Key Takeaways
- Pakistan expects 30% of new car sales to be electric by 2030.
- Higher petrol prices are accelerating the adoption of electric vehicles.
- The government is considering tax incentives to boost electric vehicle sales.
Pakistan is set to achieve its ambitious target of 30% of new car sales being electric by 2030, according to government adviser Haroon Akhtar. This goal was announced last year and is now being expedited due to rising petrol prices following the Middle East conflict.
Akhtar stated that the higher cost of petrol, which has increased by 54% since February, is making electric vehicles more attractive to buyers. He noted that consumers are now recovering the additional cost of an electric vehicle within one to one and a half years, compared to the original expectation of two to three years.
Petrol and diesel prices have surged, with the Pakistan State Oil Company Ltd reporting a 54% increase in petrol and a 43% increase in diesel prices. These rising costs are expected to strengthen the economic case for electric vehicles, which could help reduce the trade deficit and inflationary pressures.
However, the transition to electric vehicles is not without challenges. High vehicle prices and limited charging infrastructure are significant barriers. Despite these obstacles, the government is optimistic, citing a threefold increase in electric motorcycle and scooter sales and a doubling of electric car sales in the past year.
To address these challenges, the government is preparing a new auto policy that could be sent to the cabinet within the next two weeks. The policy includes tax incentives to narrow the price gap between electric and conventional vehicles. The draft has been under discussion since earlier this year but was delayed due to negotiations over tariffs and export requirements.
Industry-wide data on electric vehicle sales are not publicly available, but the government is confident that demand is growing. Akhtar highlighted that the policy has been under discussion since earlier this year and is now with Law Minister Azam Nazeer Tarar, who will incorporate the latest recommendations.
The shift to electric vehicles is part of a broader strategy to reduce the country's dependence on imported oil and improve environmental sustainability. While the transition will take years, the government is committed to making significant progress towards its 2030 target.
Higher fuel costs following the Middle East conflict had shortened the time buyers need to recover the higher upfront cost of an electric vehicle.
Haroon Akhtar, Prime Minister’s Adviser on Industries and Production
