ISLAMABAD: The government is giving incentives to people, including reducing customs duty on the import of certain spare parts, to promote the use of electric vehicles (EVs) in Pakistan.
Engineer Asim Ayaz, Secretary of the Auto Industry Development Committee (AIDC), told WealthPK that the Auto Industry Development and Export Policy (2021-26) was meant to increase the ratio of electric vehicles in the country to 30 percent by 2030 and 90 percent by 2040.
However, he said that owing to high prices, the current adoption rate of electric vehicles in Pakistan was only two percent. Under the policy, customs duty on certain parts of electric vehicles was fixed at one percent and sales tax on locally-produced electric vehicles was also reduced from 17 percent to one percent.
Engineer Asim said that the use of electric vehicles would contribute to the national economy by lowering fuel prices and shifting the country’s energy consumption from imported oil to domestically-produced energy.
Ayesha Khan, the territory manager of Pakistan State Oil, told WealthPK that PSO established an EV charging station in Islamabad to support the government’s initiative of promoting the use of electric vehicles. She said that the main challenge faced by the EV sector was establishing a comprehensive charging network and supplying constant power to the charging stations.
The worldwide electric car market was valued at $370 billion and it is predicted to grow at a compound annual growth rate of 23.35 percent and reach $1,298.32 billion by 2027.
In 2021, battery electric vehicles contributed more than six percent of total global car sales.
China leads the world in electric car sales. Markets in Europe and North America have also registered significant growth as Germany has increased its exports by 23 percent as it is exporting roughly 230,000 units while Japan is 27,400 units, showing an increase of 24 percent.
Pakistan’s automobile industry has great potential to make a transition to electric vehicles and combat climate change. According to the World Bank, Pakistan can save billions of dollars on crude oil imports by switching automobiles to hydrogen-powered or battery-operated electric vehicles.
The EV sector is expanding globally. The government needs to devise a strategic plan to enable automobile companies to lay a solid foundation for the EV sector in Pakistan.
–INP
