Govt unveils NEV policy to boost EV adoption; subsidies announced

ISLAMABAD: The government announced its New Energy Vehicle (NEV) policy on Wednesday, aiming to transition 30 per cent of all new vehicles in Pakistan both imported and locally manufactured to electric power by 2030.

Minister for Industries and Production Rana Tanveer Hussain unveiled the policy which includes electric vehicles (EVs) and alternative energy sources like hydrogen.

The policy offers subsidies of Rs50,000 for electric motorcycles and Rs200,000 for rickshaws with Rs4 billion allocated for these subsidies.

Financing options include a reduced policy rate from 22 per cent to 15 per cent, with monthly payments of Rs9,000 over two years, backed by a Credit Loss Guarantee from the Finance Division.

The government will also provide free electric bikes to 120 top-performing students and reduce duties on EV components to make companies to focus on local production of battery-powered cars.

On the flip side, the Pakistan Automotive Manufacturers Association (PAMA) has few concerns and warns that allowing import of completely-built-units (CBUs) at reduced duties could harm the local auto industry.

They recommended prioritising local manufacturing under specific regulations and suggested extending the current incentives for hybrid and plug-in hybrid vehicles until 2030

PAMA also proposed aligning incentives for NEVs with conventional vehicles and including renewable energy vehicles, like those running on biogas, in the policy.

The association called for long-term measures to protect the local industry while supporting Pakistan’s transition to cleaner energy sources.

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