Ministry of Industries and Production (MoI&P) has reportedly decided to formulate first Electric Vehicles (EV) Policy for cars, motorcycles and Rickshaws etc instead of only for cars without hurting existing industry which is already in trouble, well informed sources told Business Recorder.
The world is fast moving towards an electric mobility revolution. Some countries have gone as far as to announce plans to completely halt the sale of Fossil Fuel Vehicles (FFVs). Norway plans to ban sale of all FFVs by 2025, Netherlands plans to ban such sales by 2030, while France and UK plan to do the same by 2040. Other countries such as China, Germany, Sweden and many US States have announced ambitious plans for Electric Vehicle (EV) penetration in their respective locales.
The objective of the EV policy are as follows: (i) mitigate climate change through a reduction in emissions from transport sector; (ii) encourage auto and related industry to move forward local EV manufacturing; (iii) forge links with the global value chain for export potential of EVs and their parts ;(iv) employment generation through green economy initiatives; (v) reduction in oil import bill; (vi) use of electricity in off-peak times for useful purposes; and (vii) develop affiliated industry as battery manufacturing, charging infrastructure etc.
According to the initial draft, Provincial Governments will be asked to make registration of EV licence plate acquiring process easier for local manufacturers. Work on lowering the EV cost of raw material (imported /local) by subsidizing the category e.g. batteries, solar so local industry can be developed and can become independent. This will happen if the federal government lowers the Custom Duty imposed on the raw material/ components and raises/restricts the finished goods products imported into Pakistan. Federal Board of Revenue (FBR) will also be taken on board with respect to taxation policy.
The draft policy will also give a detailed plan for development of infrastructure (battery charging units) so it becomes reasonable in terms of cost-benefit analysis for EV early adopters. For this purpose, Power Division will also be taken on board with respect to fixation of reasonable and attractive tariff for the EVs.
Provincial Governments will provide loans via private financial institutions to EV customers especially for 3 wheelers so the rickshaw drivers (which are part of lower income bracket) can be a part of the "Green and Clean mission of Pakistan". The government is also expected to implement "vehicle replacement assistance program" which issues tax credit to EV owners.
With respect to development of infrastructure in rural areas - charging units and federal grants or loans in rural communities will also be granted to increase EV ownership by lowering barriers to adoption for rural customers (lower income bracket).
To implement clean air Act's at the national level and air quality standards, bigger cities i.e. Lahore, Karachi and Islamabad will be assigned target air quality index YR2025 by implementing EV credits. The EVs' consumers will be asked to apply sales tax credit on EV purchase in the initial phase.
An EV policy drafted by the Ministry of Climate Change, the electric vehicle policy prepared by the Ministry of Climate Change has set multiple targets including the sale of 100,000 electric cars, vans, jeeps and small trucks in the next five years. The Ministry aims to increase the number to 60,000 electric vehicles sold annually by 2030.
According to the long term targets set in the policy, production targets for vehicles in the two, three and four wheeler category have been set at 500,000 units with companies given access to the market within the next five years. By 2030, the target has been set at 900,000 units and by 2040 the target is 90% of sold vehicles.
The incumbent government has started work on EVs after Prime Minister Imran Khan directed the authorities concerned to ensure conversion of 30 percent of all cars running in the country into electric vehicles by 2030. The PML (N) government in its federal budget 2018-19 had reduced customs duty on the import of electric cars from 50 percent to 25 percent, in addition to exemption from 15% regulatory duty, and fixing import duty at 10 per cent on CKD.
Copyright Business Recorder, 2019
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