Pakistan Govt offers incentives to promote electric vehicles

Special rates for import of equipment as well as 1% GST will encourage manufacturers and consumers alike

The federal cabinet has approved several incentives for promoting electric vehicles (EV), including special tax rates on imports and local manufacturing of parts and vehicles. The incentives will remain in place until July 2026. The government has an ambitious plan to increase the number of electric vehicles on Pakistan’s roads in the next few years. The steps are in line with the government’s policy for a cleaner and greener Pakistan.

Pakistan already has five domestic electric vehicle manufacturers who recently formed the Pakistan Electric Vehicles Manufacturing Association (PEVMA). These manufacturers have made a significant investment in the sector and mainly are partnering with established international automobile companies.

Tax cuts, customs duty relaxation on 4-wheeler EV import

Many incentives have been approved for the EV import. Manufacturers, assemblers, and suppliers in the EV and related infrastructure industries will have an effective 1% GST for 50kwh and 150kwh vehicles made in Pakistan, a massive cut from the 17% current rate on almost all other industries. The plants and machinery imported for EV manufacturing will be zero-rated.

Charging equipment imports will have a 1% import duty. Charging dock operators will get special electricity rates to encourage investors to invest in these facilities. The buyers of EVs will also benefit with no registration and renewal costs for the residents of Islamabad. It will be a good idea if this facility is extended to other major cities in the country.  

Critical features of EV policy

Pakistan’s vows to shift to 30% electric vehicles by 2030

Pakistan’s government wants have to 30% of all vehicles on the road to be electric by 2030. It is an ambitious plan that will need a lot of continued support from the government. This will only be achieved if the government continues to offer special tax rates for such vehicles and facilitates that manufacturing in Pakistan.

The advancement in battery technology is also crucial since current electric vehicles are more suited for shorter distances. Better batteries will allow people to drive over long distances and encourage the sales of these automobiles.    

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