Two-wheeler electrification can help repay IMF, other loans
Pakistan is home to more than 27 million two-wheelers, making it the world's fifth-largest market for motorcycles, behind India, China, Indonesia and Vietnam. When we include three-wheelers, these vehicles comprise the backbone of urban and rural transport.
They are disproportionately responsible for air pollution, emitting approximately 335% more hydrocarbon than cars and accounting for 65-70% of vehicular smog in major cities. This environmental cost has wide economic and health implications.
In this scenario, electrifying two and three-wheelers makes sense because of the following factors: Ease of adoption: Electric vehicle (EV) conversions cost approximately Rs50,000-150,000 and charging can be done via standard household electricity outlets.
Inclusive mobility: Introducing electric three-wheelers enhances access for female and elderly drivers, offering a safer and culturally acceptable alternative to motorcycles. Fast returns: Monthly fuel costs of around Rs4,000 drop to about Rs1,000 with EVs — a net saving of Rs3,000. That speed of savings means even if an e-bike costs double a petrol bike, payback can occur in well under two years when factoring in the resale value or zero-interest financing options.
Quantifying benefits: ROI, smog relief, and economic gains
Take, for example, a petrol bike priced at Rs150,000 versus an e-bike at Rs300,000 — an incremental cost of Rs150,000. At savings of Rs3,000 per month, payback comes in 50 months; subsidies or favorable financing can reduce that to two to three years.
Cleaner air reduces healthcare spending. The World Bank estimates air pollution costs Pakistan over $22 billion annually, or around 6% of GDP. Smog impairs cognitive performance, suppresses productivity, and burdens medical services. Improved air quality also raises agricultural output. Daxin Dong et al. (Environment International, 2023) found that cleaner air directly boosts agricultural total factor productivity and greenness indices.
If only 30% of two-wheelers — about 8.1 million — transition to EVs over five years, projected savings are Rs291.6 billion ($1 billion) annually and Rs1.46 trillion ($5 billion) in five years. (Monthly saving per rider: Rs3,000; annual national saving: 8.1m x 3,000 x 12 = Rs291.6 billion). These savings could fully retire a standard-type IMF standby loan. Push the ambition to 60% conversion — roughly 16.2 million EVs — annual savings double to about $2 billion. Over five years, that's $10 billion, a sum sufficient to repay bilateral loans from partners like Saudi Arabia, the UAE or China, enhancing the sovereign financial autonomy.
Global best practices & industrial strategy
Yadea, the world's largest electric two-wheeler manufacturer, is investing $150 million in an Indonesian plant with a capacity of three million units, exemplifying how emerging economies can transform into EV producers. China's e?bike "trade-in" programmes have accelerated fleet turnover and supported local manufacturing.
In Pakistan, local EV-linked brands — Vlektra, Jolta, Road King, and Honda's Benly — are emerging. Strategic partnerships or joint ventures with Chinese original equipment manufacturers (OEMs) for battery and vehicle assembly can position Pakistan as a two-wheeler EV export hub. References from a Harvard study on emerging market EV adoption suggest that two-wheel electrification offers multiple times more welfare per dollar spent than subsidies for electric passenger cars.
Strategic policy interventions
The government should aim for 60% EV penetration in five years via a revolving fund combining subsidies and zero-interest loans (eg, total Rs300 billion).
Other proposals include introducing electric three-wheelers for safer, inclusive mobility to reduce accidents and expand access; launching a "Cash for Clunkers" style scheme for polluting bikes to accelerate fleet renewal and stimulate local assembly; leveraging idle power generation — 10,000 MW — to support off-peak EV charging, improve grid utilisation and reduce capacity costs; quantifying health and agricultural dividends of cleaner air in the national development plan; using social support delivery platforms like BISP/Ehsaas to efficiently distribute financing benefits to lower-income riders; and establishing clear metrics to monitor fuel import reduction, healthcare savings, agricultural yield improvements, and foreign exchange reserve enhancement.
Concluding thought: building legacy for sustainability
Pakistan's macroeconomic turnaround offers rare space for a transformational policy. An integrated e?mobility revolution could deliver multiple payoffs: energy sovereignty, cleaner environments, improved public health, agricultural productivity, and fiscal independence.
With 60% EV adoption, sufficient savings emerge to retire bilateral loans from Saudi Arabia, the UAE, or China, substantively altering the nation's debt trajectory. We must plan becoming an economically sovereign state to pursue geopolitical strategy without foreign influence or support.
Meeting this must be a mission shared by the government (civil and military), private sector and civil society. Through policy innovation, EV Pakistan can move to more than 5% annual growth — not by chance, but by design. One day soon, the hum of e-bikes may herald a new Pakistan: resilient, equitable, and electrified.
The writer is an independent economic analyst
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