Incentives unlikely to whet appetite for electric cars

Country already faces shortfall of up to 5,000MW of electricity in summer

KARACHI: Although the government has given several relaxations to promote the use of electric cars in the country, the market seems indifferent to the facilitation.

In order to encourage the use of renewable energy and to reduce carbon emissions, the Economic Coordination Committee (ECC) has allowed import of up to five-year-old electric vehicles, under personal baggage, transfer of residence and gift schemes, instead of three.

In the budget speech for fiscal year 2018-19, former finance minister Miftah Ismail had proposed the withdrawal of 16% customs duty on charging stations for electric vehicles, which was later accepted by parliament.

Customs duty on the import of electric cars has also been reduced from 50% to 25%, in addition to exemption from 15% regulatory duty. Import duty on completely knocked down (CKD) kits for the assembly of electric cars stands at 10%.

According to the International Energy Agency (IEA), sales of electric cars around the world rose 54% in 2017, taking global stock to three million, AFP reported recently.

According to the report, in China, sales grew about half and its market share remained thin at 2.2%. However, in Norway, electric vehicles by far have the world’s highest market share with 39.2%, according to the IEA. The Paris-based agency was optimistic about the sector’s prospects.

Electric vehicles use batteries instead of petrol or diesel, thereby massively reducing damage to the environment.

However, according to All Pakistan Motor Dealers Association Chairman HM Shahzad, the facilitation measures for electric cars will not help unless concrete steps are taken.



“We don’t have enough electricity available in the country to meet the present demand. So, I don’t think the government’s initiative will be helpful. I think some concrete steps need to be taken and proper electricity infrastructure is needed to promote electric cars,” Shahzad told The Express Tribune.

He clarified that he did not doubt the government’s intentions to promote environment-friendly cars, but under the present situation, these initiatives would not help in any way. Pakistan faces a shortfall of 4,000 to 5,000 megawatts of electricity in summer.

The government’s decision has come at a time when several new players are gearing up to enter the auto industry of Pakistan by taking advantage of the auto policy announced in 2016.

These measures are in addition to the incentives given in the Auto Industry Development Policy for 2016-21 that has been widely praised.



Kia, Hyundai and SsangYong Motor Company of South Korea, Germany’s Volkswagen, France’s Renault and Japan’s Nissan have announced plans and formed partnerships to enter Pakistan’s auto market, most probably in the next one year.

Local importers like United Motors and Sazgar, the manufacturers of two-wheel and three-wheel vehicles, have also made plans to enter the country’s lucrative four-wheel industry. Market talk suggests that a new entrant is aiming to introduce electric cars and the government’s budget measures are also expected to encourage existing manufacturers to enter this arena.



“Electric cars are the future of the auto industry,” remarked Wasif Safdar, who imports used cars for resale and runs a car showroom at the University Road.

He said a few used Nissan Leaf electric cars were earlier brought to Karachi Port, but because of the high duty, the importers defaulted on payments and the cars were later auctioned.

Published in The Express Tribune, June 6^th, 2018.

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