Socio-Economic prospects of Electric Vehicle (EV) Policy 2019 and EV market preparedness of Pakistan

Socio-Economic prospects of Electric Vehicle (EV) Policy 2019 and EV market preparedness of Pakistan

Donor

TARA Foundation.

Duration

October 2021 to May 2022.

Introduction

Currently, the transport sector of Pakistan is entirely based on imported fuels that is a major threat for country’s trade deficit. As of January 2022, the trade deficit of Pakistan surged to $24.79 billion in the first half due to 63% increase in year-on-year basis. With the projected increase in travel demand, this deficit is expected to provide a major burden for the national exchequer. Between 2013 and 2018, it accounted for 76% of total oil consumed in the country. Transport accounts for 40% of air pollution in the country.

In 2019, Pakistan had to spent over $13.3 billion dollars on import of oil, and this cost is expected to cross over $30.7 billion by 2025. In later half of 2021 and first quarter of 2022, Pakistan has already seen a marked inflation in price of both petroleum and gas products, and the limited supply not only affects the transport, but also industrial and power sector. In Pakistan, transport is the major source which consumes around 47% of all imports. Therefore, given this pace and the growth of sector, Pakistan could face major challenges of financial cost and production charges. Under these circumstances, transition towards EVs can reduce oil dependency which reduces the burden on national exchequer. Research indicates that even electric vehicles are charged using coal and other fossil fuels, this shift can reduce Pakistan oil import by 25-40%. Further, due to other tangible benefits such as low service requirement and use of lubricants, it reduces the dependence on other imported petroleum products as well.

In 2019, Pakistan launched its Electric Vehicle policy which was aimed at a planned transformation of the auto industry. These initial years are divided into market development and public awareness through incentives and subsidies on EVs especially to companies that want to invest here. For penetration of EVs, the policy has mentioned the targets to achieve 30% sale of EVs by 2030. However, given the current landscape, there is a need to critically analyze the market readiness and socio-economic impacts this transition will have on Pakistan.

Objectives

Under this project, we aim to achieve the following:

· To benchmark the policy support for Electric vehicles in Pakistan with global models and best practices.

· To analyze the market and industry readiness for Electric Vehicles in Pakistan and recommend a way forward for industrial support in upscaling the EVs infrastructure.

· To model the socio-economic impacts of EV penetration under different scenarios of Industrial growth through Low-Emissions Analysis Platform (LEAP)”.

Research Outcomes

The research outcomes of the project include

1. A “Working Paper” on “Socio-Economic prospects of Electric Vehicle (EV) Policy 2019 and EV market preparedness of Pakistan”.

Status

On-Going