Electrifying transport

Pakistan’s race towards EV adoption just got a major boost, with Prime Minister Shehbaz Sharif announcing a 44 per cent reduction in the power tariff for electric vehicle (EV) charging stations on Wednesday. The power tariff for the charging stations has been reduced from Rs71.10 per unit to Rs39.70 per unit. The tariff cut is expected to significantly lower the operational costs for motorcycles, three-wheelers, small cars, and other EVs. According to the federal minister for power, the costs of running an electric motorcycle will now be three times lower at around Rs33, almost a third of the cost of running a petrol bike. It is estimated that there are currently 10 million motorcycles in Pakistan, spending $6 billion annually on fuel. Converting these motorcycles to electric technology will cost an average of Rs50,000 but will enable a return on investment within three to four months while saving billions of dollars in foreign exchange. Other than a cut in EV charging tariffs, permits for charging stations or battery-swapping points can now be secured within 15 days via an online portal. The registration fee is set at a relatively affordable Rs50,000.

These are the sort of regulations Pakistan needs if it is to achieve its target of 30 per cent EV adoption by 2030. In fact, even with these boosts, the 30 per cent target is a very ambitious one, given just how inundated the country has become with petroleum-based vehicles. The next major step ought to be building out the public transport network and integrating EVs into this shift. Pakistan’s addiction to petrol is, in part, enabled by the lack of an extensive and reliable public transport network, forcing people to rely on petrol vehicles. Emphasising public transport will also help facilitate a shift away from petrol. We are already seeing examples of this approach at work with the numerous public bus services launched across the country in recent years, with many of these services relying on electric vehicles. However, public transport has historically proven to be a tough nut to crack in Pakistan. For example, only 70 of the 160 electric buses reportedly available to the Capital Development Authority in Islamabad are currently functional. There are also only 16 charging stations for these 160 buses, which officials reportedly claim is inadequate for charging all the buses.

Even in terms of private transport, the shift to EVs will not be easy. The federal power minister has called on international organisations, including the World Bank and USAID, and developed nations committed to green climate financing, to play a proactive role in supporting Pakistan’s transition to EVs, particularly when it comes to transitioning two- and three-wheelers towards electricity. Again, history has shown that neither international organisations nor developing countries are all that generous when it comes to ‘green financing’. That being said, the EV charging station tariff cut is a clear sign that the government is on the right track when it comes to the approach towards EVs. This new technology will enable the country to tackle both environmental and economic goals simultaneously, something that will be crucial for Pakistan’s development going forward.