Luxury vehicles in Pakistan are subject to more than 200 percent import duty, but if the vehicle is fully electric (EV), the import duty is significantly lower. This is a great incentive that is being offered by the government of Pakistan. In the UK or the US, the government offers some cashback or rebate on the purchase of EVs but what we have here in Pakistan makes things more enticing.

For example, a brand new German luxury vehicle that costs approx. 40,000 pounds in the UK will cost about 20 million rupees or more after being imported in Pakistan but currently, a luxury electric vehicle which costs about 60,000 pounds in the UK is costing about 15 million Rupees in Pakistan. For a certain class of people who can afford such vehicles, it is a great opportunity.

The first hurdle was that most people were not sure about how an EV would drive compared to the normal petrol or diesel engine luxury cars. When test drives were offered and vehicles started rolling in, this question was addressed and the answer was, “EVs drive better than their internal combustion engine based counterparts. They are smoother, faster, practically maintenance-free (no oil, no filters, no tuning, no transmission oil) and are much cheaper to run (about Rs. 5-6/km running cost compared to Rs.20-30/ km cost of petrol engine based vehicles)”. The writing is on the wall; if the current incentives continue, luxury EVs will get imported. Currently, the market is dominated by Audi, but Mercedes EQC, Jaguar i-pace and even Tesla should see this opportunity and act fast.

EVs come with a home charging solution which generally gives them a range of about 250-300 kms. This is good for over 95 percent of daily commutes. Another good thing is that generally, homes in Pakistan have 3 phase 400 volts connections so the home solution can top up the vehicle in a very reasonable 2 to 4 hours, depending on how much it was driven on the day.

But there is a drawback. In Punjab, intercity commutes are quite common and with a very attractive network of motorways, it is quite enjoyable as well. For example, the Lahore to Islamabad commute, which is about 400 kilometres is quite common. Similarly, motorway travel to Multan, Sialkot and Faisalabad is also common. At the moment these commutes are simply not possible in EVs because there is no commercial supercharging network. Just imagine that you have a petrol engine based car and there is only one petrol pump, which is at your house.

When Elon Musk started selling his first Tesla Roadster in the early 2000s, the first thing he started off with was the planning and installing of a supercharging network. To explain, without getting too technical, a supercharger or a level 3 or level 4 charger can charge the EV in a matter of a few minutes (15-40 minutes). When these are installed along the motorways and other roads, EVs can be recharged with a stop of 15-40 minutes and the journey can continue.

Although the cost of running an EV is low, the initial cost is staggeringly high. Plus these are luxury vehicles which only a few can afford. Unfortunately, this is the reality at the moment. All popular electric vehicles in the world are in the luxury segment. The simple reason is that the cost of batteries is high and if a vehicle with sufficient driving range is to be offered the price is quite steep. Till the time that the price of batteries drops very significantly, only the luxury EVs will thrive.

It can be argued that there is no reason for the government to offer lower import duties on EVs since it is only being done to facilitate the affluent.

I don’t think that this is really the case.

First of all, there is a significant saving in terms of imported petrol. Even if 1,000 vehicles are imported in the next two years, based on average running a few million litres of fuel will be saved annually. This might not be very significant, but it is a good start.

Another fact is that the government will collect a lot of revenue in terms of import duties, registrations, etc. from the otherwise struggling luxury car segment.

One of the best things that will come out of this is the establishment of a charging network that will eventually generate thousands of jobs. The dead CNG stations can get another lease on their life by getting converted to EV charging stations. Also, the current petrol stations on motorways and other highways can get chargers installed. Now the United Kingdom has over 7,000 EV charge stations which have exceeded the number of petrol pumps for the first time. EV charge stations in Pakistan should also grow rapidly.

As time goes on and cheaper and more efficient batteries are developed, we will start seeing EVs that can replace small cars and transport vehicles and offer an alternate fuel to the population at large.

But the import of EVs must continue with current incentives. The government should also give incentives for people who are interested in establishing charging networks to create jobs and when the more economical versions of EVs start arriving, we have the much-needed charging network and we can rid ourselves of the imported fossil fuel, forever and our cities can breathe a breath of fresh air.