ISLAMABAD: Pakistan’s flagship electric mobility initiative has suffered a significant setback after commercial banks rejected nearly 91% of loan applications for subsidised electric bikes, forcing the federal government to urgently revise its financing strategy to salvage the programme. The development has exposed structural weaknesses in the rollout of the Pakistan Accelerated Vehicle Electrification (PAVE) scheme, designed to promote affordable green transport nationwide, Wednesday, May 6, 2026.
The crisis emerged after banks approved only a fraction of applications under the government-backed scheme, prompting officials to shift toward self-financing models and reduce reliance on traditional lending institutions, according to officials briefed on the Economic Coordination Committee (ECC) decisions.
e-bike scheme Pakistan hit as banks reject majority of applications
Under the programme, commercial banks received 44,689 applications but approved just 4,075, translating to roughly 9% acceptance. The rejection-heavy outcome effectively stalled distribution targets and created a financing bottleneck that officials say undermined public confidence in the initiative.
Despite the government’s plan to distribute more than 116,000 electric bikes and rickshaws in the current fiscal cycle, only about 5,409 units have been delivered so far, far below expectations. Analysts say the gap highlights the difficulty of relying on commercial banking channels for subsidised green mobility schemes in emerging markets.
Similar challenges were previously flagged in Pakistan’s electric vehicle financing landscape, where banks had raised concerns over risk exposure and pricing structures, as reported during earlier EV policy discussions in 2025, when negotiations over interest rates stalled broader adoption efforts
earlier EV financing tensions.
Policy overhaul reshapes e-bike scheme Pakistan financing model
In response to the low approval rate, the ECC has approved sweeping changes to the programme, shifting emphasis away from bank-led financing toward direct and simplified subsidy mechanisms. Officials said applicants will now be encouraged to opt for self-financing routes, which have shown significantly higher success rates.
Government data indicates that nearly all applicants using self-finance channels were approved, compared to the poor performance of bank-managed loans, signalling a sharp divide in execution efficiency.
The revised structure also introduces a simplified purchase option allowing buyers to receive vehicles directly from suppliers after paying a subsidised amount, bypassing full loan processing requirements.
According to officials, the redesign aims to address administrative delays and verification issues that previously slowed down approvals and weakened confidence in the programme’s execution framework.
Funding structure and earlier rollout plans
The electric bike scheme is funded through a climate support levy of Rs2.5 per litre on petroleum products, with allocations reaching billions of rupees annually. Earlier policy frameworks envisioned zero-markup financing and broad accessibility through banks under a phased rollout system.
In a separate rollout announcement in 2025, the State Bank of Pakistan outlined plans for over 116,000 electric bikes and thousands of rickshaws under a two-phase distribution model aimed at improving affordability and reducing fuel dependency
SBP scheme framework details.
However, implementation hurdles have persisted, including verification challenges, delayed processing, and limited participation from financial institutions, all of which have contributed to the current restructuring effort.
What happens next for e-bike scheme Pakistan
Officials say the revised model will prioritise faster delivery mechanisms, reduced reliance on banking intermediaries, and expanded eligibility through simplified digital platforms. Additional quotas for students, government employees, and fleet operators are also being considered to improve uptake.
Despite setbacks, authorities maintain that the programme remains central to Pakistan’s long-term transition toward electric mobility and reduced fuel imports. However, experts caution that sustained policy consistency and stronger institutional participation will be essential to avoid further delays.
Earlier reports on electric vehicle adoption efforts in Pakistan highlight that subsidy-based systems have repeatedly struggled with financing bottlenecks and implementation gaps, even when demand remains strong
historical EV scheme context.
