ISLAMABAD: At least six companies in Pakistan are manufacturing or assembling electric motorbikes while licenses have been issued to 31 companies, officials at the Engineering Development Board of the Ministry of Industries and Production said this week, as the South Asian country aims for long-term mass adoption of electric vehicles (EVs).

The ‘Electric Vehicle Policy 2020-25,’ approved in 2019, offers incentives and tax exemptions to promote local manufacturing of electric vehicles, with the aim of seeing electric vehicles capture 30 percent of all the passenger vehicle and heavy-duty truck sales by 2030, and 90 percent by 2040. It also sets ambitious goals for two- and three-wheelers and buses: 50 percent of new sales by 2030 and 90 percent by 2040.

Pakistan is the fifth largest motorcycle market in the world after China, India, Indonesia, and Vietnam. There are around 23 million registered motorbikes in the country of over 240 million people, with its transport sector responsible for 30 percent of its total carbon emissions. Most motorcycles create more air pollution and smog than cars, according to a number of studies.

Pakistan’s automotive industry provides direct and indirect employment to three million people and contributes approximately Rs100 billion annually to the exchequer.

“We have issued licenses to 31 companies so far for local manufacturing of electric motorbikes and they all have been gradually starting the production,” Asim Ayaz, General-Manager (Policy) at the Engineering Development Board of the Ministry of Industries and Production, told Arab News, adding that at least six companies were currently either manufacturing or assembling motorbikes of different variants.

Tax incentives under the EV policy include one percent customs duty on the import of batteries, motor and drivetrain (replacement of engine and gear) for electric motorbikes against 15 percent customs duty on non-EV parts. General sales tax at the sales stage for two-three wheelers has been fixed at one percent for five years, with exemption from registration and annual token tax.

“We are optimistic these incentives would help revolutionize the industry and cut greenhouse gas emissions besides providing green jobs to skilled and unskilled workers in the long run,” Ayaz said.

One company currently working on the mass-market adoption of electric mobility in Pakistan is the Lahore-based Zyp Technologies, which last month raised $1.2 million for its innovative battery swapping electric motorbikes with a production capacity of 8,000 units per annum.

The firm has an indigenously developed product portfolio that includes purpose-built electric motorcycles, innovative battery swap stations, proprietary and patent pending battery architecture, cloud software and mobile apps.

“Our main objective is to reduce carbon footprint significantly through electric motorbikes and provide an eco-friendly alternative to users to cut their daily and monthly petrol cost,” Hassan Khan, co-founder and CEO of Zyp Technologies, told Arab News.

The company has indigenously produced ten units for trial purposes while mass production will start from March 2024.

“We are investing in our molds and dyes as all our parts including chassis are designed and manufactured locally,” Khan added.

The company aims to set up 60 battery swap stations in Lahore next year and expand it to 4,000 stations across Pakistan in five years to help refuel bikes in less than a minute: “We will not be selling battery with the bike as this increases cost to two-fold, instead we’ll be offering it as a service.”

Khan said a Zyp motorbike would cost around Rs150,000 per unit ($530), but offer saving on fuel of up to 40 percent.

Indeed, electric motorbikes will be a welcome alternative in a country where petrol and diesel cost more than Rs300 per liter.

Pakzon, a pioneering electric motorbikes company in Pakistan, said its sales had picked up this year due to record hikes in petroleum prices.

“We sold over forty bikes last month in the Islamabad region only,” Babar Shahzad, a manager for Pakzon’s Islamabad region, told Arab News, saying this was a more than doubling of sales. 

The company is offering motorbikes with two battery options, lithium phosphate and dry gel, which can be charged at home with normal 220 volts.

“The battery takes around two electricity units per charge in three to four hours and travels over seventy kilometers in a single charge,” Shahzad said, saying the bike reduced fuel cost by up to sixty percent.

“Maintenance cost of electric motorbikes is almost zero, they are noiseless with zero noise and air pollution,” Shahzad said.

He said the life of a dry gel battery was two years at a price of Rs60,000 ($211) while a lithium phosphate battery would last seven years and cost Rs110,000 ($387).

But there are several barriers in EV adoption highlighted by industry experts, including the high upfront cost of electric vehicles, which is mostly attributed to the high battery cost which accounts for more than 30 percent of the upfront cost. A second concern among consumers is range anxiety, or the fear of running out of power before reaching a destination due to a lack of charging infrastructure.

While fast chargers at public charging stations reduce the charging time of vehicles, the current numbers of such stations are insufficient to meet the increased demand for fast charging in the future and people would not be willing to wait in long queues for hours to charge their EVs.

“To fast-track the adoption of EVs, consumers must be guaranteed a sense of security that they will have access to sufficient charging infrastructure available in close proximities,” said a 2022 study on electric bikes by the Mahbub ul Haq Research Center at LUMS.

For e-bikes, home charging is another option though consumers are concerned about high electricity voltage and frequency issues that could put their expensive vehicles at risk. In addition to this, insecurity of reliable electricity provision with increasing power cuts would be a concern for potential EV buyers.

As the domestic market for EVs is yet to expand, the availability of spare parts and technical expertise for repair and maintenance also remains a concern.

“The major challenge for us at the moment is to develop a system for either fast charging of the batteries,” Pakzon’s Shahzad said, “or to set up charging stations along the existing gas stations across Pakistan to expand eco-friendly motorbikes sales.”