Brief Overview of Pakistan's Electric Vehicle Policy

[Riaz Haq]

Pakistan has a low level of motorization with just 9% of the households owning a car. Nearly half of all households own a motorcycle. Motorization rates in the country have tripled over the last decade and a half, resulting in nearly 40% of all emissions coming from vehicles. Concerns about climate change and environmental pollution have forced the government to to take a number of actions ranging from adoption of Euro6 emission standards for new vehicles with internal combustion engines (ICE) since 2015 and announcement of a national electric vehicle (EV) policy this year.

Vehicle Ownership in Pakistan. Source: PBS

EV Policy:

Pakistan electric vehicle policy 2019 sets EV adoption targets and includes incentives for buyers and manufacturers. It also focuses on development of nationwide charging infrastructure to ease adoption of electric vehicles. Here are some of the salient points of the policy:

 Policy Targets: 

1. Goal for cars: 30% of new sales by 2030 and 90% of new sales by 2040

2. Goal for 2 and 3 wheelers: 50% of new sales by 2030 and 90% of new sales by 2040

3. Goal for buses: 50% of new sales by 2030 and 90% of new sales by 2040

4. Goal for trucks: 30% of new sales by 2030 and 90% of new sales by 2040

Buyer Incentives: 

1. 1% GST for EVs vs 17% for regular vehicles

2. Lower electricity tariffs for EVs

Charging Infrastructure: 

1. Only 1% import duty on charging equipment.

2. Lower power tariffs for charging stations.

3. One fast DC charging station per 3km by 3km area in all major cities

4. DC fast chargers on all motorways every 15-30 km.

5. Ensure uninterrupted power on feeders for charging stations.

Manufacturer Incentives: 

1. All greenfield investments apply to EV manufacturers and those converting their existing facilities to manufacture EVs.

2. State Bank to offer lower rate financing for EV manufacturing.

Summary:

Announcement of National Electric Vehicle (EV) Policy 2019 by Pakistan government is a step in the right direction. It is a forward looking step needed to deal with climate concerns from growing transport sector emissions with rapidly rising vehicle ownership. It also focuses on development of nationwide charging infrastructure to ease adoption of electric vehicles.  Meanwhile it's crucial that Euro6 emission standards be seriously enforced with proper inspections to limit emissions from internal combustion engine (ICE) vehicles being sold now.

Related Links:

Haq's Musings

South Asia Investor Review

Vehicle Ownership in Pakistan

Low Carbon Energy in Pakistan

Pakistan Transport Sector

Recurring Cycles of Drought and Floods in Pakistan

Pakistan's Response to Climate Change

Massive Oil and Gas Discovery in Pakistan: Hype vs Reality

Renewable Energy for Pakistan

Digital BRI: China and Pakistan Building Fiber, 5G Networks

LNG Imports in Pakistan

Growing Water Scarcity in Pakistan

China-Pakistan Economic Corridor

Ownership of Appliances and Vehicles in Pakistan

CPEC Transforming Pakistan

Pakistan's $20 Billion Tourism Industry Boom

Riaz Haq's YouTube Channel

PakAlumni Social Network

[Riaz Haq]

EVs’ manufacturing licenses: two, three wheelers take front seat in Pakistan - Technology - Business Recorder


https://www.brecorder.com/news/40273844

In Pakistan, 32 companies have so far received manufacturing licenses under the Electric Vehicles (EVs) Policy 2020–2025 and all of them are two and three wheeler manufacturers, a govt official told Business Recorder on Friday.

No four wheel manufacturer has approached the government till date for the license under EVs policy, said Asim Ayaz, General Manager Policy, Engineering Development Board (EDB).

“One or two companies are working on EV four wheelers. However, no formal request has been received so far for the licenses,” he said. “We believe that EV penetration will be more in 2-3 wheelers, which shows the interest of manufacturers. And it will happen at a fast rate.”

The electrification of 2-3 wheelers would be followed by cars, but at a slower rate, he added. “Electrification of cars will be followed by buses on fixed routes.”

According to the Ministry of Climate Change, the transport sector is the leading factor in the deterioration of environmental conditions with a share of 43% in Pakistan’s current environmental woes. Pakistan is one of the most affected countries due to climate change.



To put things in perspective, there are 26,884,786 registered motorcycles (two-wheels) in Pakistan; 1,001,860 three-wheelers; 4,499,423 four-wheel vehicles, according to Pakistan Economic Survey 2022-23. The total registered vehicles including two-, three-, four-wheels, buses and trucks on Pakistan roads are 34,907,449. The number includes all vehicles registered till September 2022.

The government of Pakistan approved an ambitious National Electric Vehicles Policy (NEVP) in 2019 that aimed at seeing electric vehicles take 30% share of all the passenger vehicle and heavy-duty truck sales by 2030, and 90% by 2040. Meanwhile, a more ambitious goal was set for two- and three-wheelers and buses at 50% of new sales by 2030 and 90% by 2040.

“There’s slow progress in that direction. At the present pace, the targets set for 2030 will be missed by a big margin,” said Dr Aazir Anwar Khan, Founder and Director Integrated Engineering Centre of Excellence (IECE), University of Lahore.

However, an official of the Ministry of Climate Change disagreed and said the electrification of automobiles was gradually gathering pace.

“You’ll see electric buses in Karachi and now electric bikes and EVs are not rare sights anymore,” said the official, on condition of anonymity.

What’s happening on the ground?

Electric bikes and cars are now making it to showrooms in Pakistan. One can now see an electric bike, e-tron – a high-end electric car or an electric bus every now and then. It’s not a rarity anymore.

At Karachi’s main two-wheel – motorcycle market Akbar Road, Sabir Sheikh, who owns half a dozen shops, is already seeing behavioral change of buyers.

“Motorcycle buyers have started to inquire about electric bikes, scooty, and scooters options. I believe many have postponed buying a normal two-wheeler with expectations that an electric two-wheel model may soon enter the market that is closer to their need,” said Sheikh, who is also the Chairman, Association of Pakistan Motorcycle Assemblers (APMA).

Sheikh said he also plans to start his own company to manufacture two-wheel EVs, assembler them, and also sell the electric bikes. He has run a motorcycle manufacturing company with the name Sitara in the past.

Sheikh is already selling electric scooters at his shops.

Transitioning to electric bikes

Sources privy to the matter said the ministry of climate change is the secretariat of electric vehicles policy, which can incentivise the sector for faster adoption.

Meanwhile, Aazir Khan has been an advocate for widespread EV adaption and removal of fiscal barriers on its offering to the public through scoping and advocacy studies under the Pakistan EV oversight committee.

[Riaz Haq]

Planned assembly plant in the country would mark carmaker’s first venture into south Asia as it expands globally

https://www.ft.com/content/bf1e6817-5313-4b6e-8e47-9e2960d30ecc

Chinese electric-car maker BYD’s expected expansion into Pakistan has raised hopes in the country that the Warren Buffett-backed company can help jump-start exports in the automotive manufacturing sector. Pakistan’s biggest private electricity producer Hub Power (Hubco) said last month that its subsidiary Mega Motor was entering a partnership with the Tesla rival to set up the country’s first electric vehicle assembly plant by 2026. BYD’s Pakistan plan would mark the company’s first venture into south Asia after being blocked in India by Prime Minister Narendra Modi’s government, which has restricted Chinese investment. Hubco’s chief executive Kamran Kamal said in an interview with the Financial Times that the ultimate goal was for Pakistan to start exporting vehicles from the plant near Karachi’s Port Qasim. “We have big ambitions to be the leading carmaker in this country by the end of the decade,” said Kamal. “For any industry in Pakistan to be competitive, they should be focused on the export market.” Pakistan’s finance minister Muhammad Aurangzeb said the government was encouraging BYD to export to markets in Africa and south Asia, including Bangladesh and Sri Lanka. Trade between India and Pakistan has been reduced since 2019 after a security crisis between the two countries. “We want that Pakistan becomes an export hub, period,” Aurangzeb said in a separate interview with the FT. “Korean brands are here, the Japanese brands have been here . . . but the reality is we haven’t been exporting.” BYD said details of its Pakistan plans had yet to be formally announced and declined to comment further. The company’s expansion into south Asia comes as it is also establishing factories in Turkey, Hungary, Thailand and Brazil. BYD has also been scouting locations for a new factory in Mexico. The carmaker is expanding its manufacturing footprint beyond China as countries impose increasing tariffs on Chinese exports, including on EVs, solar panels and wind turbines. Tu Le, founder of consultancy Sino Auto Insights, said the aggressive international expansion plans would help BYD export to fast-growing markets despite tariffs in the US and Europe. But he warned that BYD should not expect the same “unfettered growth” the company has enjoyed in China as it learns to manage factories in different countries. “Chinese companies are used to having a lot of control. What they are going to find is that due to labour laws, different work ethics, different cultures, they’re going to have a lot less control than they normally would,” he said. Recommended The Big Read The ambitions of China’s BYD stretch well beyond electric vehicles Hubco is a joint venture partner for a number of Chinese power projects established under the China-Pakistan Economic Corridor, a $60bn infrastructure network that is part of Beijing’s Belt and Road Initiative. The company has no prior experience manufacturing vehicles but it aims to use its extensive power generation network to set up EV charging infrastructure throughout the country of 240mn people, Kamal said. The exact size of the investment and the types of models that will be assembled in the Karachi plant “are being discussed”, he said. Hubco said it expected to sell 100,000 BYD plug-in hybrid and fully electric cars in Pakistan a year by 2030, representing about a quarter of total cars sold in Pakistan, according to the company’s estimates.

[Riaz Haq]

Competition for producing new energy vehicles (NEVs) has intensified as Sazgar Engineering Works Ltd (SEWL) plans to introduce the completely knocked down (CKD) model before Dec 31, 2025.

https://www.dawn.com/news/1860776

In a stock filing on Monday, SEWL said the board of directors had approved the plan, which includes the expansion of the existing paint shop, construction of new warehousing facilities, installation of a solar system of 4-megawatt and construction, erection, installation of new manufacturing facilities for the local assembly of NEVs subject to the approval of relevant government regulatory authorities.

The board also approved an estimated expansion cost of Rs4.5 billion, excluding land, which will be financed from the internal cash resources.

SEWL’s profit swelled by 697pc to Rs7.94bn in FY24 from Rs995m in FY23. Net sales rose to Rs57.6bn from Rs18bn.

The board also recommended a final cash dividend of Rs12 per share in addition to the interim already paid at Rs8 per share.

Besides Sazgar, Dewan Farooque Motors Ltd (DFML) last week said it had started production of EVs at its assembly plant after receiving approval from the Engineering Development Board (EDB).

China’s electric vehicle leader, BYD, has also announced plans to test the potential of EVs in Pakistan. Master Changan Motors Ltd has also launched its EV vehicles — Deepal L07 sedan and Deepal S07 SUV in Karachi — now available at the company’s 18 dealership network across 12 cities.

[Riaz Haq]

Pakistan Aims to Slash Power Prices for EV Charging Stations

https://finance.yahoo.com/news/pakistan-aims-slash-power-prices-110...

(Bloomberg) -- Pakistan is looking to stimulate demand for electric vehicles by reducing power prices at charging stations, as the country attempts to kickstart the decarbonization of its transport sector.

The South Asian nation will create demand “by bringing down drastically the prices for new sectors including EVs,” Power Minister Awais Leghari said in an interview. The government is discussing a pricing structure and the incentive would apply to all charging and battery swapping stations for small cars, two-wheelers and three-wheelers, he added.



More than half a dozen auto companies, led by Chinese brands, have launched EV models in Pakistan this year. Chinese EV maker BYD’s local partner Hub signed an agreement with the country’s largest fuel retailer, Pakistan State Oil, this month to jointly establish an EV charging network across the nation.

Meanwhile, the country has seen a drop in electricity demand while prices have soared and the government has had to secure loans from the International Monetary Fund.

As part of the $7 billion loan requirements, the government is working on a flurry of reforms to restore the energy sector’s viability. The nation is in talks to revise purchase contracts with local power companies and reprofiling debt with Chinese lenders.

Prime Minister Shehbaz Sharif’s administration also wants to move away from the existing model of the government being the sole buyer of electricity, and create a wider market, Leghari said.



The independent market operator system will be functional by March and broader trade is expected to pick up within a year, he said.

[Riaz Haq]

Pakistan rolling out a green carpet for global EV makers - Asia Times

https://asiatimes.com/2024/12/pakistan-rolling-out-a-green-carpet-f...

Pakistan’s New Energy Vehicle (NEV) policy targets 30% electric vehicle (EV) adoption for new vehicles by the end of 2030 and envisions a gradual transition to a zero-emission road fleet by 2060, positioning itself as an emerging player in the global EV market.
In January, China’s BYD partnered with Habibullah Khan to enter Pakistan’s market. Khan’s holding company, Mega Conglomerate, owns Hub Power Company, one of the largest independent power producers (IPPs) in the country. The announcement said the BYD vehicles would be imported rather than produced domestically.

An EV boomlet has followed. Pakistan’s Nishat Group announced its automobile division would debut an EV with South Korea’s Hyundai, while another private enterprise issued a statement committing a US$250 million investment in Pakistan’s EV market.

---------------
While US and UK EV makers face increasingly difficult situations in their home countries, local partnerships with Pakistan-based companies could make strategic sense.

“We’re offering a range of incentives, including tax breaks, subsidies, and investment in infrastructure development,” said Minister Leghari.

“We’re also establishing a one-stop shop for investors, providing them with all the necessary information and support to set up their businesses in Pakistan. Our goal is to create a level playing field for all investors, regardless of their country of origin,” he said.

While EV demand is stalling in some Western countries, it’s growing robustly in Pakistan. And Pakistan’s geographic location connects with South Asia, Central Asia and the Middle East, providing a gateway not just to Pakistan but to many other countries just starting to adopt EVs.

“Our goal is to create a competitive and business-friendly environment that encourages global automakers to set up their manufacturing facilities in Pakistan and export to regional markets,” Leghari said.

To promote EV manufacturing investment, the government is providing NEV-specific technology zones at reduced cost space, leasing options and green loans. Other financial incentives will include a 1% customs duty on NEV parts and 10% on complete NEV imports until 2027, along with sales tax exemptions for locally manufactured components.

Other incentives include a reduced goods and services tax rate of 1% for EVs, low electricity tariffs and an import duty of only 1% for charging equipment.

Leghari says his ministry is exploring more incentives, such as offering lower financing rates from the state bank to attract global automakers facing challenges in their home markets.

While the prospects for Pakistan’s EV market are promising, there are still several challenges and risks. Like elsewhere, one major hurdle is the lack of charging stations, which obviously is crucial for the widespread EV adoption.

Leghari said the government is promoting public-private partnerships to invest in the development of charging infrastructure. The ministry is also working on standardizing EV charging stations and providing incentives for their installation.

[Riaz Haq]

China’s ADM Group announces $250 million investment to set up EV manufacturing plant in Pakistan

https://www.arabnews.com/node/2587338/pakistan

ISLAMABAD: China’s ADM Group will invest $250 million to set up an electric vehicle manufacturing plant in Pakistan, state media reported on Wednesday, as Islamabad seeks for Beijing to collaborate in setting up industrial zones to manufacture electronic cars.

The government of Pakistan approved an ambitious National Electric Vehicles Policy (NEVP) in 2019 with the goal of electric vehicles comprising 30 percent of all passenger vehicle and heavy-duty truck sales by 2030, and an even more ambitious target of 90 percent by 2040. For two- and three-wheelers, as well as buses, the policy set a goal of achieving 50 percent of new sales by 2030 and 90 percent by 2040.

“Chinese Company ADM Group has announced an investment of two hundred and fifty million dollars to set up an EV manufacturing plant in Pakistan,” Radio Pakistan reported, saying the initiative was part of efforts by the Special Investment Facilitation Council set up last year to attract foreign investment.

“Transition to EVs is expected to cut fuel import costs, saving billions of dollars.”

Last year, ADM Group announced an investment of $350 million in Pakistan’s EV sector, saying it would establish more than 3,000 electric vehicle charging stations across the South Asian country.

Earlier this month, Pakistan said it would cut the power tariff for operators of electric vehicle charging stations by 45 percent as part of the ongoing reform of the energy sector designed to boost demand. The government is also planning to introduce financing schemes for e-bikes and the conversion of two- and three-wheeled petrol vehicles.

The cabinet on Jan. 15 approved a reduced tariff of 39.70 rupees ($0.14) per unit, down from 71.10 rupees previously, which will be in place within a month. The government expects an internal rate of return of more than 20 percent for investors in the sector.

According to a report submitted to the government by power ministry adviser Ammar Habib Khan and reported by Reuters, there are currently more than 30 million two- and three-wheeled vehicles in Pakistan, which consume more than $5 billion worth of petroleum annually.

The ministry plans to convert 1 million two-wheelers to electric bikes in a first phase, at an estimated net cost of 40,000 rupees per bike, according to the report, saving around $165 million in fuel import costs annually.

BYD Pakistan, a partnership between China’s BYD and Pakistani car group Mega Motors, told Reuters in September that up to 50 percent of all vehicles bought in Pakistan by 2030 will be electrified in some form in line with global targets.

[Riaz Haq]

Pakistan seeks Swedish green fund assistance

https://tribune.com.pk/story/2524076/pakistan-seeks-swedish-green-f...

Federal Minister for Power Awais Ahmed Khan Leghari has invited Sweden Green Fund to assist in conversion of Pakistan's small vehicles into electric technology by providing technical and financial assistance, which will support Pakistan's recent record reduction in tariffs for electric vehicle (EV) charging stations.

The minister put forward the proposal in a meeting with Swedish Ambassador Alexandra Berg Von Linde on Thursday.

Elaborating on the proposal for the conversion of existing fossil fuel vehicles, especially motorcycles, Leghari said that currently there were over 30 million motorcycles in Pakistan and people falling in that income group had a very good record of retiring loans.

He suggested that the Swedish and EU green fund could consider providing interest-free loans through Pakistani banks, which had put in place a very robust system. Highlighting the current energy mix and the importance of renewable energy, the power minister said that last year 55% of the overall electricity generation in Pakistan came from renewable energy.

"Pakistan is fully committed to promoting renewable energy and in this regard the Power Division is carefully chalking out policies to provide affordable and sustainable electricity to consumers," he stressed. Leghari pointed out that Pakistan was reviewing the Indicative Generation Capacity Expansion Plan (IGCEP) to ensure the integration of energy into the national grid on a least-cost basis in order to optimise the country's energy resources for maximum economic impact.

The ambassador said "seventy five years of diplomatic relations between Pakistan and Sweden were celebrated last year. This reflects the strength and depth of our bilateral ties."

She highlighted that Swedish firms operating in Pakistan were keen on securing green energy supply and Sweden was ready to share expertise and provide technological support. The textile sector of Pakistan, being a primary exporter to the European Union, was focusing on growing its global competitiveness in terms of renewable and sustainable energy, the ambassador said. She underscored Sweden's leadership in renewable energy as it produced 70% of energy from renewable resources, showcasing how economic development and green energy could coexist seamlessly.

[Riaz Haq]

Yadea Pakistan targets 20% EV market share by 2025


https://www.thenews.com.pk/print/1275355-yadea-pakistan-targets-20p...


LAHORE: Yadea, the world’s largest producer of electric two-wheelers, unveiled four innovative electric vehicle (EV) models on Wednesday, including the GT 30, as part of its ambitious plan to capture 20 per cent of the country’s EV market by 2025.

Speaking at the launch event, Managing Director of Yadea Pakistan Muhammad Salman highlighted the country’s potential for substantial growth in the EV sector. He attributed this to rising environmental awareness, escalating fuel prices and supportive government initiatives promoting green mobility. Industry projections indicate that the country’s EV market could grow by over 80 per cent by the end of next year, with two-wheelers leading the charge due to their affordability and practicality for urban commuting.

[Riaz Haq]

Wave Tech to Establish Pakistan's First Lithium Battery Manufacturing Plant


https://propakistani.pk/2025/01/28/wave-tech-to-establish-pakistans...

Wave Tech has announced its plan to set up Pakistan’s first-ever lithium battery manufacturing plant at the Malir Industrial Park (MIP) in Karachi, with a substantial Foreign Direct Investment (FDI) of $200 million.

The construction of this state-of-the-art facility is set to commence in December 2025, and battery production is expected to start by mid-2026.

This groundbreaking initiative aims to phase out oxide batteries in Pakistan, contributing to the country’s transition towards modern and sustainable energy solutions.

The Malir Industrial Park (MIP), a flagship project of the Pakistan Economic Zones Development and Management Company (PEZDMC), is at the forefront of fostering industrial growth in Karachi.

Envisioned as a world-class industrial zone, MIP is designed to boost manufacturing and exports while generating significant employment opportunities. Its strategic location in Malir ensures seamless connectivity to key infrastructure, including the Karachi Port, Port Qasim, and major highways, making it an ideal destination for investors and industries.

[Riaz Haq]

China pledges $340mn to Pakistan's EV sector - Investment Monitor

https://www.investmentmonitor.ai/news/china-pledges-340mn-to-pakist...

A group of Chinese firms has pledged to invest $340mn in Pakistan’s electric vehicle (EV) sector to expand their manufacturing plants and charging stations, according to local news outlets. The investment was announced at a press briefing inaugurating a joint project between Malik Group and China’s ADEN Group.



“If the company manufactures EVs in Pakistan, the Sindh government will purchase over 20% of the vehicles produced at the Karachi plant,” Sindh province’s Energy Minister Syed Nasir Hussain Shah.



Malik Group chairperson Malik Khuda Bakhsh said 30 charging plants are set to be delivered from China in the next ten days. The project seems to be moving fast as Bakhsh added that Pakistan aimed to “have the necessary infrastructure operation by the end of this year.”

ADEN Group, which has its global headquarters in Singapore, is expected to invest $90mn for 3,000 charging stations and $240mn for an EV production facility.

“By December, EV production will begin, with an annual output target of 72,000 units,” ADEN Group CEO Yasser Bhambani said. “We also plan to export vehicles to the Middle East, Sri Lanka and Bangladesh.”

Recently, Pakistan experienced some positive FDI growth. In August 2024, data from the State Bank of Pakistan showed there had been a monthly rise in FDI compared to 2023. It received $136.3mn in net FDI in July 2024, marking a 64% increase compared to July 2023.