IMF endorses Rs 100 bln subsidy for electric vehicles

ISLAMABAD: The IMF has endorsed the government’s policy of Rs 100 billion subsidy for promotion of electric vehicles from 2025–30, sources said.

The new electric vehicle policy for five years, aiming to reduce carbon emissions, cut fuel imports, and promote local manufacturing of electric vehicles (EVs).

To promote EVs’ adoption, the government has allocated Rs nine billion in subsidies for the fiscal year 2025–26.

Under the EV policy Rs 50,000 subsidy will be given to each two-wheeler or three-wheeler, sources at the Ministry of Industries and Production said.

This funding will help deliver over 116,000 electric bikes and more than 3,000 electric rickshaws in two years, sources said. Notably, 25% of the subsidy has been reserved for women to support affordable and eco-friendly mobility options for them.

One of the major goals of the policy is to ensure that 30% of new vehicles by 2030 are electric.

According to documents, the previous EV policy brought only 50,000 two or three-wheelers in market. Instead of the 1000 buses target, only 200 electric buses hit the market.

Moreover, only 3-000 four-wheelers and 10 trucks came to market instead of the target of one lac electric vehicles fixed in the previous policy, as per the official papers.

The government has allocated 19 billion rupees subsidy for year 2027, 24.16 bln for year 2028, 26.62 billion subsidies for year 2029 and 22.64 bln for year 2030, according to sources.

The prime minister will announce enforcement of the new policy from August 14.

The policy also includes infrastructure upgrades like installing 40 electric charging stations along motorways. New building codes will require EV charging points, and battery-swapping systems will also be introduced for ease of use in urban areas.