The Pakistan Institute of Development Economics (PIDE) has urged the government to prioritise EV exports to maximise economic benefits and address challenges in the domestic adoption of EVs. In its policy advice, PIDE recommended targeting the export of 10% of EVs and 5% of auto parts produced in Pakistan by 2030, with a long-term goal of exporting 50% of EVs and auto parts by 2040.
This recommendation aligns with the Prime Minister’s directives to implement a robust EV policy aimed at reducing oil imports and improving Pakistan’s current account balance. According to PIDE, transitioning to EVs presents a dual opportunity: reducing emissions to protect the environment and enhancing economic stability by curbing import costs.
However, achieving these targets faces significant hurdles. PIDE highlighted numerous challenges to the EV transition in Pakistan, including:
- High Production Costs: Dependence on imported components, high tariffs, and a lack of allied industries keep production costs elevated.
- Limited Vehicle Ownership: Only 6% of households own passenger cars, with motorbikes dominating vehicle ownership. The high upfront costs of EVs make them unaffordable for middle- and low-income groups.
- Infrastructure Gaps: Limited charging stations and long recharging times deter EV adoption.
- Manufacturing Limitations: Pakistan’s nascent EV technology and localised production processes leave it isolated from the global automotive value chain, impacting the quality and scale of production.
PIDE noted behavioural challenges as well, with consumers needing to adapt to the longer recharging times compared to conventional refuelling.
To address these barriers, PIDE called for a comprehensive long-term EV policy with clear milestones:
By 2030, 10% of new four-wheelers and 25% of new two- and three-wheelers sold should be EVs.
By 2040, these targets should rise to 50% for four-wheelers and 75% for two- and three-wheelers.
The think tank also emphasised the importance of reducing costs, improving infrastructure, fostering behavioural shifts, and integrating local manufacturers into the global value chain.
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