National Electric Vehicle Policy 2025–30 launched

ISLAMABAD: The government has officially launched the National Electric Vehicle (NEV) Policy 2025–30, aiming to reduce carbon emissions, cut fuel imports, and promote local manufacturing of electric vehicles (EVs).

Speaking at the launch, Prime Minister’s Special Assistant on Industries Haroon Akhtar Khan said the policy will not only strengthen Pakistan’s economy but also protect the country from the harsh effects of climate change. He called the policy a historic step toward clean, affordable, and sustainable transportation. He said that over the next five years, the government will provide a total Rs100 billion subsidy to the electric vehicles.

One of the major goals of the policy is to ensure that 30 percent of new vehicles by 2030 are electric. This shift is expected to save 2.07 billion litres of fuel annually, which translates to roughly $1 billion in foreign exchange. Additionally, it could reduce carbon emissions by 4.5 million tons and cut health-related expenses by $405 million each year.

To promote adoption, the government has allocated Rs9 billion in subsidies for the fiscal year 2025–26. This funding will help deliver over 116,000 electric bikes and more than 3,000 electric rickshaws. Notably, 25 per cent of the subsidy is reserved for women to support affordable and eco-friendly mobility options for them.

To further localise EV production, the government has offered tax breaks on EV parts and extended incentives under the AIDEP tariff facility until 2026. Haroon Akhtar Khan emphasised that this policy could save Pakistan up to Rs800 billion over the next five years and urged all stakeholders to join hands in making this clean transportation vision a reality.

Khan stated that the new EV policy is aligned with the prime minister’s vision of promoting clean, sustainable, and affordable transportation while encouraging local industry and protecting the environment. He emphasised that the transport sector is a major contributor to carbon emissions in Pakistan, and reform in this area is imperative.

He said a fully digital platform has also been introduced to ensure transparent online application, verification, and disbursement of subsidies. Furthermore, the policy outlines the installation of 40 new EV charging stations on motorways, with an average distance of 105 kilometres between them. The policy also includes the introduction of battery swapping systems, vehicle-to-grid (V2G) schemes, and mandatory integration of EV charging points in new building codes to facilitate wider adoption in urban areas.

To encourage local manufacturing, incentives are being provided to domestic producers. Currently, over 90 percent of parts for two- and three-wheelers are already manufactured locally. The government will also introduce special support packages for small and medium enterprises (SMEs) to further boost localisation. The AIDEP tariff facility will continue until 2026 and be phased out gradually by 2030.

The special assistant noted that the policy was developed through consultations with over 60 experts, institutions, and industry stakeholders, guided by a steering committee under the Ministry of Industries and Production since September 2024. The steering committee held monthly and quarterly review meetings, while the Auditor General of Pakistan will conduct a performance audit every six months.

He stressed that the NEV Policy 2025–30 is not only an environmental revolution but also a foundation for industrial growth, local employment, energy efficiency, and technological self-reliance in Pakistan. He expressed hope that federal and provincial governments, the private sector, and citizens will work together to realise this vision of a clean, modern, and sustainable transport system.

SAPM stated that the policy is a decisive move toward clean energy, sustainable transportation, and industrial development. It presents a comprehensive and results-driven strategy that aims to lead Pakistan toward a cleaner and more resilient future.

He also highlighted that locally produced goods are 30–40 percent cheaper than imported alternatives. In the two-wheeler segment alone, more than 90 percent of parts are now produced locally. Given Pakistan’s vulnerability to climate change, the EV policy will significantly contribute to achieving global carbon reduction targets.

The policy is expected to yield savings of approximately Rs800 billion over the next five years through reduced fuel imports, the use of cheap electricity and revenue from carbon credits. Charging vehicles with electricity will also reduce capacity payments from Rs174 billion to Rs105 billion, and carbon credits could generate around Rs15 billion in revenue. The country’s total energy demand for EVs over the next five years is projected at 126 terawatt-hours, which can be met using the existing surplus in the national grid.

An electric rickshaw or bike user is expected to recover their initial investment within one year and 10 months due to the low cost of charging compared to petrol. For instance, if the additional cost of an electric bike is Rs150,000, this can be recouped within less than two years through fuel savings.

He concluded by saying that the government has also provided exemptions on customs duties and sales tax on EV parts to support the local industry. “This policy should be embraced wholeheartedly by Pakistan, as it is a game-changer for our economy, environment, and industrial landscape,” Akhtar affirmed.

Copyright Business Recorder, 2025