Is Pakistan Prepared For EV Revolution?

Do you want to ride and own a vehicle without an engine? Get Ready; Electric Vehicles are the future of automobiles and are available for you, in Pakistan too. It has become a reality today due to new electric vehicle (EV) technology. A revolution has already taken place in the EV world. On a larger scale, a huge transformation is underway in the automobile industry. While Tesla under CEO Elon Musk is leading the revolution, there is a lot of optimism and demand for electric vehicles all over the world. Norway has become first among the equals to jump-start EV demand and sales at such a huge scale and plans to ban the sale of all Fossil Fuel Vehicles (FFVs) by 2025, Netherlands plans to ban such sales by 2030, while France and UK plan to do the same by 2040. Other countries such as China, Germany, Sweden, Canada, and the many US states have announced ambitious plans for EV penetration in their respective locales. 

Pakistan has become a part of the revolution by recently approving a five-year EV Policy. The Pakistan Electric Vehicles Policy 2020-2025 is a new document in the field. The Policy envisaged targeting a robust electric vehicle market having a 30 percent and 90 percent share in passenger vehicles and heavy-duty trucks by 2030 and 2040 respectively. The salient features of the policy include a phased transition of the automobile industry, as it would be covering two and three-wheelers and Heavy Commercial Vehicles (HCVs) providing incentives to manufacturers. The car sector has not been effectively prioritised in this EV Policy, apparently leaving room for further discussion. 

It is being planned that over 3,000 CNG stations are to be transformed into electric vehicle charging stations. Also, 100,000 cars and 500,000 bikes and rickshaws are to be converted to electric vehicles. A question arises, do we have enough electricity in our country to meet the needs of EVs? According to a report prepared by LUMS, Pakistan is going to touch a peak generation capacity expansion of 62,000 MW by 2025 while our peak demand may just touch 40,000 MW. Sparing the outages and seasonal variation, we will still have excess capacity at all times of the year. In fact, if we do not use the spare capacity and do not find new loads for the grid, the capacity payments of unutilized electricity will amount to approximately 1500 billion by 2025. 

Whereas, according to National Transmission and Despatch Company (NTDC), the government plans to develop 120 new power projects by 2040 in a bid to add 74,448 megawatts of production capacity to the system. In the year 2040, Pakistan’s energy demand is projected at 80,425MW while supply will stand at 98,091MW after the addition sparing 17,666MW which can be used by the EV industry, according to the NTDC. 

Heavy annual import Bill, Climate Change, high initial capital cost, unavailability of infrastructure for public charging stations are some of the important challenges Pakistan may face. New and innovative technologies like EV technology are always a welcome step but there is a need for more coherent policy initiatives for stable and sustainable growth. It is expected that the cost of EVs would be comparable with the cost of FFVs (Fossil Fuel Vehicles) by the end of 2025. 

A more focused approach is urgently needed. But the state of affairs with almost no funding to the R&D sector to the attached departments of the Ministry of Science and Technology can be highlighted as a prime source of discontent; this is more important and truer in the context of the new EV Policy. The government needs a more focused approach towards that to make the policy more meaningful and fruitful. Infrastructure development including the charging stations is all the more important for the successful implementation of the EV policy. It will play a dynamic role in employment generation along with a positive impact on the environment in the overall context of socioeconomic changes. 

A new tariff structure and incentive package for the auto industry, promoting EVs, is required to be strengthened further by proper implementation and controlled enforcement. 

The future lies in the EV industry and a country like Pakistan has all the potential to revitalize its economy by prioritizing and promoting the EV revolution in the country.