KARACHI: The government should consider all the alternatives along with the option of battery electric vehicles (BEV) before finalizing its Auto Industry Policy (AIP) 2021.
The local industry believes that the government should make all technologies available to the customers instead of singling out any one without proper assessment of its pros and cons.
“One plausible option would be to let the consumer decide which is the best technology for them.”
It is to be noted that the government has already announced the BEV policy 2021 with few policy objectives.
The Auto Policy 2016 is going to expire in June this year. Therefore, the government has to incentivize all other alternatives with BEV; make all technologies available to the customers before announcing a new auto policy to reduce the import bill and vehicular emissions and utilize excess generation capacity.
However, the electric vehicle policy outcome will not yield the desired results alone for the country, said S. M. Ishtiaq, CEO of S.M. Engineering.
He said that BEV undoubtedly was the most efficient and environment-friendly technology amongst all available technologies, but it has its issues.
“BEV from reputed brands will cost at least $30,000 to the country, which will result in the outflow of $600 million in case of import of 20,000 units per year. It will also result in 1.5% increase in the import bill,” he said.
In addition, savings on account of fuel is estimated at $23 million, but the import of $600 million will nullify the same and would also create an additional financial burden of $292 million tax relief, he said.
Moreover, he added that 70% of the country’s actual generation is from fossil fuels (including coal), which roughly emits 0.58 KGs per kWh, so that the emission will be around 120 grams of CO2 K.M.
“Over 30,000 BEVs are estimated to consume 1% of the country’s total generation capacity...translating into Rs11 per kilometer cost to the consumer.
“On the other hand, the hybrid electric vehicle (HEV) cost is Rs5 per kilometer, and the internal combustion engine (ICE) cost is around Rs9.3 per kilometer,” he said.
“Our neighboring country India has offered incentives for both EV and HEV, and the incentives are linked with battery capacity with the cap. At the same time, incentives are also being provided to part makers and OEMs on exports,” he said.
Dr. Nadeem Javaid, a professor of economic policy at the KSBL, said, “There are good reasons for higher adoption of hybrid powertrains globally as it delivers adequately against both the objectives of environment and fuel conservation at a much lesser cost to consumer and economy.”
Copyright Business Recorder, 2021
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