Electric Vehicles: Market, Policy, and Future in Pakistan
introduction of computerized masks attached with headphones or the unearthing of electric vehicles, the technology is taking the world by storm! The country might not be having its best economic years since its creation, however, despite all the turmoil the Pakistani government decided to release policies for Electric Vehicles and they have undoubtedly made the right decision as the surge of Electric Vehicles in Pakistan will not only cater to its climatic goals but also will act pivotal to decrease the evergreen noise pollution. Electric Vehicle Policy in Pakistan The initial phase of Pakistan’s new EV policy constitutes tax incentives on electric cars in Pakistan. Only a mere 1% GST will be implemented on the buyers of electric cars which is comparatively low from the standard 17%. The government aims to curb air pollution by having around half a million motorcycles and rickshaws coupled with 100,000 cars in the next 5 years. Along with this tax duty worth, only 1% will be applicable on any charging equipment that is imported, which is coupled with lower electricity tariffs for electric vehicle charging stations. In addition to this, all greenfield investments apply to anyone manufacturing the EVs. Additionally, the government will lower the unit rate of electricity for charging station operators to encourage private investments in charging stations. Moreover, to facilitate and make life easy for the general public, the government aims to establish one fast DC charging station per 3km by 3km area in all major cities. Besides this, the policy also targets to lay the foundation for DC charging stations on all motorways after every 15-30 Kms. To encourage more EV manufacturers towards this industry the state bank is also expected to offer lower rate financing to EV manufacturers In a bid to enhance and increase the number of electric cars being imported to Pakistan, The government has decided to allow 50% exemption on duty and taxes on Hybrid and Electric Vehicles of engine power up to 1800 cc while 25% exemption on duty and taxes will be exercised for cars ranging from engine capacity of 1800-2500 cc. For anything to flourish and establish its name in the market, it takes a lot of time and effort. Similarly, it will take a lot of encouragement and motivation from the government so that they can sow the seeds of the booming EV market. Along with persuading the locals that the EVs are better and encouraging current non-EV manufacturers to shift their focus towards EV manufacturing, the government would also be highly optimistic to spark the interest of foreign manufacturers to invest and establish their plants in Pakistan. Pakistan, in the past decade already has a strong market for hybrid vehicles with Honda Vezel along with Toyota Aqua and Toyota Prius leading the charts. Leading manufacturers in the automobile industry are very keen to invest in Pakistan as they believe that its market has a lot of potentials to succeed. Initially, the EV models introduced were slightly on the expensive side for the common man however as time has passed, top manufacturers, such as Super Power Motorcycles, have started introducing EV models with a wide range of prices, to accommodate the masses. One such model is priced at PKR 600,000, which suggests that Pakistani manufacturers are willing to risk investing in this market segment. Companies such as Audi, BMW, MG along with various other companies have begun to introduce EVs such as the I8 and E-TRON and are expected to introduce more such models in the future. Nissan, Hyundai, and Renault are also in talks with the Ministry of Industries & Production for producing locally manufactured electric cars. The 2016 Auto-Industry Developing Policy (AIDP) along with the success of CPEC has meant that a higher number of foreign automotive brands are interested to enter the Pakistani market. Most of these brands hail from countries such as South Korea, China, and Japan which are at the top of the table when it comes to the automotive market. In addition to this, when a higher number of brands will enter the electric vehicle market, healthy competition will come into existence for the manufacturers which will eventually provide a wider and improved set of options for the local bloom in this sector of the automobile industry seems inevitable considering how active the government has been in developing the policies. Without a doubt, this development will prove to be extremely beneficial for the country’s economy as well as its atmosphere (as less harmful gases will be released due to the use of electric vehicles). These cars will also require less maintenance compared to the current ones being used, and are also expected to help the government financially as with their usage, the expensive oil imports are also expected to decrease. However, just like every other thing in this world the in-flux of electric vehicles also brings cons along with its pros. For a country like Pakistan, which has its long history of load shedding and power shortages along with inflated prices for electricity units, things could get very difficult for the government to manage in the future unless they massively increase their power production. The other drawbacks include relatively low-speed limit, short range of travel on a full battery, and lack of options in the newly emerging market.