The federal government has approved the second phase of the Pakistan Accelerated Vehicle Electrification Program, known as PAVE, under the New Energy Vehicles Policy 2025 to 2030, with the Economic Coordination Committee of the federal cabinet approving a Rs9 billion package for the current fiscal year 2025 to 2026. The program operates on a revenue-neutral model funded through the New Energy Vehicles Adoption Levy Act 2025, and targets the distribution of electric bikes, rickshaws, and loaders on a first-come, first-served basis, replacing the balloting system that was used in the program’s first phase.
Following the completion of a pilot phase covering 41,000 vehicles, Phase Two targets an additional 76,000 electric bikes and 2,170 rickshaws and loaders, bringing the overall fiscal year target to 119,170 vehicles including 116,000 electric bikes and 3,170 rickshaws and loaders in total. A fixed subsidy of Rs80,000 per electric bike will be paid directly to pre-qualified original equipment manufacturers, with distribution structured in 200 batches of 500 units each using approximately 130,000 completely knocked down kits available domestically and in transit. The subsidy process has also been restructured: rather than upfront full payment by buyers, purchasers will now pay the net price after subsidy deduction at the point of purchase, while the Engineering Development Board will transfer subsidies directly to manufacturers via the State Bank of Pakistan upon verification of delivery and registration. The Economic Coordination Committee is additionally expected to approve a fast-track rollout of 100,000 further electric bikes within three months. Officials estimate the current rollout will save approximately 8.6 million litres of petrol in the short term, valued at around USD 8 million, with projected savings reaching USD 222 million over five years.
Several additional elements have been introduced alongside the core distribution program. The government will distribute 600 free electric bikes to top-performing students who secured first, second, and third positions in the 2025 Higher Secondary School Certificate examinations across all 26 Boards of Intermediate and Secondary Education, at an estimated cost of Rs150 million. A revised self-finance scheme for federal employees in Basic Scale 16 and below has been introduced, requiring minimal down payments of Rs10,000 for bikes and Rs100,000 for rickshaws, with the remaining balance recovered through interest-free payroll deductions over six to eighteen months. Program access has been broadened to include institutional financing channels, housing-linked public-private partnerships, overseas Pakistanis holding National Identity Card for Overseas Pakistanis or Pakistan Origin Cards, Securities and Exchange Commission of Pakistan-registered non-banking finance companies, and fleet operators. The mandatory 100 percent third-party verification system from Phase One, which had been estimated to cost over Rs500 million, has been replaced with a risk-based verification model using biometric checks, photographic evidence, and digital validation through the program portal. Phase One of the program received 269,149 applications, with the self-finance segment achieving a 99.6 percent delivery success rate despite limited banking approvals in the loan-financed segment.
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