Islamabad, Pakistan, 11/28/2021 / Islamabad News Desk /
For years, Pakistani industrialist Nawabzada Kalam Ullah Khan had planned to replace his family’s gasoline-powered automobiles with electric versions.
But it wasn’t until July, when a series of substantial tax cuts went into effect, that the 29-year-old from Islamabad placed an order for two electric automobiles.
“Someone has to take the initiative to switch to these cost-efficient, environment-friendly vehicles in the face of increasing pollution in big cities – and we’ve done it,” Nawabzada said.
His new automobiles, he claims, now cost around five times less to run on a daily basis than his old ones, providing a strong incentive to make the move.
Major Cities in Pakistan and India are suffering from deadly levels of air pollution, with Lahore being named the most polluted city in the world this week.
The heavy usage of fossil-fuel-powered cars for transportation, along with smoke from seasonal crop burning, exacerbates the problem at this time of year.
However, nearly two years after launching its ambitious green strategy, Pakistan’s electric vehicle drive is gaining up steam, with the government aiming for a statewide shift to 30 percent electric vehicles and trucks by 2030, and 90 percent by 2040.
Significant tax breaks for both electric vehicle imports and imports of components and equipment used to assemble automobiles in Pakistan are key drivers of the move.
According to industry sources, this has helped make the cars more cheap as Prime Minister Imran Khan’s administration presses ahead with its strategy to reduce carbon emissions and urban pollution.
According to Asim Ayaz, general manager of the government’s Engineering Development Board, the general sales tax on domestically built electric automobiles with batteries carrying less than 50 kilowatt hours (kWh) of electricity has reduced from 17 percent to virtually nil (EDB).
At the same time, the customs charge on imported electric vehicle parts, such as batteries, controllers, and inverters, has been reduced to 1%.
The tariff on importing fully built electric automobiles has also been reduced from 25% to 10% for a year, according to Ayaz, who spoke to the Thomson Reuters Foundation.
According to officials, the tax cut is a significant step in implementing Pakistan’s National Electric Vehicle Policy, which was first approved by the cabinet in November 2019.
It intends to introduce 500,000 electric bikes and rickshaws, as well as 100,000 electric automobiles, vans, and light trucks, into the transportation system by 2025.
“Definitely the tax exemptions make the price point (on electric vehicles) competitive,” said Malik Amin Aslam, the special assistant to the prime minister on climate change.
“It makes it extremely attractive for the customer to go electric.”
According to Aslam, if around one-third of new cars produced by 2030 are electric, Pakistan might witness a significant reduction in climate-changing emissions and pollution.
Electric cars presently emit 65 percent fewer greenhouse emissions than those powered by fossil fuels, he claims.
According to IQAir, a Swiss organisation that tests levels of lung-damaging airborne particles known as PM2.5, Pakistan ranks second, after Bangladesh, on a list of nations with the poorest air quality compiled last year.
According to a 2019 research by the United Nations Food and Agriculture Organization, transportation accounts for more than 40% of total air-polluting emissions in Punjab, followed by industry and agriculture.
According to Shaukat Qureshi, general secretary of the Pakistan Electric Cars and Parts Manufacturers and Traders Association, the new tax breaks would save up to 500,000 rupees ($2,900) on imported compact electric vehicles.
He stated that many members of the association took advantage of the incentives to purchase them for the first time.
There are no concrete statistics on how many electric automobiles local importers have ordered since the government announced the exemptions.
However, in his other capacity as chief operating officer of Zia Electromotive, a car firm that imports and produces electric vehicles, Qureshi stated that he has bought 100 compact electric cars from China and expects to import 100 more every month after that.
Pakistanis, like many other people across the world, have traditionally been hesitant to transition to electric cars for a variety of reasons, including increased costs, a lack of charging infrastructure, and “fear of the unknown,” according to Ayaz at the EDB.
The tax cuts help eliminate the cost barrier, he says, and might result in the creation of 20,000 new jobs in the auto sector when Pakistani automotive firms begin manufacturing electric vehicles, he predicts.
The issue of charging infrastructure persists, despite the fact that several firms have already constructed charging stations in major cities and along highways.
According to Ali Tauqeer Sheikh, a climate change and development specialist, the government should encourage the private sector to establish additional charging stations near workplaces, houses, and parking lots.
Car makers and dealers may give buy-back guarantees to alleviate concerns that electric vehicles will have little resale value, he remarked.
However, Sheikh believes that merely selling more electric cars would not suffice to address Pakistan’s emissions and air pollution, because the overall number of vehicles sold – primarily traditional automobiles – continues to rise year after year.
He believes that the government should increase taxes on fuel-powered and hybrid cars in order to totally phase them out, as well as give inexpensive bank loans to those who want to acquire electric vehicles.
“Poor people who use motorbikes and rickshaws deserve to have more electric vehicles on the roads to cut air pollution,” he added.
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