Pakistan approved an ambitious National Electric Vehicles Policy (NEVP) in November, with targets and incentives aimed at seeing electric vehicles capture 30% of all the passenger vehicle and heavy-duty truck sales by 2030, and 90% by 2040. It sets even more ambitious goals for two- and three-wheelers and buses; 50% of new sales by 2030 and 90% by 2040.
You might well wonder why the Government of Pakistan would propose an electric vehicle policy at a moment when the inflation rate has just reached 12.7%, the rupee is down almost 50% against the dollar, and the government is scrambling to cover a balance-of-payments deficit. This doesn’t seem like the best time to be importing Teslas!
The answer might be that the government is betting that an EV policy could not only further its climate goals and help with the dangerous air pollution problem in the cities, but also has the potential to breathe new life into Pakistan’s economy.
Pakistan already has an infant electric vehicle industry. The five domestic electric vehicle manufacturers recently banded together as the Pakistan Electric Vehicles Manufacturing Association (PEVMA) and have been making significant investments in the sector, often partnering with established international automobile companies. The NEVP incorporates new foreign direct investment incentives to stimulate investment in EVs. Manufacturers, assemblers, and suppliers in the EV and related infrastructure industries will benefit from lower taxes – 1% GST for EVs as opposed to 17% for regular vehicles. The import duty for charging equipment is also being slashed to 1%. Additionally, the government will lower the unit rate of electricity for charging station operators to encourage private investments in charging stations. The government will also install at least one DC fast-charging station every 10 square kilometers in all major cities (targeting the more than 3,000 defunct CNG stations as locations) and every 15–30 kilometers on all motorways.
The NEVP also represents a step towards realizing Pakistan’s goals for climate action and improvement of air quality as those are outlined by the Climate Change Act of 2016 and Pakistan Environmental Protection Act 1997. Transportation is, of course, a significant contributor to climate change, responsible for 24% of direct CO2 emissions from fuel combustion globally. Pakistan ranks 8th on Germanwatch’s Long-Term Climate Risk Index, which tracks the extent to which countries have been affected by the impacts of weather-related loss events. Experts suggest that rising temperatures and erratic rainfall could threaten the country’s ability to sustain agricultural and livestock production at current levels, increase vulnerability of energy production from hydropower plants, and affect the availability of fresh drinking water to major urban areas.
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SOURCE: ICCT
