New Policy Announced to Shift 30% Vehicles to Electric by 2030

The government has announced the New Energy Vehicle (NEV) Policy aimed at converting 30% of all imported and locally manufactured vehicles to electric power by 2030, despite concerns from major stakeholders.

According to Dawn newspaper, the announcement was made by Minister for Industries and Production Rana Tanveer Hussain during a press conference, where he claimed that all stakeholders were consulted during the policy-making process.

However, immediately after his address, the Pakistan Automotive Manufacturers Association (PAMA) issued a statement raising serious concerns about the potential impact of the new policy on the local auto industry.

The policy includes electric vehicles (EVs) and other emerging energy sources like hydrogen.

Key Features of the Policy

Subsidies:

Electric motorcycles: PKR 50,000 subsidy per unit.

Three-wheelers (rickshaws): PKR 200,000 subsidy per unit.

A total allocation of PKR 4 billion for subsidies, to be distributed through auctions.

Licenses have been granted to two companies, with 31 more applications under review.

Tax Relief and Incentives:

The policy lowers the policy rate from 22% to 15%.

Financing is available at 3% Karachi Interbank Offered Rate (KIBOR), with the government covering financial costs.

Consumers will pay monthly installments of around PKR 9,000 for two years, less than the expected fuel savings.

Environmental and Economic Impact:

Transitioning to EVs is expected to significantly reduce Pakistan’s reliance on expensive imported petroleum and lower environmental pollution.

Support for Local Manufacturing:

Duties on EV components will be reduced to encourage local manufacturing.

Plans to establish a New Energy Fund and a New Energy Vehicle Center to support these initiatives.

Promising students will be given 120 free electric bikes or scooters.

International Collaboration

China’s BYD Group, a major global EV manufacturer, has secured a manufacturing license in Pakistan, while Dewan Motors is preparing to launch its EVs under a completely knocked-down (CKD) license.

PAMA’s Concerns

PAMA expressed concerns to the Engineering Development Board (EDB), warning that importing completely built units (CBUs) at lower duties compared to CKDs could harm the local industry.

Recommendations:

Continue the existing policy for hybrid electric vehicles (HEVs) and plug-in hybrid electric vehicles (PHEVs) until 2030.

Match duties and incentives for NEVs with other vehicles starting from the third year.

Mandate local manufacturing facilities for CBU importers within a set timeframe to ensure long-term growth for Pakistan’s auto industry.

PAMA also proposed expanding the policy to include renewable energy-powered vehicles, such as biogas-fueled cars, and ensuring policy continuity for HEVs and PHEVs.

The government believes this policy will balance innovation with environmental and economic benefits, despite challenges raised by stakeholders.