An Uphill Drive to EV Cool

The discourse over electric cars, or EVs as they are popularly known, was reignited recently when BYD, the Chinese EV giant, took its first steps into the South Asian market via Pakistan. Spurred on by investor Warren Buffet and partnering with local group Mega Motors, there are big plans on the drawing board; such as opening a full-fledged assembly plant in Pakistan in two years’ time. BYD has equally impressive sales projections, as according to their assessment, half of all vehicle sales in Pakistan will be NEVs (new energy vehicles: hybrid and electric) by 2030 (under six years). In the meantime, they have launched three models as test cases for sales and services and as forerunners to these extraordinary plans in this growing but fraught market.

But is there enough potential in the Pakistani market?

EVs receive energy via a charging station and preserve it inside high-density lithium-ion batteries. Inverters change the direct current into an alternating current to power an electric traction motor to move the car and control speed. No gears are necessary and power from the pedal to the engine is immediate. Together, these make for a lightweight, compact, near-zero-vibration electric powertrain system that moves and controls the vehicle at maximum torque, zero emissions and quiet operation.

EVs are much needed. Pakistan has been consistently hit by the worst possible smog since at least 2015, so much so that it is now being referred to as the ‘Fifth Season’. Major cities like Karachi, Lahore, and even Islamabad, despite their green acres, find themselves in the apex area of the ‘World’s Most Polluted Cities’ list. According to the Sectoral Emission Inventory of Punjab, automobiles account for nearly half of the harmful emissions, with industry and agriculture trailing behind. Conversion of conventional vehicles to EVs would significantly pin down Pakistan’s heavy carbon footprint and lead to zero direct emissions to improve air quality – a huge step in the ambitious direction of a fossil fuel-free society.

In Pakistan, EVs can typically reach speeds of 120 kilometres per hour and cover 220 kilometres on a single charge. At an estimate, even a 30% NEV adoption by 2030 would realise savings of nearly $2.5 million annually on the overall oil import bill.

Pakistan released its first-ever EV Policy in 2019, setting targets it hoped to achieve by 2025. To this end, it proposed to transform over 3,000 idle CNG stations into EV charging stations and some 100,000 cars to be converted to EVs. Since its launch, the policy has been modified at least four times – not surprising given that these targets have hardly been moved towards, let alone achieved. The transition to EVs is demanding and will require a lot of investment. Not to forget combatting the strong pro-conventional engine lobbies, which are not expected to take this “EV nonsense” lying down. Other critical matters such as electricity shortfalls, expensive batteries, extended battery charging times and inconsistent government policies are no small irritants to ignore.

Another potential hurdle is the mindset of the consumer. In a culture rooted around mighty combustion engine vehicles, creating awareness of the potency of EVs leading to adoption will be challenging. An industry old-timer suggests attracting the consumer with the ‘save money’ buzz phrase rather than ‘save the environment’. Wise, perhaps, as most people tend to look more inward and climate change may not be a strong enough motivator to switch to EVs.

There is consternation among EV stakeholders that the government may go down the same route as the CNG botch-up, a product of an ill thought-through strategy that branched into fresh problems and drained a very precious, national natural resource with staggering effects for the nation and economy. Will the government learn from past mistakes and ensure a clear-headed, focused approach to policy and implementation? If implemented wisely, there is little doubt that EVs have it in them to drive much-needed economic growth in Pakistan. But there are impediments.

To start, the transition to EVs needs to be aligned with global standards prescribed by the United Nations, referred to as the World Forum for Harmonisation of Vehicle Regulations (WP29) guidelines. These are adopted universally and accepted across borders. Pakistan will not be an exception; rather, an opportunity prevails here. Investments in this sector must be export-oriented to ensure sustained demand beyond the domestic market. Far greater opportunity exists for local parts manufacturers and vendors to adopt the very-doable WP29 standards in locally developed parts to tap exports into global markets. This can help offset the total cost of ownership (TOC) of EVs, which will be higher than conventional cars due to the heavy cost of batteries. An export-oriented strategy will trigger greater long-term investments, lead to economies of scale and rationalise local EV prices.

EVs spring to life only when their batteries are charged. And that is where the challenges cascade. Strategically located fast charging stations across the breadth of the country, along motorways and major city arteries are key, and this calls for tremendous investment. The projections to set up 3,000 charging stations made five years ago hardly cut it in 2024 when, according to ElectroMaps, only eight EV stations exist in the entire country. The explanation? Not enough EVs in Pakistan to warrant more. And vice versa? The government needs to initiate its own model charging stations to encourage adoption and more investment.

Fewer charging stations across Pakistan going forward mean long lines and irritating wait times – enough to put off prospective buyers. Charging stations can be slow, inefficient and even closed due to power outages. Current hybrid EV users tend to charge their vehicles at home, where the cost of electricity is lower than at commercial charging stations, which does not exactly encourage new investments in charging infrastructure.

While power outages are the norm in energy-strapped Pakistan, the cake is taken by the high cost of electricity. Too expensive for charging stations to buy and too costly for consumers to purchase. Prices are set and regulated by NEPRA – which, according to many experts, are irrational. No one is going to invest in setting up charging stations in order to make a loss over sales. Realistic price regulations must replace outdated tariff modalities.

At the onset, an efficient one-window portal must be set up to streamline all overarching operations concerning all stakeholders. Some areas to cover would be securing a steady flow of information, and setting up structure building codes, tariff regulations and quality benchmarks. Another critical element would be the creation of supply chain cycles for raw materials locally and internationally to ensure sustenance. Other derivative industries, such as spare parts, electronics and trim materials, which constitute the EV ecosystem should receive tax exemptions to help chug things along. As mentioned earlier, the government should jumpstart the process by setting up model charging stations on their own. Strong and timely fiscal support for the EV initiative should also be a key objective.

The time for Pakistan to find its identity in a global and competitive EV ecosystem is now. The challenges are great but not insurmountable.

Mazhar M. Chinoy has served as a director at LUMS. mmchinoy@gmail.com