Wednesday September 22, 2021

Govt plans incentives for new entrants in electric vehicle push

July 30, 2021

ISLAMABAD: Pakistan is set to offer fresh incentives to firms planning investments in electric vehicles (EVs) production in the country in its new auto policy due next year, a government said on Thursday.

The country’s efforts to promote EVs to reduce its oil dependence and cut pollution have been stymied so far by a lack of investment and weak demand.

A new policy, however, has been under discussion to provide a more focused approach and incentives for carmakers and suppliers over a five-year period to drive large investment in the sector. Shaukat Tarin, finance minister underscored the importance of EVs and affirmed to provide incentives for developing EV market in Pakistan including EV charging infrastructure.

"The promotion of EVs will reduce dependence on oil import bill and promote environment friendly options," Tarin said at a meeting held to review a draft Auto Industry Development and Export Policy (AIDEP) 2021-2026.

Federal Minister for Industries and Production Khusro Bakhtiar, Advisor to the PM on Commerce Abdul Razak Dawood, SAPM on Finance and Revenue Waqar Masood, Secretary Finance Division, Secretary Commerce, Secretary M/O Industries and Production, Chairman FBR and other senior officers participated in the meeting. Industries and Production secretary briefed the participants about the salient features of the draft AIDEP 2021-26.

The vision of the Auto Industry Development and Export Policy (AIDEP) shall be to make Pakistan a hub for competitive manufacturing of auto parts and vehicles for local markets as well as for exports. The key focus is to strengthen the competition within locally manufactured vehicles in order to provide high quality vehicles at affordable prices to the consumers in the country.

It also includes an increase in export of automobile parts and vehicles to earn a valuable foreign exchange. In his remarks, the

Tarin said the proposed Auto Industry Development and Export Policy (AIDEP) aims at expansion of the auto industry in Pakistan by increasing the production of cars, motorcycles, tractors etc. "The top most priority is to ensure consumer welfare through availability of cars at affordable rates for the middle and lower income groups," he added. The Ministry of Industries and Production confirmed that prices of vehicles have been reduced commensurate with reduction in taxes and the industry has widely advertised for the information of the general public. The policy would encourage exports of vehicles and automobile parts.

Tarin also stressed to come up with innovative products for provision of car financing at reduced mark-up to consumers so that everyone can afford a car at flexible terms and conditions

Advisor to Commerce stated that the existing tariff structure needs to be rationalized (in a phased manner) to promote auto industry in Pakistan, keeping in view, the objective of localization i.e. to encourage local auto industry to come-up with high quality vehicles within affordable range.