Policy without governance is like a phone charger without a socket in sight, or a portable power bank in hand, or more appropriately a socket right in front of you but with no electricity. Perhaps, a better analogy could be inserted here, but the idea remains the same. A policy is merely a piece of paper without its effective implementation. Over the years, both good and bad policies were introduced and subsequently never saw the light of day. Many did, for better or for worse. The Auto Development Policy 2016-21 is one of the good ones which despite considerable push back from several quarters did see light of the day and materialized into substantial auto investments into the country. Now there is a new policy in town—this one on electric vehicles—and there are three questions that need to be answered: do we need electric vehicles in Pakistan? Is it a good policy? And can this policy be implemented in its existing form?
Let's first address the first query. Globally, the race toward electrification and cutting down the carbon footprint is in full force, though a lot of i's need to be dotted and t's need to be crossed (read more: "Electric dream", July 12, 2019). In Pakistan, climate change threats have suddenly become relevant as cities are getting choked and government is grappling in the aftermath. As earlier cited: According to the National Economic and Environment Development Study, Pakistan will double its emissions next year and further double it in the next ten years, emitting not only carbon but other hazardous compounds including sulphur dioxide, nitrogen dioxide and so on.
Moreover, as a net importer with majority of the imports concentrated in fuels, cutting down on oil and gas imports wherever possible seems like a prudent move. As per the Economic Survey, Pakistan utilizes 57 percent of liquid fuel towards the transportation sector while 33 percent is used in the generation of electricity. Turning away from Fossil Fuel Vehicles (FFV) to Electric Vehicles (EV), would help cut the import bill for one. Same is the case with gas and the usage of LNG and RNLG. The government believes it could save on $2 billion in imports.
Going into electric vehicles is also possible now since Pakistan has the ability to generate electricity in excess. It would be best to utilize it given Pakistan has to pay capacity payments for the plants whether they are being put to use or not.
Another case could be made for electric vehicles due to their attractive costs for end-users. Mind you, capital expenditure required to put electric vehicles on the road are massive. However, once bought, the cost of running EVs is considerably cheaper. A study conducted by LUMS calculated that, while "FFVs run one kilometre for ten rupees with the present fuel cost, an equivalent EV can cover the same distance using only three rupees at the current domestic electricity rates". The study was published earlier this year. The study further argues that while capital costs are high right now, they are expected to reach parity with FFVs over the next few years.
All these make a strong case for moving toward EVs and joining the rest of the world in cutting down the use of combustion engines. But this was an easy question to answer. The second and third questions require further analysis which we will address later in this space