Electric Vehicles Policy 2020

June 24, 2020 By 0 Comments

Pakistan EV Policy 2020

The Economic Coordination Committee of the cabinet in Pakistan has approved the Electric Vehicle policy for 2-3 wheelers and Heavy
Commercial Vehicles in June 2020. The policy was proposed by the
Ministry of Industries after consultation with various ministerial
stakeholders (Engineering Development Board, Ministry of Science and
Technology, Ministry of Climate Change and others). This publication
outlines key features of EV Policy 2020 and salient incentives offered.

Why EVs in Pakistan?

According to a global estimate, around 20 percent of greenhouse gas emissions happen due to various means of transportation. This statistic stands at 40 percent in Pakistan. With transportsector in Pakistan growing
with the overall increase in country’s population,
transition to EV should become an imminent
strategy.

Background

Although Pakistan has a meager contribution to total global Green House Gas emissions – less than 1% – but it continues to remain the most vulnerable to climate change hazards and has low technical and financial capacity to adapt to any adverse impacts. Concerns about climate change and adaption to newer technological frontiers led the government to issue a comprehensive Electric Vehicle Policy 2020 for buyers and manufacturers with an aim to encourage investors to invest in EVs such as two to three wheelers, buses, trucks and cars. The benefits of developing EVs are far ranging – from technology acquisition to employment generation (with creation of more than 40,000 technician jobs), and from attracting foreign direct investment to reducing oil import bill to reduce fiscal and budgetary deficits remain as some of the key motivations for the Government.

General Framework of Financial Incentives

As per 2019, there were only 250 plug-in hybrids and full EVs registered
in Pakistan. The government now has an ambitious plan of converting
30% of cars – about one hundred thousand (100,000) and 50% of the five
hundred thousand (500,000) two and three wheelers, into electric
vehicles in the next four years.

What could be a foreseeable impact of EV Policy 2020?

The most significant impact would be savings in the fuel costs. With EVs, the average fuel consumption of motorbikes in Pakistan is Rs. 6,000 (six thousand) which will be reduced to Rs. 1,000 (one thousand). Similarly, the fuel costs of a 650-800 cc cars will come down to Rs. 1200. Another impact would be the savings in the fuel import bill, which is estimated at Rs. 2 billion per annum.
To improve the EV offtake, the Government can offer rebates on capital cost to encourage early adopters. Annual renewal fees may be waived and credits in terms of tax exemptions can be provided to encourage people to opt for EVs. The government may also contribute in terms of financial subsidies, tax preferences, and concessionary credits to promote investment in the sector.

Pakistan’s EV manufacturers

Some of the local significant players in the EV space include:

  1. Karakoram Motors (Dynasty IT electric cars), Karachi
  2. Rahmat Group (for electric cars, two wheelers and buses, in
    cooperation with BYD), Nooriababd, Jamshoro.
  3. Master Motors (has signed an agreement with Changan
    automobiles for selling and distribution of their cars).
  4. Al Haj Automotive Private Limited (FAW holding, Chinese
    company), signed an agreement with Proton, the Malaysian
    company for its distribution and assembling, Karachi.
  5. Topsun Motors electric car company (with Chinese
    collaboration), Jail Road, Lahore.
  6. Jolta International – electric motorcycle (is a subsidiary of a
    Lahore based company Auj).
  7. Sazgar, an electric rickshaw company in Sundar, Lahore

Support for charging infrastructure

As a support for the charging infrastructure, the GOP has set a target of transforming three thousand (3,000) CNG stations to EV charging stations.
Different countries follow different charger configurations according to their charging capabilities. The kilowatt capacity of a charger defines the rate at which the battery can be charged, and it also defines at which place such chargers can be deployed. Easy and affordable access to charging infrastructure, both standard AC and rapid DC charging, is key to supporting EVs growth. Distribution companies, private investors and auto manufacturers will have to play their role in developing the required charging infrastructure. On the other hand, the government also needs to outline policies that support all stakeholders in development of a charging network for EVs.
For electric cars, there are multiple auto manufacturers with different charging configurations. Pakistan’s public charging infrastructure will be driven by players with large market share in future. For the initial five years, there will be a combination of different charging options. Probably medium or semi-fast chargers will dominate the charging infrastructure with CHAdeMO or CCS.
As the density of EVs increases, the next phase will require the installation of fast chargers with higher power ratings. Hyundai recently launched the first electric car IONIQ in Pakistan, which uses CHAdeMO technology. Toyota is marketing its JDM model of Prius Prime (a plug-in hybrid) in the country, also with CHAdeMO technology. New entrants, however, have models that support CCS technology. This could make the case for both CHAdeMO and CCS technology viable options for Pakistan. Going forward, we believe that public-charging infrastructure may be a combination of both of these widely used technologies.

What do industry leaders think about EV Policy 2020?

Raheel Ahmed Liaqat – Sales Manager, ABB Pakistan
 “Overall, the policy looks good. The implementation might take some time due to the new automobile plants adjusting to newer technological standards from currently MOGAS-based cars. Also, there are only a few EV manufacturers, with very limited learning curve to adapt to the newer technology. Overall, I believe ministries will need to put in more effort, so the final draft of the policy is officially released, and the implementation can take place swiftly.
With respect to ABB, we are looking forward to the policy. ABB is already working on the charging solutions in the range of 3kW to 60kW, with all chargers installed in Pakistan are up to 50kW capacity. We have seen the rise in Audis E-tron Quattro sales which are swiftly going up with 250 cars sold and 100 additional orders to be delivered this year. The news of potential collaboration of GM motors and Haier Pakistan for making EVs in Pakistan is also encouraging.
Syed Qadir Jillani, Manager Services & Operations, Porsche Pakistan
 “I appreciate the overall policy but believe that there are a few things that should be finalized before the policy comes out. Overall, Porsche has an electric vehicle market in Pakistan and people have already booked 50 Taycans (Porsche’s EV), with more orders expected in the future. The step to convert 3,000 CNG stations to EV charging stations is also a step in the right direction. We also have our charging station ready and we will take necessary regulatory approvals before deploying it countrywide.”

Muhammad Kamil Quddus, Policy Economist, International Growth
Centre
Electric Vehicle (EV) Policy of Pakistan is a step in the right direction considering the greatest existential threat of our times, Climate Change. Considering this challenge, any measures related to mitigation and adaptation to climate change must be aggressive which is reflective in the target setting of this policy. However, this needs to match with proactive coordination at policy and operational levels of government functionaries. It is prudent to mention that such ecological challenge needs to be utilized as an opportunity whereby switching fossil fuel vehicles to electric vehicles reap benefits not only for the exchequer but also for industry and public, at large.
Targets such as 30% of new vehicle sales for 4 wheelers and 50% of new vehicle sales for 2-3 wheelers by 2030 have great political optics yet obscure us from the core policy objective of “displacement of fossil fuels in general and motor-spirit in particular”. Approximately 25 million vehicles consumer 7.9 million Tonnes of Oil Equivalent (MTOE) currently of motor-spirit. Out of this 25 million, 70% vehicles are 2-3 wheelers consuming ~
43% (3.4 MTOE) of the motor-spirit. Considering this, a shadow policy target could be to set that ‘X’ percentage of motor-spirit be displaced by the year 2030 or 2040. Furthermore, citizens and civil society should start attaching strings to such targets and claims by successive governments on outputs and not on mere symptoms.
Last but not least, the current automobile development policy 2016-2021 and the EV policy 2020 should go hand in hand and the Government should look into the possibility. Smart meters to be utilized as a silver bullet solution in controlling the off-peak usage as well as taking care of overloaded feeders. This serves as a pre-requisite to any operational level penetration of EVs. To ensure that this well-deserved aggressive timeline is met, this pre-requisite needs to be followed up on aggressively.

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