Islamabad stakeholders in the renewable energy sector have called on the Engineering Development Board to slash taxes on lithium battery cells to support local production and wider adoption of clean energy. Irfan Allahawala, chairman of the Pakistan Renewable Energy Development Forum, said the move would create an enabling environment for investors to assemble and manufacture batteries domestically.
In a letter to the EDB, the forum noted that cells used in lithium batteries face an effective tax rate of 50 percent, a level that discourages local assembly and keeps retail battery prices high. Such duties, the letter argued, act as a barrier to faster deployment of renewable energy systems and raise the cost of transitioning away from conventional power sources.
The forum urged the government to promote import substitution by providing a level playing field for new manufacturers and rationalising taxes to attract investment. Expanding affordable access to lithium batteries would support solar and wind adoption across factories, offices, public transport, private vehicles, motorcycles and household appliances, reducing reliance on imported petroleum and LNG.
Reducing levies on cells would also lower the import bill by encouraging electrification of two- and four-wheel vehicles and enabling local assemblers to scale up production and facilitate technology transfer. The forum believes these measures could help bring down energy-led inflation while stimulating domestic industry.
Pakistan imported roughly 26,000 MW of solar panels between 2022 and 2024, all of which require battery storage. Lithium-ion battery imports reached about 1.25 GWh in 2024 and are projected to rise to 2.5–3 GWh in 2025. The availability of affordable lithium batteries, the letter concluded, is essential to accelerate investment in local markets and secure a cost-effective transition to renewable energy.
