EV-focused auto policy

On paper, the six-pillar framework – spanning low-cost cars, localisation, safety, exports, EV promotion and transparency – reads like the comprehensive reset a long-protected, sluggish industry has desperately needed.

But given the current state of the sector, no honest analyst can describe the policy as anything but aspirational.Many of the incentives are eye-catching.

Sales tax on battery-electric vehicles has been proposed at just 1%, with EVs priced up to $50,000 exempt from capital value tax, withholding tax and federal excise duty.

Car-financing limits have been raised from Rs3 million to Rs10 million, and charging-station equipment now enjoys duty-free status.

Import duties will be cut annually over five years to reduce manufacturing costs and, eventually, showroom prices.

A 30% EV-sales target by 2030, earlier than previously envisaged, signals real intent.But most of these policy moves require IMF approval, which may not be forthcoming, considering they are potentially net negatives in terms of the government's balance sheet.

Meanwhile, local manufacturers and even parts makers could be put out of business if new supply chains are opened and they are forced to compete with foreign firms.

While there are definitely problems that need to be addressed in the local car industry, forcing it to compete or die in this way could endanger up to 1.5 million jobs in the Rs700 billion industry, according to some reports.

Cheap imports also make it pointless for companies to try to localise production.

On the other hand, some of the government's goals are comically low, such as the target of 3,000 charging stations nationwide by 2030.

Discussions in the Senate recently concluded that Karachi alone needs about 5,000 charging stations.

Unless charging is easily accessible, EV adoption will remain stalled.