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Electric vehicle promotes auto industry

Electric vehicle promotes auto industry

The Electric Vehicle (EV) policy has been presently introduced through the government of Pakistan that is expected would enhance Pakistan’s transport industry in upcoming eras. The Experts also revealed, from all stakeholders EV policy had been planned in Pakistan after incorporating consultations and will also assist increase pollution-free transport amenities. There were four major advantages of EV policy the expert also revealed as these vehicles would run on 70 percent less cost as against to its fuel-based counterpart. It is also recorded that from low running costs to being environment-friendly, in Pakistan introduction of electric vehicles would also assist cut oil import statistics; yield innumerable benefits for environment, citizens’ overall lifestyle. Source urged that for localisation of EV manufacturing efforts were being made, enabling the country to become part of the worldwide value chain of electric vehicles.

Furthermore, analysis of automobile industry during 2019 recorded that there was no respite for the automobile industry as it endured further rocky year amid a slump in activity. The soaring inflation and the high interest rate did not assist matters either. Statistics also revealed that following developments in macroeconomic parameters, automobile sales plunged 34 percent to 175,611 units in the first 11 months of 2019 as against to 235,491 units sold in the same period of the last year. Moreover, from January to June 2019, figures also revealed that the fall in automobile sales was approximately 11 percent. In the first 5-month of FY20, total sales came in at 55,407 units as against to 100,997 units in the same period previous year, which said a 45 percent fall. Even though there have been various elements behind the plunge, the main cause was rupee devaluation.

Analysis also showed that in FY2019, the rupee depreciated 35 percent against the US dollar. As of November, the charge per unit reached high at 13.25 percent, one amongst the very best within the country’s history because of high rate of inflation, which is presently 12.7 percent. When the rupee depreciates, even domestically produced parts of vehicles become costlier as stuff for the parts comes from abroad. Furthermore main cause for the fall in sales was taxes, including federal excise duty (FED) and extra impost imposed through the centralized. Besides rupee devaluation against the US dollar, the charge per unit doubled this year. High interest rates mean automobile financing becomes tougher and cars become dearer than before. Two years ago, the policy rate was only 6 percent; therefore, this rate discourages consumers from buying cars.

On top of all these, the government of Pakistan implemented 2.5 percent FED on automobiles having engines of less than 1,000cc, 5 percent on engines ranging between 1,000cc and 2,000cc and 7.5 percent on engines of greater than 2,000cc. The government of Pakistan also levied extra customs duty, at 5 percent on raw material. The documentation issue has also been a big reason why sales have recorded a sharp decline. Even though the government lifted the ban, it would take time to revive the self-assurance of purchasers. Analysis revealed that the overall market was in a slump, the government of Pakistan gave extraordinary incentives to new entrants in the automobile market, which aggravated the condition. Sources recorded that it is an unfair advantage to them over existing players. Besides other factors, those new entrants have pessimistically impacted not only manufactures, but the restricted vendors as well, as the new players are allowed to import vehicles parts at lower duty. In-spite of all these, EV policy and economic inducements would also be enlarged to the automobile manufacturing industry to produce electric vehicles domestically. Cataloging the advantages of electric vehicles, the experts also recorded that electric vehicles do not emit smoke and are cleaner, do not cause noise pollution and cut fuel cost as well. In the atmosphere, they have also recorded that emission of climate change-causing carbon dioxide from traditional automobiles contributes to greenhouse gases and accelerates climate change and overall environmental degradation and cause health issues. Conversely, all-electric vehicles don’t produce climate change-causing carbon dioxide into the atmosphere.



Global auto industry

International research investigated that Global sales of cars and SUVs would decline again in 2020, but that should mark the end of the fall since 2017. German sales next year will dive 4 percent and U.S. 3 percent but China’s mild 1.5 percent fall to 20.4 million marks the end of its 4-year slide. S&P Global Ratings revealed that worldwide sales will show no revenue growth in this year, and predicts this to extend into 2021. International experts predict a combination of elements, counting intense industry competition, trade disputes, higher production and R&D costs for electrification, and high restructuring costs, to keep margins under pressure for automobile manufactures. Analysts also project that worldwide sales would decline 5 percent to 78.8 million during 2019, and bottom out at 78 million during 2020. China sales, which slid from 24.2 million during 2017 to 20.7 million during 2019, would bottom out at 20.4 million in this year and then accelerate up to 25.4 million in 2025. U.S. sales would decline 3 percent in this year to 16.4 million, while Germany’s sales would slide 4 percent to 3.4 million. S&P Global said big risks remain, even to its additional conservative predict of a worldwide recovery delayed until 2021. Forecasts that China sales will be resuming an uptrend will come as an enormous relief to German manufacturers. In recent years in china, a good 40 percent of the German automobile industry’s turnover has been generated.


The automobile industry is going through crisis amid rising prices because of imposition of new strategies. It is urged to be very odd policy as foreign exchange was flying out, citizens were losing jobs and the government of Pakistan was losing taxes. There appears to be no relaxation for the automobile industry in the near future. The introduction of electric vehicle would enhance Pakistan’s transport industry and will also break the monopoly of cars dealers in Pakistan.

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