Pakistan’s new energy vehicle (NEV) policy goal is to adopt 30% electric vehicles (EV) in new cars by the end of 2030, and envisages a gradual transition to a zero-emission road fleet by 2060, positioning it as an emerging player in the global electric vehicle market.
In January this year, China’s BYD entered the Pakistani market in partnership with Habibullah Khan. Khan’s holding company Mega Conglomerate owns Hub Power Company, one of the country’s largest independent power producers (IPPs). The announcement stated that BYD cars will be imported rather than produced domestically.
Then came the electric car boom. Pakistan’s Nisha Group announced that its automobile department will cooperate with South Korea’s Hyundai Motor to launch electric vehicles, and another private company issued a statement pledging to invest US$250 million in Pakistan’s electric vehicle market.
Chinese state-owned automakers Changan and MG have announced plans to launch electric vehicles in the Pakistani market, while Chinese electric two-wheeler brand Emma opened a store in October.
Pakistan’s Federal Energy Minister Awais Leghari told Asia Times that his team is preparing a draft to set up charging stations across the country as part of a plan to promote electric cars, motorcycles and even e-rickshaws. part.
Yousuf Dewan Companies, known for representing BMW in Pakistan, recently partnered with Chinese electric vehicle charger manufacturer Donar. The joint venture aims to provide the necessary infrastructure for electric vehicle charging.
Other Chinese companies such as Great Wall Motors, BAIC Group, Changan Automobile, Jianghuai Automobile, FAW Motors and Chery Automobile are also rapidly expanding their footprint in China.
Adopting electric vehicles provides Pakistan with an opportunity to reduce its dependence on imported fossil fuels, which not only consumes foreign currency but also exposes the country to fluctuations in global oil prices.
But as Pakistan ramps up infrastructure and policy support, its success will depend on how global electric vehicle manufacturers respond. Despite China’s early dominance, Pakistan’s electric vehicle market remains largely untapped by Western carmakers, including those from the United States and Britain.
In the United States, the Biden administration’s Inflation Reduction Act (IRA) aims to stimulate investment in green energy, including investment in electric vehicles, through tax incentives and other measures. However, it’s unclear whether the IRA’s electric vehicle drive will survive in the Trump 2.0 era.
“To further defeat inflation, my plan will end the Green New Deal, which I call the ‘Green New Scam,'” Trump said in a September speech at the Economic Club of New York. “[We will] Revoke all unspent funds under the IRA,” he added.
“I will end the electric vehicle mandate on day one,” Trump said during a speech at the Republican National Convention in Milwaukee in August.
In January in the UK, the Zero Emissions Directive (ZEM) was signed into law, requiring a complete switch to electric vehicles by 2035.
This year, labor leaders said they would restore the ZEV mandate’s original goal: 100 percent zero-emission vehicles by 2030. No meeting,” the Daily Mail said.
This policy has put many British car companies into panic. The companies face fines if they don’t meet annual EV sales targets, so they often offer discounts and promotions, but maintaining demand for EVs has put even the most established companies under pressure.
As a result, Vauxhall announced plans to close its Luton factory, while Ford announced it would cut 800 jobs in the UK over the next three years due to challenging market conditions.
While U.S. and British electric vehicle manufacturers face increasingly difficult circumstances at home, local partnerships with Pakistani companies could make strategic sense.
“We offer a range of incentives, including tax breaks, subsidies and investments in infrastructure development,” Minister Legari said.
“We are also establishing a one-stop shop for investors, providing them with all the necessary information and support to do business in Pakistan. Our aim is to create a level playing field for all investors, regardless of which country they come from,” he said .
While demand for electric vehicles has stagnated in some Western countries, it is growing strongly in Pakistan. Pakistan’s geographical location, connected to South Asia, Central Asia and the Middle East, provides a gateway not only to Pakistan but also to many other countries that are just starting to adopt electric vehicles.
“Our aim is to create a competitive and business-friendly environment that encourages global automakers to set up manufacturing plants in Pakistan and export to regional markets,” Leghari said.
To promote investment in electric vehicle manufacturing, the government is providing dedicated technology zones for new energy vehicles with cost-reduced space, leasing options and green loans. Other fiscal incentives include a 1% tariff on NEV parts until 2027, a 10% tariff on imported NEVs as complete vehicles, and a sales tax exemption for locally manufactured parts.
Other incentives include a reduction in the goods and services tax rate on electric vehicles to 1%, low electricity prices and an import tariff of only 1% on charging equipment.
Legari said his ministry was exploring more incentives, such as lower financing rates from the national bank, to attract global automakers facing challenges in their home markets.
Although Pakistan’s electric vehicle market has promising prospects, it still faces some challenges and risks. As elsewhere, a major stumbling block is the lack of charging stations, which are clearly critical to the widespread adoption of electric vehicles.
Legari said the government was promoting public-private partnerships to invest in the development of charging infrastructure. The ministry is also working to standardize electric vehicle charging stations and provide incentives for their installation.
While governments and private companies are building more charging stations, the pace remains slow. Despite various cost-reduction measures, the high upfront cost of electric vehicles could also be a significant barrier for many consumers.
Even so, Pakistan still has the potential to become an electric vehicle manufacturing and export hub in South Asia, Central Asia and the Middle East. This is true not only for Chinese EV makers, but also for Western and other Asian automakers.
Owais Rawda is a regulatory policy researcher who writes about energy and technology. You can contact him through the following methods owaisrawda@gmail.com
