Industry seeks ‘Made in Pakistan’ electric vehicles

Officials of the local automobile industry have called for adopting a “Made in Pakistan” approach by policymakers in the national electric vehicle policy in order to pave the way for an enabling environment for the local original equipment manufacturers.

They have emphasised that a few amendments to the policy are direly needed in order to promote and sustain the manufacturing of hybrid and electric vehicles in Pakistan.

For quite some time, the government has been promoting hybrid and electric vehicles (HEV), plug-in hybrids and battery-powered electric vehicles. As part of the Finance Bill 2020, the government has included electric auto rickshaw, three-wheeler electric loaders and electric motorcycles in the Electric Vehicle Policy 2020, under which 50% duty would be charged for five years under the Customs Act, starting from fiscal year 2020-21.

Moreover, 1% duty will be applicable to electric buses, trucks and mowers.

The government has taken an environment-friendly approach and aims to shift at least 30% of vehicles to electricity by 2030. To achieve this, “it is encouraging local manufacturers to invest in the production of hybrid technology to mitigate the risk of climate change and ease the pressure off oil imports,” said a local auto manufacturer while talking to The Express Tribune.

“In order to promote and sustain the local manufacturing of hybrid vehicles, we need a few amendments to SRO 656(1)/2006,” he emphasised.

Pakistan’s first-ever National Electric Vehicle Policy 2019 was approved by the cabinet in November 2019. The government views it as a forward-looking step needed to deal with climate change concerns emanating from vehicle emissions with rapidly rising use of cars and other vehicles.

Furthermore, it will help reduce the overall oil import bill and the operational cost of vehicles for consumers.

“New HS codes should be created for specific parts of hybrid and electric vehicles, plug-in hybrids and battery-powered electric vehicles falling under PCT heading 87.03 and 87.04 for completely knocked down (CKD) kits manufacturing at 10% customs duty,” said Tecnopack CEO Aamir Allawala.

“In addition to this, a few more amendments are needed to promote the growth of local manufacturing of hybrid and electric vehicles.” The auto parts manufacturer pointed out that SRO 587 granted 50% sales tax exemption to imports and subsequent sales of completely built units (CBUs) of hybrid and electric vehicles.

He urged the government to extend a similar benefit to the locally produced hybrid electric vehicles, plug-in hybrids and battery-powered electric vehicles by amending the SRO.

“All locally produced hybrid and electric vehicles, plug-in hybrids and battery electric vehicles should be exempted from federal excise duty irrespective of their capacity,” he stressed.

Published in The Express Tribune, August 14^th, 2020.

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