In November, Pakistan established an offensive National Electric Vehicles Policy Pakistan with the goal and benefit of seeing electric vehicles capture 30% of all passenger vehicle and heavy-duty truck sales by 2030 and 90% by 2040. It sets much more aggressive goals for two- and three-wheelers and buses; 50% of new deals by 2030 and 90% by 2040.
You may well wonder why Pakistan’s government will suggest an electric car policy at the moment when the inflation rate has only hit 12.7%; the rupee is down almost 50 percent against the dollar. The budget is scrambling to fund a shortfall in the balance of payments. The response could be that the government is betting that an EV program will advance its climate targets, aid the cities with the dangerous issue of air pollution, and breathe new life into Pakistan’s economy. As the Pakistan Electric Vehicles Manufacturing Association (PEVMA), the five domestic electric vehicle manufacturers recently banded together and made valuable investments in the market, mostly partnering with existing foreign automotive firms.
To stimulate investment in EVs, the NEVP incorporates new foreign direct investment incentives. In the EV and associated infrastructure sectors, manufacturers, assemblers, and retailers would benefit from lower taxes-1% GST for EVs instead of 17% for standard vehicles. Even the import duty is limited to 1% for charging machines. Besides, to promote private investment in charging stations, the government would lower the unit cost of electricity for charging station operators. In all big cities, the government will also build at least one DC fast-charging station every 10 square kilometers and all motorways every 15-30 kilometers. As outlined by the Climate Change Act of 2016 and the Pakistan Environmental Conservation Act 1997, the NEVP is also a step towards achieving Pakistan’s targets for climate action and air quality improvement. Of note, transport is a massive contributor to climate change and accounts for 24% of direct CO2 emissions from fuel combustion worldwide.
Experts say that increasing temperatures and irregular rainfall could threaten the country’s ability to maintain current agricultural and livestock production levels, increase the vulnerability of hydropower plant energy production, and impact fresh drinking water supply to major urban areas. The NEVP comes when, on certain days, Lahore’s declining air quality has caused it to surpass New Delhi as the world’s most polluted city. The heavy autumn smog in the region is a significant health threat, causing schools to shut down three times in November 2019 alone.
Environmental air pollution is blamed for 135,000 deaths per year, costing the economy 5.88% or $47.8 billion. Vehicle emissions account for a substantial portion of air pollution in the country, leading in major urban centers to more than 70% of delicate particulate matter (PM2.5) and PM10 emissions. It is also noteworthy that, as part of their efforts to enhance air quality, minimize climate impacts and grab a share in the developing EV market, India and China have both implemented national EV plans and made essential investments in the industry. Pakistan’s NEVP should not happen in a vacuum. The NEVP is a welcoming first step, but the critical caveat that efficient execution is crucial must come with that welcome. The work of the ICCT reveals that by the end of 2019, almost all of the world’s 7 million EV purchases depended on laws to make EV models readily accessible, subsidies to improve EV availability, charging infrastructure to ensure comfort for EVs, and EV awareness campaigns to enhance customer awareness.