The federal government has turned down the Engineering Development Board’s (EDB) request to continue tax exemptions on imported parts of electric bikes, sources confirmed. With this move, the customs duty on EV bike components, earlier fixed at just 1 percent, may now jump to as high as 30–35 percent, sparking concerns about a major price hike in the electric two-wheeler market.
Insiders revealed that Prime Minister Shehbaz Sharif was briefed on the EV bike initiative using misleading data, which led to the reversal of earlier incentives. Since July 2020, the scheme had offered relief on essential parts such as batteries, motors, chargers, and converters. Under the Auto Industry Development Policy 2021–26, the industry was supposed to seek an extension of these concessions before the federal budget.
However, with the rejection, manufacturers of electric bikes are preparing to bear significantly higher production costs.
Adding to the industry’s woes, the EDB has been operating without a permanent CEO for the past 14 months and without a functional board for over a year, following the resignation of its last chairman. Despite rules allowing acting appointments for only two months, Khuda Bakhsh Ali has continued to serve as acting CEO for over a year.
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This leadership vacuum has weakened the EDB’s role in policymaking, leaving governance gaps. Sources also disclosed that the Motor Vehicle Industry Act was drafted without the board’s approval, raising further questions over transparency. With the government’s latest decision, the future of affordable electric bikes in Pakistan appears increasingly uncertain.
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