E-Vehicle Policy Will Not Reduce Car Prices In Pakistan?

E-vehicle policy

In Pakistan, the federal government has finally approved the e-vehicle policy. Federal Minister for Science and Technology Fawad Chaudhry has said in a statement that the e-vehicle policy will convert 30% of vehicles in Pakistan to electric in the next ten to fifteen years and will also reduce vehicle prices.

What is an e-vehicle policy?

According to the e-vehicle policy approved by the federal government, no registration and token tax will be levied on e-vehicles made in Pakistan, while only one percent sales tax has been levied to provide incentives to manufacturers. In addition, an initial 15 percent customs duty has been imposed on the import of e-vehicle parts and two-year-old vehicles.

The policy also includes plan to build 3,000 charging stations under the e-vehicle policy.

Will the price of cars come down?

While the e-vehicle policy is being hailed as an eco-friendly and important step towards reducing oil consumption, the government is also claiming that it will also bring down the rapidly rising prices of vehicles in the country. But HM Shehzad, president of the All Pakistan Motor Dealers Association, disagreed with the government’s claim.

Talking to media, he said that no policy is needed to reduce the prices of vehicles but the real culprits need to be dealt with.

Unless the sale of new cars on the black market is stopped, there is no prospect of a reduction in car prices in Pakistan.”

Explaining the reasons for the increase in car prices, HM Shehzad said, “Pakistan consumes one million vehicles annually while manufacturers produce 2.5 to 300,000 vehicles, which creates a huge gap between demand and supply hence, the cars sold on the black market.

“If you go to buy a new car, you are given six to eight months, but if you say I need a quick car, give me a car immediately after paying extra,” he explained. Given that investors are already booked to make a profit.

“It is not possible to sell new vehicles on the black market without the cooperation of the company, dealers, and investors,” he said. The price of cars will never go down unless we increase car production and get our hands on the black market.

Sunil Sarfraz Manj, Chairman, Pak Wheels, while sharing his personal experience, said that the ground realities of Pakistan have to be taken into consideration before electric vehicles. “The e-vehicle policy will reduce the prices of electric vehicles in Pakistan to some extent but will not affect the prices of other vehicles because the biggest problem is the charging stations. You will have to install stations everywhere but all even at faster- charging stations it takes more than an hour to charge the car and it is not possible for the common man to stand for hours to check the car, charge in-house, and sometimes the power goes off. There is a problem with voltage as well in Pakistan.

Sunil Sarfraz also termed the government’s target of installing 3,000 charging stations as unrealistic. “We can’t go to electric unless we get this facility everywhere, in parking lots, hotels, etc.”

He hoped that after ten years, 3 to 5 percent of electric vehicles would appear in the market in Pakistan and this could reduce the price of vehicles by up to 10 percent. “Right now these are elite cars. Unless we make them easy for the common man, the fruits will not come. Ten years later, some cars will come on the market when local manufacturing starts and it can bring down prices by ten percent.”, He added.

According to HM Shehzad, president of the All Pakistan Car Dealers Association, the three largest manufacturers in Pakistan do not even have e-vehicle manufacturing plants and would never want car prices to fall here because the Pakistan auto industry is goldmine for them.

Shaukat Qureshi, Secretary-General, Pakistan Electric Vehicles, and Parts Manufacturers Association, is hopeful that the fruits of the e-vehicle policy will begin to reap in five years. “In 2024, the three major companies currently assembling in Pakistan will also start producing e-vehicles, after which people will start coming to this technology to a large extent.”

According to Shaukat Qureshi, e-vehicles have now become a status symbol in Pakistan. And the vehicles that are available are one and a half crore vehicles but the highest demand of the common man in the market is for less than 1000cc vehicles. And it is meeting 75% of the market demand.

He thinks that electric vehicles like less than 1000 cc vehicles will be available in Pakistan for Rs. 15 to 17 lakhs, and charging of these vehicles will not be a problem as small vehicles are working on ‘plug-in’ technology and Can be charged anywhere, be it home or special charging station. Larger vehicles will need charging stations of course, but when there are more manufacturers, there will also be more charging stations.

According to Shaukat Qureshi, 4,000 to 5,000 vehicles will arrive in Pakistan in 2021, which will increase to 30,000 in the next three to four years. But when local production starts, the vehicles will be cheaper and fewer cars will be imported. “The biggest revolution will be the introduction of electric buses, which will reduce oil consumption the most, and the bus manufacturing plant in Pakistan will start operations next year. Moreover, electric buses will be imported from China by February, which will reduce environmental pollution and fuel consumption significantly.

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