport.
According to manufacturers, the sharp increase in sales tax will directly translate into higher retail prices. This, they argue, may push electric bikes out of reach for middle- and low-income consumers—the core market segment driving mass adoption. Over the past few years, government incentives, lower operating costs, and rising fuel prices had helped EV bikes gain momentum as a practical and cleaner alternative to petrol motorcycles.
Industry Concerns Over Policy Reversal
Manufacturers stressed that the policy shift contradicts Pakistan’s broader goals, including:
- Reducing carbon emissions
- Lowering dependence on imported fuel
- Encouraging domestic production and industrial growth
They noted that earlier incentives had encouraged investment in local assembly units, parts manufacturing, and supply chains. However, the sudden tax hike has introduced uncertainty, causing companies to hesitate on expansion plans.
Stakeholders urged the government to adopt a consistent, long-term EV policy so investors and manufacturers can plan with confidence.
Government Response: Support Promised but Details Pending
During the discussion, Haroon Akhtar Khan reaffirmed the government’s willingness to support EV adoption. He directed the Engineering Development Board (EDB) to review the situation and propose measures to minimize the impact on consumers and manufacturers. However, no specific relief mechanism has been announced yet.
The pushback comes as Pakistan prepares for the second phase of its national EV policy, which focuses on boosting local manufacturing and reducing environmental impact. Industry leaders say that stability is essential to sustaining growth and realizing Pakistan’s clean mobility goals.
The future of Pakistan’s electric bike sector now hinges on the government’s next steps. A balanced approach—supporting affordability, encouraging local production, and protecting sustainability gains—will be crucial in ensuring that EV adoption continues to grow rather than stall.
Disclaimer:
The information in this article is based on current industry discussions and government statements. Final policy decisions may change as consultations continue.
