Budget 2021-22: China catalyzes EVs incentives in Pakistan

By Staff Reporter | Gwadar Pro Jun 16, 2021

by Yasir Habib Khan

Galvanized with the robust entry of Chinese electric automobile companies in Pakistan as well as the new EV policy, a fresh budget 2022-22 has laid down a set of incentives for faster growth of EVs market in the country.   

The EV budgetary bonanza will help Pakistan to switch over to 30 per cent electric vehicles by 2030 under the National Electric Vehicles Policy, reduce the import bill by $2 billion every year, cut pollution, fulfil PM Imran Khan’s vision “Clean Green Pakistan” and realize commitments on UN Sustainable Development Goals (SDGs) on the environment. 

Electric Cars receive massive tax relief in 2021-22 Budget as Finance Minister Shaukat Tarin unleashed a relief package by eliminating the Value Added Tax on the imports of EVs and their CKD kits and the Federal Excise Duty (FED) on four-wheeled EVs. 

In the history of Pakistan, the current budget 2021-22 is the first-ever budget that has announced impetus to EVs.  In order to give further booster, the government has sliced down sales tax on locally assembled electric cars to 1 percent from 17 percent. The massive 16 percent curtailment is going to revolutionize the EV market in Pakistan.  

The government has also capped the duty on import of charging equipment at 1 per cent and abolished additional customs duty (ACD) on the import of electric vehicles. The import of plant and machinery for the manufacturing of these vehicles would also be duty-free. While the government has also waived the registration and annual renewal fee of EVs for the ICT sector. 

Chinese companies’ rising interest and government EV policies seem to be complementary catalysis behind the budget EV incentives, Pakistan Electric Vehicles and Parts Manufacturers and Traders Association (PEVPMTA) said.  

With an estimated foreign direct investment (FDI) of Rs663 million and local investment worth Rs637 million, Chinese company “MG JW Automobile” is set to establish an electric car manufacturing plant in the first private special economic zone (SEZ) in Raiwind, Punjab. MG JW Automobile (MG Pakistan) is a joint venture between JW-SEZ (Private) Limited and SMIL, which is a subsidiary of SAIC Motor Corporation Limited. SAIC is a Chinese state-owned automotive design and manufacturing company headquartered in Shanghai with multinational operations. 

In partnership with China, Topsun Motors (Pakistan), the first-ever electric car company has been launched in the country. Joint Venture cut the ribbon on its showroom called Topsun MR Motors on in Jail Road Lahore last year. 

Chinese Electric Car called “Wuling HongGuang Mini EV”, is also in the phase of preparation to get launched in Pakistan market. The Wuling HongGuang Mini EV is manufactured through a joint venture between China’s Wuling, Chinese state-owned automaker SAIC Motor, and General Motors.  

DEZHOU-Pakistan’s EV sector is embracing Chinese investor as a group of five local enterprises signed an MoU with China’s Songuo Motors on the Songuo-Pakistan e-Trike & BSS Pilot Project. The move is to export Songuo electric bicycles, electric tricycles and EVs to the project site.  

A Chinese company RNL Technologies is also gearing up to start manufacturing Electric Vehicle (EV) chargers in Pakistan.   

Eight Chinese companies have partnered with the Crown Group in joint ventures. Crown Group is a new player in the electric vehicles market and has invested Rs2 billion to set up its manufacturing plant to produce environmentally friendly EVs.   

Chinese electric automaker BYD and Toyota Motor Co. (Pakistan) have also joined hands to manufacture battery-powered vehicles in a pilot project. 

Chinese auto manufacturer Skywell Automobile will invest $50 million to launch electric buses in Pakistan. Under a signing ceremony of the Strategic Alliance Agreement between Daewoo Pakistan and Skywell Automobile, China, electric buses and other electric vehicles will be introduced soon.  

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