ISLAMABAD: The Ministry of Climate Change is working on a plan of allowing duty-free import of electric vehicles in bulk under the proposed electric vehicle policy, which has raised concern in the local industry that terms it an attempt to kill the industry.
The auto sector falls within the domain of the Ministry of Commerce and Ministry of Industries and Production. However, the Ministry of Climate Change has exceeded its mandate and prepared draft of the Electric Vehicle Policy, which is likely to be tabled in upcoming meeting of the cabinet for approval.
Earlier, the climate change ministry had put the draft on its website but it was later removed after the Ministry of Industries voiced its reservations.
Sources told The Express Tribune that the Ministry of Industries had asked the Ministry of Climate Change not to intervene in affairs of the auto sector, which came under the purview of the industries ministry. However, the Ministry of Climate Change has continued to work on the policy.
Sources pointed out that electric vehicles were expensive, therefore, the Ministry of Climate Change had planned to allow duty-free import of thousands of such vehicles to make the business commercially viable.
However, the domestic industry voiced serious concern, saying the plan would kill the country’s industry, resulting in unemployment for thousands of people. The auto industry has already reduced its production levels because of lower number of orders from customers. Officials pointed out that there was a difference between engines of fuel-powered vehicles and electric vehicles but remaining parts of the two types of vehicles were the same.
There were also fears that the domestic auto parts industry would be destroyed if importers started selling parts of electric vehicles in the country. Adviser to Prime Minister on Climate Change Malik Amin Aslam held a meeting with Indus Motor CEO Ali Asghar Jamali on August 22 where the proposed electric vehicle policy came up for discussion.
The adviser stressed that the government wanted to create a new market for electric vehicles in Pakistan. He was of the view that the Auto Industry Development Policy 2016-21 did not meet requirements of electric vehicles, therefore, a new auto policy would be introduced.
Responding to that, the CEO of Indus Motor suggested that the domestic industry should be encouraged to produce electric vehicles rather than allowing import of completely built units (CBUs) of electric vehicles.
To emphasise his point, Jamali pointed out that the auto industry contributed 3.4% to the country’s gross domestic product (GDP), adding that one-third of a car price went into the national kitty on account of taxes.
When contacted, the Indus Motor CEO told The Express Tribune that the government should give incentives to the local car manufacturers to encourage the production of electric vehicles in the country rather than allowing import of such vehicles.
Imports would result in flight of foreign currency reserves and that policy would have an impact on the local industry and leave many people unemployed. “Therefore, the government should come up with incentives for the production of electric vehicles by the local industry that already has infrastructure in place,” Jamali added.
Published in The Express Tribune, September 1st, 2019.