Pakistan’s Electric Vehicle Landscape

Pakistan’s Electric Vehicle Landscape
Ayesha Majid & Mome Saleem

With a share of around 78.5 percent of the country’s total demand, the transport sector is a major consumer of petroleum products in Pakistan. Consequently, the sector accounts for 23 percent of the country’s total GHG emissions. Drastically cutting down the use of fossil-based fuels to meet the climate goals will, therefore, be impossible without decarbonizing transportation in the country.

Electrification of vehicles can play a crucial role in this regard as EVs have a lower energy requirement than Internal Combustion Engine (ICE) based vehicles thus reducing the demand for oil. Moreover, projections suggest that even a high market penetration rate will not lead to significant rise in the country’s power or fuel till 2030. Thus, electrification of vehicles will not create major challenge for electricity grid network in Pakistan in the near future. In fact, it is estimated to reduce the overall oil import bill if penetration is high. However, to truly decarbonize the sector, electrification needs to be aligned with production of clean energy. Leveraging the Alternative and Renewable Energy (ARE) Policy 2020, which aims to increase the share of ARE in total power supply to 20% by 2025 and 30% by 2030, thus presents a potential to transition towards renewable energy sources and simultaneously reduce the country’s overall carbon footprint.

Pakistan’s National Electric Vehicle Policy aims at capturing 50 percent of all the new sales of 02 & 03 wheelers (electric motorcycles, scooties, rickshaws, scooters, and loaders), and 30 percent of all new sales of cars and trucks by 2030. According to Engineering Development Board (EDB) of Pakistan, between 2021 and Oct 2023, around 25,736 two & three wheelers were produced whereas 1,663 four wheelers were produced. Currently, there are around 34 EDB-approved manufactures of 02 & 03 wheelers in Pakistan.

The EV policy is more ambitious vis a vis the 02 & 03 wheelers as compared to cars because:

• The 02 & 03 wheelers form a major segment of the vehicle fleet, especially in cities, as there is a lack of integrated public transport, and the huge price differential as compared to cars makes them a cost-effective alternative. The average annual growth rate of 02 & 03 wheelers in Pakistan is around 8.3 percent, and it is projected to grow at a similar rate in future. Motorcycles alone consume around 40 percent of the total gasoline requirement. Thus, electrification of this segment has the potential to reduce the demand for fossil-based fuels and the resultant emissions.

1. 1. https://www.finance.gov.pk/survey/chapters_23/14_Energy.pdf
   2. https://www.pc.gov.pk/uploads/downloads/policy.pdf
   3. https://www.undp.org/sites/g/files/zskgke326/files/migration/pk/Scaling-Up-Electric-Mobility-in-Pakistan.pdf
   4. https://www.mocc.gov.pk/SiteImage/Policy/EV%20Policy%20Final.pdf
   5. https://nepra.org.pk/Policies/ARE_Policy_2019_-_Gazette_Notified.pdf
   6. https://www.mocc.gov.pk/SiteImage/Policy/EV%20Policy%20Final.pdf

• Almost all the 02 & 03 wheelers are manufactured in Pakistan as opposed to the ICE-based cars which are dominated by international companies. The availability of parts is also quite reliable and cost-effective for 02 & 03 wheelers because of the scale of the existing local industry. To this end, the potential for replacement and conversion of existing fleet is also easier and less expensive as compared to cars. The use of swappable batteries to avoid long charging time is thus being explored as a low hanging fruit as it can be more easily adopted for 02 & 03 wheelers as compared to cars. Charging stations for swappable batteries are being set up in Lahore.

Factors for Long-term Success in the EV Sector
To accelerate the transition towards EVs in all the segments, especially the public transport facilities which have a lower footprint than individual vehicles, the following aspects need to be prioritized:

1. Policy: There is still a lot of uncertainty regarding licensing, taxation, duties, operation of charging stations etc. It is important to have a consistent and proper regulatory framework which ensures stability to investors and other market players. The government should also focus on encouraging indeginous manufacturing and after sales services for all types of EVs instead relying on import-based models as that would simply add to trade deficit. The policies should also make it attractive for consumers to change their preference and opt for EVs instead of ICE based vehicles. In addition, electrocution of mass transit facilities should be prioritized.
2. Infrastructure Development: It is imperative that the required infrastructure to facilitate adoption of electric vehicles is developed. This includes a robust network of charging stations and battery-swapping facilities for short and long routes. It also entails strengthening the electricity distribution network to ensure smooth and uninterrupted electricity supply o encourage potential EV owners hesitant to make the switch from conventional vehicles. Policy around installing charging infrastructure at homes, offices, etc. also need to be explored.
3. Partnerships: To encourage development of indeginous EVs and charging infrastructure, the government will need to encourage entrepreneurship and public private partnerships in the sector. This would entail favorable terms for financing and taxing, transfer of knowledge and technology, and operations.
4. Research & Development: To maximize the benefits of EVs, research and development facilities are required to explore indigenous development of technologies for EVs and the associated services in the short, medium and long term. The findings should be used to encourage enterprise development and expanding the export potential in the sector.