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New Auto Policy Not Support for Promotion of EVs

Asadullah  06 Jan 2022   354
New Auto Policy Not Support for Promotion of EVs

New Auto Policy Not Support for Promotion of EVs

Ministry of Industries and Production made it clear in the cabinet meeting, which was administered recently that Pakistan did not get the encouraging response from the manufacturers of electric vehicle (EV) as the demand and market of the EV is very limited. The recent report shows that new auto policy not support for promotion of electric vehicles. 

The government has accorded the approval of the exception EV policy to promote the use and local production of the environment-friendly vehicles but this policy does not appeal to the manufacturer of EV. The government approved the EV policy that support the use of hybrid cars and the inclusive taxes with incentives for the locally produced EVs during the month of December 2021. The members of the Cabinet pressed hard on the importance of the production of EVs and it was expounded the importance of local production of the cars and their spare parts. They said that the government should get the support of Original Equipment Manufacturers (OEMs) in local assemble car engines and it was suggested to approach Chinese OEMs to develop the engine manufacturing facilities in Pakistan. 

The Minister of Industries and Production recommended to increase the volume of car production to minimum 500,000 units from current production, which is 250,000 units, which stresses the OEMs for manufacturing of engine. The secretary of Industries and Production briefed on Auto Industry Development and Export Policy (AIDEP) 2021-26 and it has shown its core features. The government is giving the priority to auto sector as this industry is considered as the head of all industries and it is the robust large-scale manufacturing sector growth rate, which need the endurance of industrial growth initiatives. 


The Pervasive Own Money Trend

The government is displeased with the auto manufacturers, who charge the premiums from the customers. They offered incentives to the new entrants in the market as they are provided in previous auto policy, which was presented by PML-N government. The own-culture is still flourishing and the dealers forced the customers to pay ‘own money’ for timely delivery of their vehicle at their homes. 

The government is trying to fix this issue and this entails in the new auto policy if the deliveries are delayed by 60 days. The Ministry of Industries engaged the auto parts manufacturers and OEMs by doing sufficient consultation in order to identify the hurdles. The additional customs duty was reduced to 2% from previous 7% and the court cases are also withdrawal and clear the delayed arrears. The car financing is also increased by 44% from Rs.240 billions to Rs.338 billion till October 2021 on the year-on-year basis so banks started advancing their finance after having high demand of the car financing.  

To utilize newly-implemented capacities and increased demand, FED on all vehicles was decreased and the sales tax on the small cars is also decreased to make these cars affordable for middle class. 

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