KARACHI: Pakistan’s Minister for Science and Technology has said international electric vehicle manufacturers, including MG Motors of the UK, were setting up facilities in Pakistan while local companies would be incentivized to switch to EV manufacturing.
Pakistan’s top economic body, the Economic Coordination Committee (ECC), approved a new electric vehicles (EV) policy last week, with the ECC decision expected to be ratified by the Cabinet on Tuesday, today.
Under the new plan, Pakistan aims to reduce emission of greenhouse gases through the introduction of electric cars, trucks, buses, motorcycles and rickshaws.
Air pollution is a long-standing problem in Pakistan where cars are the top pollutants.
“The plant of MG [Morris Garages] Motors [UK] is almost ready while [Malaysia’s] Proton is also coming for electric vehicle manufacturing,” Chaudhry Fawad Hussain, federal minister for science and technology, told Arab News on Monday. “We will encourage Toyota and Honda to come for electric manufacturing here,” he added, saying he expected “on-ground progress” within a year.
An EV manufacturers body said some 24 new makers were ready to invest in local manufacturing.
“Nine manufacturers of four wheelers and 15 manufacturers of two and three wheelers are ready to establish local manufacturing facilities,” said Shaukat Qureshi, the general secretary of the Pakistan Electric Vehicles and Parts Manufacturers and Traders Association (PEVPMTA). “Local manufacturing will reduce prices and save up to 60 percent on fuel.”
Minister Hussain said he had proposed setting up a regulatory board for the development of EVs, aimed at switching 25 percent of vehicles to electric engines in the next five years.
“I am giving suggestion for the constitution of an EV Development Board to regulate electric vehicles in Pakistan,” Hussain said. “We will move a summary, after the approval of EV policy from cabinet, for the formation of the EV Development Board.”
“We understand that the EV policy which we have introduced, it would bring a big shift from combustion engine to electric engine that will have environmental benefits,” Hussain added.
Hussain said his ministry had proposed abolishing import duty on electric vehicles for a year.
“That will have dual benefits: first the on-money [the high price charged from customers over and above the invoiced price] will be eliminated and, second the culture of electric vehicles will develop in the country,” the minister said.
Pakistani customers currently have to pay between Rs 25,000 to Rs 1.1 million as on-money on the purchase of various brands of locally assembled cars while deliveries take more than 4 to 8 months from the scheduled dates, according to the All Pakistan Motor Dealers’ Association.
The new policy, which will remain in force till June 30, 2026, imposes only one percent customs duty (CD) on auto parts used in assembling vehicles, and zero Additional Custom Duty (ACD) or Regulatory Duty (RD) and Value Added Tax (VAT) on EV specific parts for Completely Knocked Down (CKD) units, which are automobiles assembled at a local manufacturing facility.
Customers of electric vehicles will pay 25 percent import duty on the import of Complete Built Units (CBUs), or automobiles that are assembled in other countries and imported. Manufacturers will be given the incentive of duty-free import of plants and machinery.
Import of CKD in small cars and sport utility vehicles (SUV) with 50kWh battery or below, and Light Commercial Vehicles (LCVs) with 150kWh battery, would be exempted from sales tax and VAT and one percent tax on sales would be charged, as per the new policy.
