- The new EV policy promotes clean, sustainable, affordable transportation while supporting local industry development
Pakistan’s transition to electric mobility requires a phased and practical approach to succeed as
sustainable progress toward green mobility depends on infrastructure readiness, financial accessibility, and energy diversification. Some of the key challenges identified are as under:
Limited charging network
Pakistan currently operates only 35 public EV charging stations, far fewer than regional counterparts such as India and Nepal. India, for instance, has crossed 12,000 stations, while Nepal’s EV-friendly policies have led to rapid growth in public chargers across major cities. The contrast underscores how Pakistan’s transition is lagging behind regional momentum.
Energy mix concerns
With nearly 60% of power generation still derived from fossil fuels, electrifying vehicles without greening the grid would merely shift carbon emissions rather than reduce them.
High upfront costs
The elevated purchase price of EVs remains a deterrent for both consumers and fleet operators. With fewer than 10,000 registered electric vehicles, mainly two- and three-wheelers, the adoption of four-wheel EVs remains minimal, reflecting the continued limitation of affordability in constraining market growth.
The transport sector was a major contributor to carbon emissions in Pakistan and reforms in that area were imperative. It is in this backdrop that the National Electric Vehicle (NEV) Policy 2025-30 was launched which is a historic and transformative step in Pakistan’s journey towards industrial, environmental, and energy reforms.
The new EV policy was aligned with the vision of promoting clean, sustainable, and affordable transportation while encouraging local industry and protecting the environment. One of the major targets under the policy was to ensure that 30% of all new vehicles sold in Pakistan by 2030 would be electric.
The transition is projected to save 2.07 billion liters of fuel annually, amounting to nearly $1 billion in foreign exchange savings. Additionally, the policy is expected to reduce carbon emissions by 4.5 million tons and cut healthcare-related costs by $405 million per year. An initial subsidy of Rs9 billion was allocated for the fiscal year 2025-26, under which 116,053 electric bikes and 3,171 electric rickshaws would be facilitated. Out of Rs9 billion subsidy, 25% of the subsidy is reserved for women to provide them with safe, affordable, and eco-friendly mobility.
Furthermore, the policy outlines the installation of 40 new EV charging stations on motorways, with an average distance of 105 kilometers between them. The policy also includes the introduction of battery swapping systems, vehicle-to-grid (V2G) schemes, and mandatory integration of EV charging points in new building codes to facilitate wider adoption in urban areas. To encourage local manufacturing, incentives are being provided to domestic producers. Currently, over 90% of parts for two- and three-wheelers are already manufactured locally which were 30-40% cheaper than imported alternatives. The government will also introduce special support packages for small and medium enterprises (SMEs) to further boost localization. They have also provided exemptions on customs duties and sales tax on EV parts to support the local industry.
The NEV policy is not only an environmental revolution but also a foundation for industrial growth, local employment, energy efficiency, and technological self-reliance in Pakistan. It is a decisive move toward clean energy, sustainable transportation, and industrial development. Given Pakistan’s vulnerability to climate change, the EV policy will significantly contribute to achieving global carbon reduction targets.
The policy is expected to yield savings of approximately Rs800 billion over the next 24-25 years through reduced fuel imports, the use of cheap electricity, and revenue from carbon credits. Charging vehicles with electricity will also reduce capacity payments from Rs174 billion to Rs105 billion, and carbon credits could generate around Rs15 billion in revenue. The country’s total energy demand for EVs over the next five years is projected at 126 terawatt-hours, which could be met using the existing surplus in the national grid.
Given the fossil fuel-dominant energy mix, a complete shift to battery EVs might not deliver meaningful environmental gains in the short term. For everyday consumers, an electric hatchback still costs more than twice the average annual income, making affordability a greater hurdle than the convenience of charging. Hybrid and plug-in hybrid electric vehicles (PHEVs) should be viewed as essential steps toward full electrification. Pakistan could replicate the success of its solar adoption drive if financing and infrastructure challenges are adequately addressed.
Fiscal incentives, technology transfer, and green financing are key enablers for a low-carbon transition. Policy continuity and clear long-term roadmaps are essential to sustaining investor confidence in Pakistan’s evolving automotive ecosystem. Pakistan’s path to green mobility must be measured, inclusive, and context-driven. Aligning infrastructure, energy policy, and investment incentives, will be crucial for the country to truly shift gears toward a cleaner and more sustainable transport future.