Sunday, May 19, 2024

New Auto Policy to focus on EVs and Hybrids

With the present Automotive Development Policy (ADP) set to expire in June 2021, the next one has almost been completed by the Ministry of Industries and Production. Hammad Azhar, Federal Minister for Industries and Production, briefed the Standing Committee on Industries and Production of the National Assembly on the forthcoming auto policy as well as the outcome of the current one.

In the meeting chaired by Sajid Hussain Turi, Member of the National Assembly, Hammad Azhar briefed the Auto Industry Output Committee. He said that the government had given 20 new investors greenfield status in an attempt to generate more competition, and that six new companies had joined the four-wheeler segment of the auto industry in Pakistan. Not only that, four new bus companies have entered the Pakistani market. These new entries have contributed to $476 million in direct on-the-ground investment in Pakistan.

Kia Lucky Motors Pvt Ltd, United Motors Pvt Ltd, Regal Automobile Industries Ltd, Foton JW Auto Park Pvt Ltd, Master Motors Ltd and Hyundai Nishat Motor Pvt Ltd are the six new automotive firms.

The Federal Minister called the 2016-2021 ADP a success, stating, “The current policy will strengthen Pakistan’s automotive sector by increasing the total installed capacity of local industries by up to 418,000 per year by June 2021, or about 280,000 by June 2020.”

In addition, the government has agreed in the next ADP 2021-2026 to introduce a strategy for electric vehicles. The new strategy will include all hybrid vehicles and electric vehicles, including locally developed ones. Committee member Mustafa Ahmad expressed his concern about the government’s emphasis on hybrid vehicles, suggesting that the government should instead concentrate on electric battery vehicles and technology. He claimed by quoting the example of Tesla in the United States, the government should build charging stations to boost the viability of EVs in the market and they should reuse batteries.

The committee on tariffs declared on hybrid electric vehicles under ADP 2016-2021 was briefed by Asim Ayaz, General Manager of the Engineering Development Board.

He said that the new tariffs would provide cars under 1,800cc with a 50 percent tax exemption and a 25 percent exemption above 1,800cc. He also told the committee that a cabinet committee headed by the Federal Minister for Industry and Production is almost finalizing the 4-wheeler EV policy with the goal of eliminating the additional customs duty, sales tax, and federal excise duty on electric vehicles once the new auto policy comes into force in July 2021.

The policy on two and three wheelers and heavy commercial vehicles has already been approved and enforced by the cabinet.

The committee also expressed concern about the Country’s rising prices for vehicles. In addition, the Committee proposed the early issuance of income tax and sales tax refunds to the various car manufacturers by the Federal Board of Revenue to assist with their financial condition, taking into account the current business situation.

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