Govt set to launch Rs4b EV scheme

Aims to promote green transition with focus on women, local manufacturing

ISLAMABAD:

The government is expected to announce a Rs4 billion package to introduce 42,000 electric vehicles (EVs) – including 40,000 two-wheelers and 2,000 three-wheelers – by offering loans at discounted rates under the proposed EV policy, sources told The Express Tribune. A 25% quota will be reserved for women, while the remaining 75% will be allocated for general use. The grant is likely to be announced in the upcoming budget.

The maximum loan available will range between Rs250,000 and Rs1 million, with banks charging an interest rate of KIBOR plus 3%. The same interest rate will be passed on to consumers as a subsidy. A steering committee that met on Tuesday reviewed these proposals.

Under the new policy, the government will also provide EV charging infrastructure. According to sources, standards and regulations will be introduced by the National Energy Efficiency and Conservation Authority (NEECA). The National Electric Power Regulatory Authority (NEPRA) will announce a preferential tariff, facilitated by distribution companies (DISCOs). The initial priority for charging stations will be along major highways, including the Motorways, Grand Trunk (GT) Road, N-65, and N-70. Oil marketing companies (OMCs) may be encouraged to use their corporate social responsibility (CSR) funds for this purpose.

The plan includes establishing battery-swapping stations for three-wheelers in major cities and transitioning government procurement, particularly two-wheelers, to EVs.

In terms of demand incentivisation, the government may introduce concessional credit for buyers and investment credits to promote EVs. Additionally, a New Energy Vehicle Fund (NEVF) may be set up to finance EV adoption, along with seed funding provided by the government of Pakistan. The government is also considering leveraging proceeds from levies on conventional vehicles and a Green Fund for climate finance opportunities.

The Punjab government recently launched a scheme to subsidise EVs and is reconsidering its incentive structure to promote local manufacturing and early adoption.

According to a statement, the steering committee aims to finalise the National Electric Vehicle (NEV) policy within a month. Minister for Industries and Production, Rana Tanveer Hussain, chaired the inaugural meeting of the Steering Committee on Electric Vehicles, which was also attended by Energy Minister Sardar Awais Ahmad Khan Leghari, Secretary for Industries and Production Saif Anjum, and senior officers from various ministries and departments. The minister stressed that the new policy should prioritise energy efficiency and the transition to clean technologies in the automotive sector.

The next meeting of the committee is scheduled for next week. The prime minister has directed the steering committee to develop a comprehensive policy to promote local manufacturing and early adoption of EVs, including new energy vehicles (NEVs), to ensure a sustainable transport system in Pakistan. The policy will also focus on promoting energy efficiency and transitioning to clean automotive technologies.

The steering committee will regularly update the prime minister on progress, with the Ministry of Industries and Production organising periodic meetings and providing secretarial support. The committee is expected to submit its final recommendations by the end of November.

Key responsibilities of the committee include guiding the development of a comprehensive EV policy, creating a nationwide plan for deploying charging stations (especially fast-charging stations) at key highway and urban locations, and overseeing the replacement of conventional vehicles with EVs in the federal government. The committee will also recommend an appropriate tariff structure for charging stations and a robust tariff and duty structure to encourage local manufacturing and early adoption of EVs.

Additionally, the committee will align policy with national climate change goals, focusing on reducing carbon emissions and promoting the use of clean energy in the transportation sector. Public awareness campaigns will be launched to highlight the environmental benefits of EVs and their long-term cost savings. The committee will also develop a financial structure for demand incentivisation through grants provided in the federal budget.