Pakistan EV market: Navigating challenges and opportunities

Business Recorder

13-05-2025

The electric vehicle revolution is gradually making inroads into Pakistan's automotive landscape, albeit at a pace significantly slower than global counterparts.
Despite ambitious policy frameworks and growing interest from manufacturers and consumers alike, the Pakistan EV market faces unique challenges that require strategic interventions and coordinated efforts from all stakeholders.
Global context vs. Pakistan's reality
The global EV market has witnessed remarkable growth, with sales reaching 13.3 million units in 2024, representing 16.2% of total passenger vehicle sales, a 40% increase from 2023. China dominates this landscape, accounting for over 61% of global EV sales, followed by Europe (24%) and the US (11%).
In stark contrast, Pakistan's EV adoption remains in nascent stages. As one industry expert at the recent Climate Action Center's 2nd Electric Vehicle Conference held at Lahore noted, 'Despite the global EV push, EV sales in Pakistan remain extremely low.' This disparity highlights the significant gap between Pakistan's EV aspirations and current market realities.
The environmental and health imperative
Beyond economic considerations, the case for EV adoption in Pakistan carries profound environmental and public health implications. Traditional gasoline vehicles emit approximately 400g CO₂ per mile, translating to 4.6 metric tons annually per vehicle. In comparison, electric vehicles produce just 50g CO₂ per kilometer when accounting for lifecycle emissions including electricity generation.
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This reduction in emissions directly translates to measurable health benefits. Research demonstrates a clear correlation between EV adoption and reduced childhood asthma cases with one case prevented for every 264 new EVs on the road. More strikingly, a United States's studies suggest that 18-42% of childhood asthma cases are attributable to traffic-related air pollution, a burden that could be substantially reduced through electrification.
For Pakistan's major urban centers, where air quality consistently ranks among the world's worst, these benefits could be transformative. Lahore and Karachi regularly experience PM2.5 levels far exceeding WHO guidelines, contributing to respiratory diseases, cardiovascular issues, and premature deaths.
Research indicates that reducing PM2.5 levels to WHO guidelines could add an average of 4.07 years to life expectancy and prevent approximately 193,000 deaths.
Infrastructure: The missing link
The foundation of any successful EV ecosystem is robust charging infrastructure. However, as representative from Daewoo pointed out during the conference, 'No significant advancements have been made in establishing EV charging stations.' This infrastructure deficit represents perhaps the most significant barrier to widespread EV adoption in Pakistan.
The challenge extends beyond mere numbers. Even as plans emerge for Pakistan's largest DC fast-charging network with 128 DC fast chargers planned over three years and the first 50 to be operational by December 2025 questions remain about the electrical grid's capacity to support increased demand.
Industry experts have raised valid concerns that 'increased EV adoption and charging stations will demand higher capacity from distribution companies (DISCOs), which may face infrastructure and load management challenges.'
Consumer adoption: Promising signs amid challenges
Despite infrastructure limitations, certain consumer segments show encouraging adoption patterns. Perhaps most notable is the gender dimension of EV adoption. While women represent less than 1% of traditional automotive users in Pakistan, they constitute approximately 20% of EV users a remarkable statistic that suggests EVs may be helping bridge gender gaps in mobility.
The economic case for EVs presents another compelling adoption driver. Conference participants cited examples where 'a fuel-based vehicle incurs costs of Rs60,000/month, whereas an EV reduces this to approximately Rs 15,000/month.' This fourfold reduction in operating costs presents a powerful incentive, particularly as fuel prices continue to rise.
For daily commuters, EVs offer practical advantages. As one industry participant noted, 'Buyers find EVs suitable for daily commutes, as vehicles can be charged at home,' alleviating concerns about charging availability for short distances. This convenience factor, combined with health benefits from reduced exposure to traffic pollution during commutes, creates a compelling value proposition for urban professionals.
Manufacturing and localization: The path to affordability
The path to mass EV adoption in Pakistan inevitably runs through local manufacturing and assembly. Currently, the industry faces a significant cost challenge, with CKD (Completely Knocked Down) production as it is more expensive than CBU (Completely Built-Up) due to higher initial company investment.
Industry representatives at the conference outlined a pragmatic approach to localization: 'A one-year period is required to assess user feasibility comprehensively. Post-assessment, efforts will focus on localizing EV manufacturing to reduce dependency on imports and scale production.'
Encouragingly, progress is being made on critical components. As one speaker noted, 'Manufacturing batteries domestically is a priority and will soon commence to strengthen local production capabilities.' This development could significantly reduce costs and build technical capacity within Pakistan's automotive sector.
Public transport: Leading the charge
While private EV adoption faces numerous hurdles, the public transport sector may offer a more immediate path to electrification. Daewoo's initiatives provide a case in point, with the company 'introducing electric buses, including intercity EV buses' and conducting its first EV bus trial on the Lahore to Sialkot route. Daewoo's approach reflects a realistic assessment of current limitations, focusing 'on short routes due to challenges in managing long-distance EV operations.'
Nevertheless, the company's ambition to 'cover all short-distance routes with EV buses within two years' signals confidence in the viability of electric public transport.
The public health implications of electrifying mass transit are particularly significant. Buses and other public transport vehicles typically operate in densely populated areas where air pollution exposure affects large numbers of people. Electrifying these fleets could deliver outsized health benefits, particularly for vulnerable populations like children and the elderly who are most susceptible to pollution-related illnesses.
Government policy: Evolution and coordination
The policy landscape for EVs in Pakistan shows signs of maturation. As Omer Masud observed during the panel discussion, the 2019 EV policy was 'a reactionary measure with no comprehensive strategy or planning behind it.' However, he 'commended the upcoming EV policy, expected to be launched within a week, signaling progress in addressing prior gaps.'
A critical insight from the discussions centered on governance structures. Masud 'stressed the critical role of local governments as key players in developing and supporting the EV ecosystem' and 'emphasized the need for all government bodies to work in coordination to effectively implement EV policies.'
This call for coordination extends to development planning, with recommendations to include 'the EV ecosystem as a priority area in the Annual Development Plan being prepared.' Such integration would help ensure that EV initiatives receive appropriate budgetary support and are aligned with broader economic objectives.
As policymakers refine their approach, incorporating health and environmental metrics into cost-benefit analyses could strengthen the case for accelerated EV adoption. The potential for reduced healthcare costs, improved productivity from fewer sick days, and extended life expectancy represents significant economic value that traditional vehicle assessments often overlook.
Financing innovation: Bridging the affordability gap
Innovative financing models are emerging as crucial enablers of EV adoption. The CM Punjab Interest-Free Bikes Scheme for students represents one such initiative. This program reveals both progress and persistent challenges. The 'affordability gap' remains significant, with 'a price gap of Rs125,000 between EV and petrol bikes' positioning electric options as 'luxury items.'
This underscores the need for continued subsidies and incentives to bridge the cost differential.
Looking ahead, the Federal Government EV Scheme scheduled for launch in Q2 2025 aims to finance 40,000 EV bikes and 3,000 EV rickshaws/loaders.
With features including vehicle lease loans up toRs300,000 for 2-wheelers and Rs1 million for 3-wheelers, subsidies of Rs50,000 and Rs250,000 respectively, and fully subsidized markup, this initiative could significantly accelerate adoption in the two and three-wheeler segments.
The road ahead: A balanced perspective
Pakistan's EV journey reflects both promising developments and persistent challenges. The current landscape suggests several priorities for stakeholders:
Infrastructure development: Accelerating charging station deployment while ensuring grid capacity can support increased demand.
Targeted adoption strategies: Focusing on segments showing early adoption (urban commuters, female users) and applications with clear economic benefits (public transport, delivery fleets).
Manufacturing ecosystem: Supporting localization efforts, particularly in battery production, to reduce costs and build technical capacity.
Policy coordination: Ensuring alignment between federal and local government initiatives, with clear roadmaps and implementation mechanisms.
Financial innovation: Expanding financing models that address the affordability gap, particularly for middle and lower-income consumers.
Public health metrics: Incorporating air quality improvements and health outcomes into EV policy evaluation frameworks.
The electric vehicle transition represents not merely a technological shift but a comprehensive economic, environmental, and public health transformation. With thoughtful policy, strategic investments, and coordinated stakeholder efforts, Pakistan can navigate this complex transition.
The potential prize, cleaner air, healthier citizens, and longer lives makes this journey not merely desirable but essential for Pakistan's sustainable development.
The article does not necessarily reflect the opinion of Business Recorder or its owners