Significant relief for Pakistan’s auto sector is likely in the forthcoming budget, with a notable reduction in taxes on vehicles.
Hybrid, electric and fuel-powered cars are expected to become cheaper in the next budget, while the long-standing dominance of large automobile companies is gradually coming to an end. Car prices may fall by as much as Rs2.5 million.
Engineering Development Board CEO Hamad Mansoor, spoke to journalists during an iftar dinner in Karachi and said a fully electric “Made in Pakistan” vehicle is likely to enter the market by June this year.
He said the price of an electric vehicle may fall below Rs1 million as the industry moves towards local manufacturing. Pakistan’s first lithium battery factory is expected to begin production by May, while a second plant is scheduled to start operations in September.
According to officials, about 74 per cent of battery components will be produced locally in Pakistan, which would significantly reduce costs. The lower price of electric vehicles will largely stem from locally manufactured spare parts.
Electric vehicles will be able to travel up to 180 kilometres on a single charge, while some models may offer a charging range of up to 1,200 kilometres. Officials said a vehicle charged in Islamabad could travel as far as Karachi.
At present, the cement sector and several other industries are shifting towards battery technology. If a battery imported at a cost of $96 is produced locally, the price could fall to about $72.
Under the prime minister’s PAVE programme, 40,000 motorcycles and rickshaws are being provided on subsidy. Electric vehicles are also expected to be included in the scheme.
Officials said the government’s new auto policy emphasises localisation, which is considered the foundation for increasing exports and creating competition in the sector.
The prime minister’s policy also calls for a significant reduction in vehicle taxes in the next fiscal year’s budget. Authorities expect a noticeable fall in motorcycle prices within the next two years.
A vehicle assembly plant will be installed in Lahore, while a battery manufacturing facility will be established in Karachi.
