ISLAMABAD: The Ministry of Commerce (MoC) and the State Bank of Pakistan (SBP) are reportedly opposing new incentives to promote Electric Vehicles (EVs) in the country due to financial constraints.
Issues related to the EV ecosystem policy and financing model were discussed at a meeting in the Ministry of Industries and Production (MoI&P) presided over by Secretary Saif Anjum. CEO of the Engineering Development Board (EDB), K.B. Ali, highlighted that the Special Investment Facilitation Council (SIFC) has assigned MoI&P as the lead agency for formulating the EV ecosystem policy. He noted that the initial EV policy was developed by the Ministry of Climate Change in 2019, focusing on climate considerations. To facilitate manufacturing and encourage local production of EVs, a tariff structure for EVs, their charging infrastructure, and necessary inputs were defined in 2020 and incorporated into the Auto Industry Development and Export Policy (AIDEP) 2021-2026. However, the market penetration of EVs remains low due to insufficient charging infrastructure across the country.
Ali Jawad, Advisor at the EDB, presented a detailed overview of the rationale for the proposed policy, the state of the local automobile industry, current EV adoption rates, and proposed incentives. He also highlighted the EV bikes scheme introduced by the Government of Punjab and provided a comparative analysis of EV policies in Pakistan, Indonesia, India, Vietnam, and Malaysia.
Managing Director of NEECA, Sardar Mohazzam, compared various financial rates of EVs with combustion engines and suggested several proposals for accelerating EV adoption. These included increasing the share of EVs in public procurement, fixing the fleet retirement age, establishing fuel economy standards, and introducing blended finance and revolving loans. He recommended a review of the target to establish 10,000 charging stations in the draft policy and emphasized that the policy should promote indigenization while avoiding bulk purchases. He noted that regulations concerning charging infrastructure would be revised by NEECA within the next two weeks.
Muhammad Ashfaq, Joint Secretary of the Ministry of Commerce, stated that new incentives are not feasible under the current macroeconomic conditions and emphasized the need to reduce electricity rates. He proposed that the installation of charging stations should be made obligatory by the National Highway Authority (NHA).
Mehtab Hussain from SBP suggested that the already launched Prime Minister’s Youth Business and Agriculture Loan Scheme (PMYB&ALS) be considered for financing EVs.
The Additional Secretary-1 of the Ministry of Industries and Production indicated that Oil Marketing Companies (OMCs) are interested, but the charging infrastructure regulations are not yet formalized.
After detailed discussions, it was decided to form a Sub-Group led by Additional Secretary-1, comprising representatives from the Finance Division, NEECA, EDB, Ministry of Commerce, and SBP, to deliberate on a financing mechanism for EVs. Ends
