Automark

A Closer Look at Pakistan’s New Trade Commitments with the IMF

Introduction

The Government of Pakistan is preparing to roll out the National Tariff Policy (NTP) 2025–30, effective July 1, 2025. Presented as a framework for export-led growth and industrial modernization, the policy is being driven by the Engineering Development Board (EDB) and the Ministry of Industries.

While the intent is progressive, a deeper analysis reveals concerning consequences—including IMF-driven liberalization, geopolitical implications, and serious risks to domestic manufacturing, employment, and national sovereignty.

What Does NTP 2025–30 Propose?

The policy introduces wide-ranging reforms:

• Customs duty slabs reduced from five to four: 0%, 5%, 10%, 15%
• Additional Customs Duties (ACDs) to be phased out in 4 years
• Regulatory Duties (RDs) to be eliminated in 5 years (with no new RDs introduced)
• 5th Schedule of the Customs Act to be phased out over 5 years
• Average applied tariff to drop from 10.6% (FY25) to below 6% by FY30

Under IMF agreements, Pakistan has also committed to:

• Allow commercial imports of used vehicles (under 5 years) from FY26Q1
• Introduce a 40% premium tariff on used cars, to be reduced annually by 10% until zero by 2030
• Replace the age limit on used vehicles with safety/environmental standards by July 2026
• Remove non-tariff barriers (NTBs) and simplify import/export policies
• Eliminate all sectoral tax exemptions, including those in agriculture and ex-FATA/PATA

Impact on the Automobile Industry

The automobile sector is among the most heavily protected in Pakistan, following the furniture and tyre industries. These protections were purposefully introduced to:

• Encourage local manufacturing
• Reduce import dependency
• Support employment generation
• Facilitate technological localization

Now, sudden liberalization without phased readiness poses a severe threat:

• Billions in investments risk devaluation
• Millions of jobs across the ecosystem (vendors, OEMs, aftersales) are vulnerable
• A fragile industry faces competition from imported used vehicles, impacting both price control and innovation

While experts have been advocating for an export-oriented shift, the reality is: Have we prepared our industry—or our people—for this transition?
Are we producing globally competitive vehicles, raw materials, or components?
Or are we still dependent on importing whatever looks appealing?

(We imported whatever looked good—but this doesn’t build an industry.)

IMF Influence and Geopolitical Imbalance

While the NTP aligns with IMF benchmarks for fiscal reform, it risks long-term industrial erosion. Reforms that reduce protection for strategic sectors such as auto, steel, electronics, and dual-use defense technology weaken economic sovereignty and self-reliance.

Simultaneously, India is rising as a manufacturing hub. Global firms like Apple are shifting production there, while the West deepens its tech and defense ties with New Delhi. Meanwhile, Pakistan is being asked to dismantle protections and comply with IMF liberalization—without equivalent capacity-building support.

Potential Benefits of NTP 2025–30

• Enhances export competitiveness by reducing input costs
• Simplifies tariff structures, improving compliance and trade predictability
• Aligns with WTO norms, building international trade confidence
• Encourages integration into global value chains

Key Risks and Drawbacks

• Threatens local manufacturing and jobs
• Undermines strategic industries including autos and defense
• Reduces fiscal space due to declining tariff revenues
• Promotes import dependency over local innovation
• Reflects external control over internal economic policy

Few Important Questions:

> Question #1:

Is the IMF forcing Pakistan to remain weak in manufacturing and restrict its defense capabilities?
Answer:
While the IMF focuses on macroeconomic reform, its conditionalities often ignore the realities of underdeveloped industries. The removal of protective policies can delay indigenous defense production and manufacturing localization, inadvertently weakening Pakistan’s strategic capacity.

> Question #2:

Is this a dual-faced global strategy—supporting India while pushing Pakistan into economic pressure?
Answer:
Yes. While India receives incentives, FDI, and trade access, Pakistan is burdened with austerity and liberalization without support for industrial capacity-building. This asymmetry exposes geopolitical imbalance in South Asia’s economic future.

> Question #3:

Why are Pakistani higher officials unable to defend against this policy?
Answer:

• Limited bargaining power due to economic crises and IMF dependency
• Lack of long-term vision and fragmented industrial policy
• Inadequate technical preparation in negotiations
• Geopolitical and diplomatic pressures
• Disconnect from industry realities within bureaucracy
• Short-term political survival prioritized over long-term growth

What needs to change?
Pakistan must build technically strong, industry-informed, and unified negotiating teams to protect national interests in all future policy dialogues.

> Question #4:

Why is the local industry—especially the Big 7 automakers—silent and not protesting against these drastic policy changes?
Answer:

1. Corporate diplomacy and fear of backlash
   1. Many companies rely on government licenses and incentives
2. Global ownership and shifting focus
   1. MNCs are re-prioritizing India and other markets
3. Short-term commercial focus
   1. Prioritizing sales and adaptation over activism
4. Lack of collective voice
   1. No strong, unified industry forum with lobbying influence
5. Hope for internal reversal
   1. Many are lobbying quietly instead of going public

Key Take-away: Pakistan at a Crossroads

The National Tariff Policy 2025–30 may be rooted in reform—but unbalanced liberalization without domestic readiness could trigger de-industrialization, job loss, and economic dependency.

For Pakistan to grow sustainably:

• Reforms must be phased, sector-sensitive, and strategic
• Domestic industries must be empowered, not exposed prematurely
• Economic sovereignty must be guarded not just with words—but with vision, unity, and action.

This exclusive article has been published in Automark Magazine’s June-2025 printed and digital edition. Written by @asif-mehmood

Master Group of Industries, one of Pakistan’s most respected and diversified business conglomerates, has officially partnered with Chery Brand, China’s No.1 global vehicle exporter, to bring the latest Super Plug-in Hybrid Electric Vehicles (PHEVs) and New Energy Vehicles (NEVs) to Pakistan.

With over 60 years of industrial excellence and around 40 years of auto-manufacturing experience, Master Group is investing in a cutting-edge manufacturing facility, world-class 3S Dealership network, and comprehensive after-sales support, led by Master Auto Engineering (a subsidiary of Master Group of Industries) under the leadership of Mr. Samir Malik (CEO).

This strategic alliance heralds a new era for Pakistan’s automotive industry, driven by sustainable
mobility, advanced technology, and an elevated customer experience.

Get ready for ground-breaking product launches, innovations, and more.

Lahore, May 05: MG Pakistan has announced a major upgrade to its popular plug-in hybrid SUV, the MG HS PHEV, by introducing a 7KW fast charger as a standard replacement for the existing portable charger. The move reflects the brand’s commitment to delivering smarter, more efficient urban mobility.

Since its launch in Pakistan in October 2024 and the beginning of production in January 2025, the MG HS PHEV – True Hybrid Electric has seen an encouraging response, with over 500 units delivered

Customers have appreciated the vehicle’s design, performance, and eco-friendly drive, but some expressed concerns about the overnight charging time of up to 8.5 hours with the standard portable charger.

Acting upon user suggestions, MG has now introduced 7KW fast charger, which will cut the charging time nearly in half, offering greater convenience to drivers with daily commutes and urban routines.

“We are committed to transforming the Pakistan Automotive landscape by offering the latest technology and services,” said General Manager Marketing Div – Syed Asif Ahmed. “By upgrading to a faster charging solution, we’re not just addressing customer concerns—we’re enhancing the overall ownership experience and reinforcing our leadership in the new energy vehicle segment.”

While the portable charger was originally provided free of cost with MG HS PHEV, the new 7KW charger—valued at PKR 235,000—will now replace it without any additional cost to the customers.

 The portable version will now be available for sales as accessories.

The MG HS PHEV continues to stand out as a premium hybrid SUV offering pure EV range of +50 km, advanced safety features, tech innovation, and low running costs, making it an ideal solution for Pakistan’s urban drivers looking to make a smarter switch to hybrid mobility.

MG Pakistan is a leading name in electric and hybrid mobility solutions, committed to innovation, safety, and sustainability. With a rapidly expanding lineup of smart vehicles, MG is shaping the future of transportation in Pakistan.

• PRESS RELEASE

Learning from Past – Earning from Present – Growing from Future

Episode: 3

Summary of the Last Articles

In the previous article, we mentioned the countries that have achieved economic development through the auto industry. Over the past century and a half, the auto industry has given immense industrial and economic development to America, Europe, Japan, and Korea and included them in the list of developed countries in the world. This journey of development through the auto industry is still ongoing, and China is a living example of this, while Pakistan’s development is also inseparable from the auto industry.

Then we reviewed the auto market and saw which models of vehicles are in trend in Pakistan in particular and the rest of the world in general and what are the reasons for them. The result was that even today SUVs are being liked for many reasons and the trend of buying and using them continues. After that, we reviewed the businesses related to EV vehicles and the potential opportunities and their types and brought to the fore 14 new businesses that can be adopted and started new types of small businesses that are feasible with proper investment, hard work and attention and can be implemented immediately and in the near future and can be expanded and expanded over time and as needed.

Now Read On….

It may come as a surprise to some that before the current popular IC engine auto industry came into existence, the auto industry started with electric motor vehicles and EV vehicles maintained their place in the regular market for a few decades until the end of World War II and IC engine vehicles made significant progress and left the EV industry behind. Here we review EV history so that we can think about the development of the current and future auto industry and the EV industry in the light of the past.

History of Electric Vehicles

During the 20th century, the main manufacturers of electric vehicles in the United States included Anthony Electric, Baker, Columbia, Anderson, Riker, Milburn, Bailey Electric, and Thomas Eddison’s General Electric , Detroit Electric and Thomas Eddison Electric. Their electric vehicles were quieter than gasoline-powered ones and did not require gear changes.

Cause of Preference EV V/s ICE

Electricity was among the preferred methods for automobile propulsion in the late 19th and early 20th centuries, providing a level of comfort and an ease of operation that could not be achieved by the gasoline-driven cars of the time. The electric vehicle fleet peaked at approximately 30,000 vehicles at the turn of the 20th century.

Electric cars remained popular until advances in internal-combustion engine (ICE) cars and mass production of cheaper gasoline- and diesel-powered vehicles, especially the Ford Model T, led to a decline.

Early Developments

1881, Gustave Trouvé presented the world’s first publicly presented full-scale electric car powered by an improved Siemens motor at the Exposition de Paris.

1882, The significant Early Electric Vehicle started from Electromote, the world’s first Trolleybus by Werner von Siemens, Berlin Germany.

1884, Thomas Parker built an electric car in Wolverhampton, England using his own specially-designed high-capacity rechargeable batteries, although the only documentation is a photograph from 1895.

1888, the German Andreas Flocken designed the Flocken Elektrowagen, regarded by some as the first “real” electric car.

1889, Thomas Edison had this car built about 1889 to investigate electricity as a power source for automobiles. The three-wheeled vehicle has two electric motors, each separately connected to one of the front wheels. Having successfully operated the car, Edison put it aside for several years.

1894, the Electrobat, one of the world’s first successful electric automobiles, was patented by Henry G. Morris and Pedro G. Salom.In New York City, a fleet of twelve hansom cabs and one coach, based on the design of the Electrobat II, formed part of a project funded in part by the Electric Storage Battery Company of Philadelphia.

1897, The first self-propelled Taxi’s in London, Walter Bersey’s 1897 cab (as pictured above) were battery powered and had a top speed of 9 mph and a 30 mile range. The Baker range of cars were able to travel 50-80 miles on a single charge, but at a maximum of 14 mph. A batch of 12 cabs entered service for the London Electrical Cab Company on 19 August 1897.

1897, The Londen Electrical Cabs, which charged the same rate as the horse-drawn alternative, proved popular and the fleet expanded to 75 vehicles. However, the heavy weight of the vehicle’s batteries caused excessive tire wear, vibration and increased noise.

Six Electric Cars Held Land Speed Record in 19th Century 

1899, The rocket-shaped La Jamais Contente, driven by Camille Jenatzy, which broke the 100 km/h (62 mph) speed barrier by reaching a top speed of 105.88 km/h (65.79 mph) in 1899.

     1899, and 1900, more electric cars were sold in the United States than any other type of vehicle.

      1903, London boasted more electric cars than vehicles with internal combustion engines.

 1914, Edison and Henry Ford himself planned to develop a low-cost electric car.  

Although better known for inventions such as the light bulb and motion pictures, Edison also designed three electric cars using his nickel-iron Edison Storage Batteries.

By the time Edison’s battery (a longer-lasting, lighter-weight improvement over previous lead-acid batteries) was ready for this journey, electric cars had already been on the road for more than 15 years.

Thomas Edison Model, 1,000-mile  “ideal tour” in 1910 Hampshire’s Washington.

Cause of Preference ICE V/s EV

ICE cars’ much quicker refueling times and cheaper production costs made them more popular. However, a decisive moment came with the introduction in 1912 of the Self Starter Motor that replaced other, often laborious, methods of starting the ICE, such as hand-cranking.

1920-1935, Decline of Electric Vehicles

Apart from battery electric cars facing rugged competition from gas-fueled cars advances like Ford’s Model T, there was rapid progress made on America’s road infrastructure permitting longer distance travel on motorway systems that complemented long-range capabilities offered by fuel-powered automobiles.

Moreover, advancements in oil extraction technology made fuel cheaper, which made fuel-powered vehicles more fuel-efficient, faster, and require fewer recharges. Consequently, by 1935, electric vehicles had nearly vanished, and the remaining ones were mainly restricted to niche markets, such as taxi and delivery van services within cities.

Renewed Interest in Electric Cars

The journey of electric automobiles passed another milestone in the late 20th century. The public sphere underwent a substantial shift during this period, bolstered by external and internal factors in the automotive industry.

60s & 70s, Electric Cars Revival

1960s, decades gasoline cars dominated because oil was so profitable. However, rising fuel costs caused drivers to look for an alternative power source.

This helped to make electric vehicles look cutting edge, as well as the cost of fuel reviving electric cars’ popularity once again.

1970s, saw the biggest step towards the electric cars we know today.

1968-1973, Gas Prices Sparked Increased Interest in Electric Vehicles

In an unexpected turn, brought upon us largely due to geopolitics, oil prices surged worldwide from 1968 onwards. Embodied most notably by the 1973 Oil Crisis, these years witnessed an acute black gold shortage with subsequent skyrocketing prices.

Consequently, countries around the globe spontaneously started their search for alternate fuel sources – sparking a renewed interest in electric vehicles that marked a notable turn in the evolution of electric cars. It offered scope for cost-effectiveness as well as energy efficiency.

1971, Environmental Movement & Interest in EV

Another important story – the rise of environmental consciousness worldwide. Most representatives were instances like Earth Day’s inception in 1970 and Greenpeace’s establishment a year later, both potent symbols driving appreciated concerns regarding environmental degradation.

Taking center stage was air pollution from Internal Combustion Engine (ICE) powered vehicles, particularly prominent within city limits. This amalgamation of societal awareness and new academic research diverted attention towards cleaner solutions like electric cars.

New Millennium of Electric Cars Mass Market

Fast forward to the late 20th century and tech gadgets such as computers, to mobile phones and the internet, we entered an age of modern technology. This gave engineers the scientific know-how needed to modernize the electric car.

Start of Rechargeable Lithium-ion Batteries

Stanley Whittingham (British inventor) created the world’s first rechargeable lithium-ion batteries. This is the same electric car battery that we use in electric vehicles today, almost 50 years later!

However, the technology wasn’t quite there yet to make electric cars a serious rival to fuel cars. Although the batteries saw great advancements, but needing recharging more frequently in a time where charging stations were uncommon.

1973, Next Generation’s Electric Vehicles

With enough momentum building behind them, it was no surprise when the American Motor Company launched its innovative “Electrobus” concept in 1973 at the World Energy Conference held in Bucharest.

This revolution ushered into being not just an all-alternative fuel vehicle but an entire line-up of efficient battery-operated buses aimed at mass transit solutions rather than individual mobility efforts thus far seen.

Not to be left behind for long, other companies soon jumped onto this bandwagon, making the 70s a pivotal era in discovering potential attributes distinctive to this new generation of electric vehicles.

1974-1977, Increasing Sales & Popularity of EV

Between 1974 and 1977, the maturing industry saw various companies start “low-speed” electric vehicle production. These EVs became popular alternatives for short commutes, generally limited by suburban boundaries like golf courses and university campuses.

Sales particularly peaked around tight-knit communities – a testament to their efficacy in small-scale local transportation, thereby creating foundations for future growth within this niche.

1979, Decrease in Interest in Electric Cars

However, the latter part of the decade witnessed an abrupt nosedive in interest. Prices crashed as soon as oil-producing countries ramped up the supply lines again towards the end of the decade. Fuel once more emerged as a cheaper alternative to electricity due to its ease of use and mass acceptance.

New Era for Electric Cars

1990-1992, New Regulations Renew Interest in EV

Following the decline in interest in electric cars during the late 20th century, a new horizon dawned at the start of the 1990s that would shape the future of this industry. Legislation played an instrumental role in driving forward the evolution of the electric car. Particularly, California introduced stringent emission standards, which stipulated that by 2003, a certain percentage of all automobiles sold within ‘The Golden State’ had to be Zero Emission Vehicles (ZEVs).

This gave rise to more research and development into creating viable electric vehicles, with many automotive manufacturers acknowledging the potential for these greener alternatives.

1997, Mass Production of Hybrid Cars

Moving through this new era of electric and hybrid vehicles saw one of the most transformative developments in automobile history:

The launching of Toyota’s Prius model in Japan

The world’s first mass-produced hybrid car.

It combined a conventional internal combustion engine with an electric propulsion system, offering consumers improved fuel efficiency and reduced emissions compared to traditional, fuel-engine-powered cars. The subsequent international release saw it become a symbolic representation of eco-conscious driving worldwide.

1999, Innovations in Building Better Electric Cars

As we crossed the end years of the millennium, various industry players heavily invested in plug-in electric vehicles and found innovative approaches to enhance electronic vehicle technology further. Consider Audi’s ‘A2,’ a compact electric car with an impressive 200-kilometer range on a single charge.

This marked the inception of various advancements in battery technology, lighter construction materials, and improved aerodynamic design, perfecting the crucial balance between performance, durability, and cost-efficiency required to make these vehicles more attractive to everyday consumers.

2006, Emergence of Silicon Valley Startups in EV Industry

The significance of Silicon Valley’s entrepreneurial culture is undeniable in shaping wide-ranging trends within industries. It wasn’t long before this tech-centric land saw its first successful electric vehicle and startup: Tesla Motors Inc. Founded by entrepreneur Elon Musk, his bold vision sought to create luxury electric vehicles and establish a robust infrastructure to support sustainably powered transportation.

Setting ambitious targets while delivering technologically sophisticated products with uncompromised visual appeal sparked unprecedented industry interest, leading to more startups venturing into this domain and accelerating the staggering evolution of the electric car we still witness today.

Modern Era of Electric Cars

In this section, we’ll dive into the history of the electric and transition phase. We’ll explore the decisive events that have significantly shifted our perspective and understanding during the modern era in the evolution of the electric car.

2009-2013, Establishment of Nationwide Charging Infrastructure

The advent of a nationwide charging infrastructure marked a turning point for electric vehicles. As battery technology began to advance, providing longer mileage on a single charge than previously feasible, the necessity for an accessible and reliable network of electric vehicle charging stations became even more fundamental.

A significant turning point came when companies took up the challenge of making EV charging as convenient and easy as refueling at traditional petrol stations.

2010, Introduction of 1^st Commercially Plug-in Hybrid

Plug-in electric hybrid vehicles took center stage in 2010, with Chevrolet releasing its Volt model — arguably one of the most influential advancements in automotive history concerning alternative powertrains.

Early hybrids, which relied only on regenerative braking for electricity generation, Plug-in Electric Hybrids gave drivers an option to operate personal vehicles exclusively on electric power — a step forward towards emission-free driving while still allaying range-anxiety concerns sustainable by its fuel-powered generator.

2010, Launch of Nissan’s Leaf EV

Nissan triggered another pivotal event with their introduction of the Leaf — an affordable, mass-market-capable, entirely battery-electric vehicle. Already well-regarded within sustainability circles for bringing zero-emission mobility at an unprecedented scale before, it swiftly emerged as a global bestseller, holding aloft Nissan’s dedication to redefining commuting standards and overall environmental stewardship.

2013, Decrease in EV Battery Costs

During the last decade, a crucial change in the landscape has been the gradual decrease in the cost of producing lithium-ion batteries, the cornerstone of electric vehicle technology. 

This trend, attributed primarily to improvements in manufacturing efficiency and scaling economies of larger production volumes, augments as further reductions are expected to bring electric vehicles head-to-head with conventional internal combustion engine cars in price.

2014, Diverse Range of EV Options

The next significant metamorphosis in EVs was brought forth by auto manufacturers’ acknowledgement that one size does not fit all when it comes to our driving needs or lifestyle choices. The lineup expanded beyond compact cars and sedans, evolving into virtually every vehicular category, including SUVs, trucks and even motorcycles.

There are more EV and Automotive Past, Present & Futures businesses which we will explore in next episodes of Monthly AUTOMARK’ S Article “Grow Automotive Grow Pakistan”, INSHALLAH.

‏This exclusive article has been written by @Mumtaz Hussain, and published in Automark’s May-2025 printed/digital edition.

Abstract

This second article in the series on EVs in Pakistan: Driving the Green Shift chronicles the various pillars that qualify power for the ambitions of electric mobility in Pakistan: charging infrastructure, renewable energy integration, smart grid modernization, and battery recycling. It going onward discusses the current status: 40 chargers on the motorway, compared with global best practices benchmarked against 49,300 expressway bay in China and 25,202 public charging stations in India; past solar energy applications in Pakistan (4.1 GW of net metered capacity); and suggests a phased road map for achieving 30% EV penetration by 2030.

Introduction

The first article laid down a strategic roadmap for Pakistan’s EV introduction, setting ambitious targets under the NEVP 2020 and identifying barriers in the marketplace. This time, let us talk about the how: how will we build a ubiquitous charging network, harness clean energy, digitize the grid, and circle battery life back in? Strong infrastructure and circular practices are key for overcoming range anxiety and ensuring resilience in the grid as EVs scale throughout urban and rural Pakistan.

1. Current Infrastructure Landscape

1.1 Motorway Charging Rollout

The government approved in November 2024 the establishment of 40 fast-charging stations along the national motorways (M1-M5), approximately every 120 km apart, giving preferential tariff to the operators at PKR 39.75/unit for the motivation of operators.

1.2 Framework of the Restructuring

For EV-ready parking and chargers in all new or renovated buildings, NEECA’s ECBC 2024 is oldest on the list.

With an attraction of making higher than one hundred percent improvement, NEVP 2020 encourages converting more than 3,000 legacy CNG/fuel stations into EV charging hubs.

Matric	Value
Approved Motorway Stations	40
Planned Public Stations (2025–26)	50
Legacy CNG Stations (Conversion Pool)	3000

2. Global Benchmarks: Inspiration for Pakistan

Country	Stations	Key Initiative
China	49,300 (expressway bays)	Mandatory EV zones, public–private rollouts
India	25,202 (public chargers)	FAME‑II & PM E‑DRIVE, highway & urban focus

China’s expressway network now features charging bays at 97% of service areas, driving a 45% year‑on‑year surge in EV sales . India aligned infrastructure with demand, deploying 25,202 public chargers by December 2024 under FAME‑II .

3. Renewable Energy Integration

3.1 Solar Capacity Surge

• Net‑Metered Solar: Expanded from 1.3 GW (mid‑2023) to 4.1 GW (Dec 2024) .
• Panel Imports: 22 GW of solar modules imported in 2024, ranking Pakistan among the top global markets .

3.2 Deployment Recommendations

• Rooftop Solar Canopies: Over public parking lots in Lahore and Karachi.
• Highway Solar Farms: Co‑locate ground‑mounted arrays with BESS‑backed fast chargers.

4. Smart Grid Modernization

4.1 Grid Challenges

• T&D Losses: 18.31% of generated power lost in transmission & distribution .
• Load‑Shedding: Rural areas face 6–12 hours/day of outages .

4.2 Digital & Demand‑Side Solutions

Technology	Application	Benefit
AMI & IoT Sensors	Real‑time load monitoring	Rapid fault detection
Time‑of‑Use Tariffs	Off‑peak charging incentives	Flattened demand curves
Vehicle‑to‑Grid	EVs supply power back to grid	Peak‑load support

Pilot AMI deployments (2025–26) and V2G trials with fleets (2027–28) will enable a fully digital grid by 2030 .

5. Battery Recycling & Circular Economy
Prototype EV battery recycling plant.

As EV volumes grow, sustainable end‑of‑life management for high‑value batteries is critical:

• Global Leaders: Li‑Cycle’s new facility in New York will process enough material to support production of 180,000 EVs/year .
• Circular Practices in Pakistan:
  • Battery Buy‑Back Programs: Incentivize return of spent packs to certified recyclers.
  • Local Material Recovery: Develop pilot plants in SEZs for mechanical & hydrometallurgical processing.
  • Second‑Life Batteries: Repurpose EV packs for stationary storage, supporting grid stability and renewable integration.

6. Strategic Roadmap & Policy Enablers

7. The Emergence of Local EV Manufacturing

Electric vehicle assembly in Pakistan.

The domestic EV manufacturing sector is gaining momentum:

Licenses Granted: The government has issued licenses to 57 EV manufacturers, introducing tax exemptions and reducing charging tariffs to stimulate growth.

Entry of BYD: The Chinese EV giant BYD is set to establish a plant in Karachi by 2026 and will scale that plant to produce 100,000 electric vehicles annually by 2030.

8. Investment Outlook and Public Private Partnerships

In view of the emerging collaboration between public agencies and private firms for EV station promotion.

Realize aggressive EV objectives that involve Pakistan in the pursuit of:

• Joint ventures between local manufacturers and foreign EV technology leaders (e.g., MG Motors, BYD, JAC Motors).
• SEZs for EV Ecosystem: SEZs set up for EV start-ups and battery recycling units with customs and tax exemptions.
• Mobilization of international financing under the Green Climate Fund (GCF) and climate tech bonds is needed for green financing and climate funds.

9. Roadmap from now to 2030:

The Way Forward Based on trends now unfolding and findings from the second article, here is a three-phased rollout proposal for EV infrastructure development:

Phase 1 (2024-2025): Foundational – Pilot launch of fast-charge corridors in the Lahore-Islamabad-Karachi triangle. – Roof-top solar and EV charger pilot projects in public institutions. – Modify the Building Code of the ECBC for EV-readiness in all buildings.

Phase 2: Expansion (2026-2028) Roll out 1000 additional chargers on urban territories and highways. Activate 3 battery recycling hubs and localized cell testing labs. Extend V2G pilot programs with DISCOs Supporting.

Phase 3: Maturity (Readings on EV adoption)- 2030: 100% digital metering for the EV grid integration; 30% conversion of two- and three-wheelers to electric; launch of a national EV monitoring and sustainability dashboard.

Conclusion

Pakistan is now on the verge of a transportation revolution. As it addresses the challenges of energy and emissions in this country, a focused effort into infrastructure expansion, renewable energy integration, as well as smart grid transformation will serve to clear some of the roadblocks in that vision. This vision’s success will depend not just on policies and technologies but on cohesive partnerships, public participation, and future-ready investments. This infrastructure development is not simply putting up chargers; rather, it is about charging the country to energy independence and environmental resilience.

References

1. NEECA Energy Code 2024 – neeca.gov.pk
2. NEPRA EV Tariff Update 2025 – profit.pakistantoday.com.pk
3. TEC Spectrum EV Infrastructure Report – tecspectrum.com
4. World Bank Renewable Integration Report 2024
5. Ministry of Industries, Pakistan – EV Manufacturing Licenses
6. BYD Pakistan Joint Venture News – dunyanews.tv

This exclusive article has been written by @Hamid Tariq and published in Automark’s May-2025 printed/digital edition.

In the April 2025 Automark edition, we explored the foundational framework of our Automotive localization efforts, emphasizing the need for a well-defined strategy, policy alignment, and active industry participation. While those fundamentals are critical to initiate progress, this follow-up delves deeper into the systemic gaps that hinder sustainable localization. From material sourcing to digital manufacturing, and from testing infrastructure to EV preparedness, the true challenge lies not just in local assembly but in building a resilient and future-proof ecosystem. While the initial emphasis on policy and participation provides the necessary impetus, the true challenge lies not merely in the act of local assembly, but in cultivating a deeply integrated and self-sustaining industry. This requires a critical examination and strategic remediation of weaknesses across the entire value chain, from the very raw materials that enter the manufacturing process to the advanced digital technologies shaping modern production.

The Bigger Picture: Why Localization Matters More Than Ever. Localization for our auto industry isn’t merely putting cars together, it is about developing an independent industrial base that can sustain anything from raw material treatment to high-technology component manufacturing. For us, it translates into cutting back on import dependence, generating jobs, stabilizing car prices, and saving foreign exchange reserves, but genuine localization can’t be done in a vacuum. It needs to be an all-country effort across various industries, stable government policies, access to advanced technology, and most importantly, a well-organized, scalable supply chain.

The Key Barriers to Achieving Full Localization: Despite the obvious advantages, we encounter major obstacles to complete localization. Some of the main challenges include:

1. Low Production Volumes: Mass production is needed for a successful localization process. Without economies of scale, producers cannot make local sourcing profitable. Local suppliers might not be interested in producing components unless there is a guaranteed, high-volume demand. As such, producers are compelled to use costly imports, maintaining costs high.

2. Technology and Expertise Deficit An increasingly changing world automotive industry has introduced new technologies such as electric vehicles (EVs), hybrid cars, and autonomous driving technologies to the scene. Yet, our industry is not developed enough to manufacture high-tech components such as lithium-ion batteries, power electronics, or advanced safety systems. Domestic firms do not have the proper infrastructure and know-how to ensure the standards necessary for such high-tech components.

3. Lack of National Testing and Certification Infrastructure. For local components to be acceptable to the market, they have to be stringently tested and certified. We do not have full-fledged National Automotive Testing and Certification Centers (NATCCs), which compels the producers to get international certification for locally manufactured components. Not only is this costly, but it also slows down the process of localization. In the absence of in-house testing facilities, we are still at a disadvantage.

4. Frequent Policy Changes frequent changes in government responsibilities, taxes, and tariffs discourage long-term planning in our auto industry. The uncertainty and lack of clarity in auto policies discourage manufacturers from investing in localization efforts. A more stable and investor-friendly policy environment is important to ensure steady growth in local manufacturing.

5. The Bottleneck of Material Sourcing. One of the most significant systemic gaps hindering deep localization is the fragile and often underdeveloped local material sourcing infrastructure. While assembly operations may bring some immediate local economic activity, true value addition and cost competitiveness are contingent on the ability to source high-quality raw materials and components domestically. This necessitates. Pakistan needs strategic investment in foundational industries like steel, plastics, and rubber production, ensuring they meet the stringent quality and volume requirements of the automotive sector. Encouraging and supporting the growth of local component manufacturers capable of meeting OEM standards is crucial. This requires technology transfer, access to financing, and mentorship programs.

Regional Success Stories:

Learning from Vietnam and Thailand: We are not the first developing nation to face these hurdles. Other Asian economies have made remarkable progress by addressing similar issues strategically. Thailand: Southeast Asia’s Automotive Powerhouse Thailand’s success story is the result of long-term planning and deliberate policy direction.  Key initiatives taken by the Government and industry to strengthen. 

• Local Supplier Development Programs: The government worked with foreign OEMs to train and develop local Tier-2 and Tier-3 suppliers. 

• Stable Auto Policy (BOI): Incentives through Thailand’s Board of Investment (BOI) attracted big players like Toyota, Honda, and Mitsubishi.

• Testing and R&D Infrastructure: Thailand established well-equipped testing centers, enabling local components to meet global standards.

• Eco-car Program: This initiative not only promoted fuel-efficient vehicles but also ensured that local suppliers became part of global supply chains.

Vietnam: Rapid Transition to Electric Vehicle Localization Vietnam’s strategy, particularly through VinFast, has rapidly moved from CKD assembly to full-scale EV manufacturing.

• Technology Transfer Agreements: VinFast partnered with international firms to absorb technology and kick-start local production. 

• State Support for Localization: Incentives and tax exemptions were given to companies localizing EV batteries, motors, and software.  • EV Ecosystem Investment: Parallel investment was made in charging stations, local battery plants, and even AI-based EV architecture.

The core takeaway for Pakistan’s automotive localization efforts is clear: true and lasting success transcends simply attracting foreign players to set up assembly plants. While foreign direct investment (FDI) is a crucial catalyst, it must be strategically leveraged to foster genuine indigenous capabilities. The path to a resilient and thriving local automotive ecosystem lies in actively pursuing joint development programs, rigorously ensuring technology sharing, and fundamentally empowering our local vendors. Pakistan’s automotive localization strategy must evolve beyond simply attracting foreign assembly.

True success lies in a proactive and strategic approach that prioritizes joint development programs to build indigenous R&D, ensures genuine technology sharing to upskill the workforce and industry, and fundamentally empowers local vendors to become capable and competitive suppliers. This holistic approach will pave the way for a resilient, innovative, and truly localized automotive ecosystem that benefits the national economy and empowers local talent.

How We Can Accelerate Localization: To replicate this success, we need to take a multi-dimensional approach to breach these barriers and unleash the potential of our auto industry. Localization is not a Band-Aid solution; it’s a long-term game that needs to involve the full engagement of all the stakeholders: government, producers, suppliers, and consumers.

We can become a leader in the automotive sector, but only if we work on filling up the structural deficiencies and investing in our local competencies. The future is challenging, but with sound policies, collaboration, and investment, we can create a successful, localized auto industry. Picture a world where most of our cars are made locally, which makes them more accessible to consumers and makes us more competitive in the global auto industry.

The journey to this vision starts today, with our shared commitment to localization.

• Creating a Structured Supply Chain Localization initiative cannot be accomplished without a structured and strong supply chain. All levels of the supply chain, from raw materials sourcing to finished parts, must be aligned and prepared to serve local production. Suppliers’ active involvement at all levels will be essential to guarantee the timely delivery of quality parts at competitive prices.

• Collaboration with Foreign Automakers:  Collaboration with international automakers would help speed up the localization process immensely. Such collaborations should be aimed at technology transfer, component development, and prototyping. With the use of the experience of renowned global players, we can improve our manufacturing ability in no time and conform to international standards.

• Material Localization: Focus on material localization is a critical aspect that is usually neglected. To minimize costs, local steel, aluminum, and plastic component production will be vital. But without upstream industries specializing in these materials, component localization will never be achieved. Setting up facilities for the manufacturing of high-quality materials such as steel and aluminum will make local component production sustainable and affordable.

Capacity Building for EV Components: While this article focuses on conventional vehicles, it’s key to consider the future of electric vehicles (EVs). We need to start localizing EV components such as batteries, power electronics, and charging technology. With growing demand for EVs across the globe, there will be a greater demand for local EV components. This is a strategic chance to establish Pakistan as a regional center for EV component manufacturing.  

• Adoption of AI and Digital Manufacturing:  In order to stay competitive in the global auto industry, we need to adopt automation, artificial intelligence (AI), and digital manufacturing technologies. These technologies will enable our manufacturers to produce parts with improved accuracy, consistency, and scalability, maintaining high standards of quality commensurate with international standards.

• Government Incentives and Policy Stability: A stable, long-term policy framework will be required to generate confidence in the minds of investors and producers. Clear, consistent tax, tariff, and duty policies will promote long-term investment in domestic production. Also, providing tax incentives, subsidies, and low-interest loans to manufacturers and suppliers will render local sourcing a more desirable option.

Takeaway from this article:

Localization is not an endpoint; it is a constantly changing process. We need to see it not only as a money-saver, but as a method of developing a globally competitive automotive industry. While the initial steps towards automotive localization in Pakistan, as discussed in the April 2025 Automark edition, are commendable, achieving sustainable and impactful localization requires a deeper and more systemic approach.

Addressing the gaps in material sourcing, embracing digital manufacturing, establishing a robust testing infrastructure, and proactively preparing for the EV revolution are not merely incremental improvements; they are fundamental prerequisites for building a resilient, competitive, and future-proof automotive ecosystem in Pakistan. The true measure of success will lie not just in the number of vehicles assembled locally, but in the depth and strength of the entire domestic value chain.

The experiences of Vietnam and Thailand give unequivocal blueprints. But the true secret lies in our capacity to act consistently, coordinated, and with vision. By investing in material industries, enabling our local suppliers, and adopting future tech, we can finally graduate out of the CKD cycle and take control of our automotive fate.

This exclusive article has been written by @muhammad-rafique, and published in Automark’s May-2025 printed/digital edition.

Electric bikes and scooters are no longer futuristic concepts or niche vehicles they are now a growing reality on Pakistan’s roads. As rising fuel costs push consumers to seek cost-effective alternatives, electric two-wheelers (E2Ws) have emerged as a practical, eco-friendly, and increasingly popular mode of transportation.

According to data from the Engineering Development Board (EDB), the production of electric two-wheelers in Pakistan has surged by over 200% in the last four years. In the fiscal year 2021–2022, production stood at 7,377 units, which soared to 22,404 units by 2024–2025 (July to March). This growth reflects a broader transformation in the way Pakistanis, particularly urban commuters, are approaching mobility.

Women Driving the Change

One of the most notable trends in this electric revolution is the increasing adoption of electric scooters by women, especially in urban centers such as Islamabad and Punjab’s metropolitan areas. As per the Excise and Taxation Department, between May 2023 and May 2024, 780 electric bikes were registered under women’s names in Islamabad alone, a small but symbolically significant number, considering the broader cultural shift it indicates.

For many women, electric scooters offer a blend of convenience, cost-effectiveness, and independence. The ability to charge the vehicle at home, coupled with a range of up to 100 kilometers per charge, makes them ideal for daily commuting needs, often lasting two to three days without requiring a recharge.

Economic Viability and Savings

Electric bikes provide significant operational savings compared to fuel-powered motorcycles. While a conventional petrol bike costs approximately Rs5 per kilometer (Estimated), electric bikes factoring in peak electricity rates operate at Rs2 to Rs2.5 per kilometer (Incase of solar cost will be much lower). This translates to a 50–60% reduction in running costs, offering much-needed relief to consumers burdened by inflation and rising fuel prices.

Additionally, electric bikes are low-maintenance machines. With no need for oil changes, spark plug replacements, or regular engine tuning, users save considerably over the life of the vehicle. These long-term cost benefits are playing a crucial role in accelerating adoption, particularly among budget-conscious riders.

Industry Momentum and Policy Support

The EDB has so far issued manufacturing licenses to 34 companies for electric two and three-wheelers. This initiative is a part of Pakistan’s Electric Vehicle Policy 2020–2025, which aims to have 50% of all new two and three-wheeler sales be electric by 2030.

Major players in the auto industry are responding to this momentum by launching locally assembled electric scooters and bikes. New startups and established manufacturers alike are contributing to a more diverse product range, improved designs, and better localization of components.

Lahore Leading the Charge

While adoption is growing nationwide, Lahore has emerged as the biggest EV two-wheeler market in Pakistan. This trend is largely driven by the city’s growing middle class, high fuel costs, and increasing awareness of environmental sustainability. What sets Lahore apart is the widespread use of solar energy to charge electric scooters, especially among households and small businesses that have installed rooftop solar panels.

This solar-backed charging model not only reduces electricity costs but also minimizes the carbon footprint associated with EV usage, delivering strong environmental outcomes. It’s a perfect example of how renewable energy and electric mobility can complement each other in creating a greener future for urban transport.

Challenges Ahead

Despite the promise, challenges remain. One of the biggest concerns for users is the battery lifecycle. Most lithium-ion batteries require replacement every 3 to 5 years, which can be a significant investment. However, this cost is largely offset by the money saved on fuel, oil changes, and air filters over that time.

Moreover, while the initial cost of parts and components is higher due to reliance on imported technology, it is expected to decrease as the market grows and local manufacturing gains traction.

Another issue is the lack of a widespread charging infrastructure, especially in smaller towns and remote areas. Though the current user base relies largely on home charging, scaling up the network of public charging points will be crucial for mass adoption.

The Road Forward

The electric two-wheeler segment in Pakistan is not just a passing trend—it’s a structural shift in how people commute, particularly in urban areas. From students and working women to delivery riders and small business owners, the appeal of electric bikes spans across multiple demographics.

With continued policy support, infrastructure development, and market-driven cost reductions, the electric mobility ecosystem in Pakistan is on a strong growth trajectory. If current trends hold, we may soon see electric two-wheelers dominating our roads—not just as an environmentally friendly choice, but as the most economical and practical one.

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Syed Rehan Ashraf is an Industrial Engineer and mobility technology enthusiast, currently working at the University of Management and Technology. He actively writes about sustainable transportation, electric vehicles, and emerging trends in Pakistan’s auto sector.

This exclusive article has been published in Automark’s May-2025 printed/digital edition.

The Bigger Picture: Why Localization Matters More Than Ever. Localization for our auto industry isn’t merely putting cars together, it is about developing an independent industrial base that can sustain anything from raw material treatment to high-technology component manufacturing. For us, it translates into cutting back on import dependence, generating jobs, stabilizing car prices, and saving foreign exchange reserves, but genuine localization can’t be done in a vacuum. It needs to be an all-country effort across various industries, stable government policies, access to advanced technology, and most importantly, a well-organized, scalable supply chain.

The Key Barriers to Achieving Full Localization: Despite the obvious advantages, we encounter major obstacles to complete localization. Some of the main challenges include:

1. Low Production Volumes: Mass production is needed for a successful localization process. Without economies of scale, producers cannot make local sourcing profitable. Local suppliers might not be interested in producing components unless there is a guaranteed, high-volume demand. As such, producers are compelled to use costly imports, maintaining costs high.

2. Technology and Expertise Deficit: An increasingly changing world automotive industry has introduced new technologies such as electric vehicles (EVs), hybrid cars, and autonomous driving technologies to the scene. Yet, our industry is not developed enough to manufacture high-tech components such as lithium-ion batteries, power electronics, or advanced safety systems. Domestic firms do not have the proper infrastructure and know-how to ensure the standards necessary for such high-tech components.

3. Lack of National Testing and Certification Infrastructure: For local components to be acceptable to the market, they have to be stringently tested and certified. We do not have full-fledged National Automotive Testing and Certification Centers (NATCCs), which compels the producers to get international certification for locally manufactured components. Not only is this costly, but it also slows down the process of localization. In the absence of in-house testing facilities, we are still at a disadvantage.

4. Frequent Policy Changes frequent changes in government responsibilities, taxes, and tariffs discourage long-term planning in our auto industry. The uncertainty and lack of clarity in auto policies discourage manufacturers from investing in localization efforts. A more stable and investor-friendly policy environment is important to ensure steady growth in local manufacturing.

5. The Bottleneck of Material Sourcing: One of the most significant systemic gaps hindering deep localization is the fragile and often underdeveloped local material sourcing infrastructure. While assembly operations may bring some immediate local economic activity, true value addition and cost competitiveness are contingent on the ability to source high-quality raw materials and components domestically. This necessitates. Pakistan needs strategic investment in foundational industries like steel, plastics, and rubber production, ensuring they meet the stringent quality and volume requirements of the automotive sector. Encouraging and supporting the growth of local component manufacturers capable of meeting OEM standards is crucial. This requires technology transfer, access to financing, and mentorship programs.

Regional Success Stories: Learning from Vietnam and Thailand: We are not the first developing nation to face these hurdles. Other Asian economies have made remarkable progress by addressing similar issues strategically.

Thailand: Southeast Asia’s Automotive Powerhouse Thailand’s success story is the result of long-term planning and deliberate policy direction.  Key initiatives taken by the Government and industry to strengthen.

• Local Supplier Development Programs: The government worked with foreign OEMs to train and develop local Tier-2 and Tier-3 suppliers. 

• Stable Auto Policy (BOI): Incentives through Thailand’s Board of Investment (BOI) attracted big players like Toyota, Honda, and Mitsubishi.

• Testing and R&D Infrastructure: Thailand established well-equipped testing centers, enabling local components to meet global standards.

• Eco-car Program: This initiative not only promoted fuel-efficient vehicles but also ensured that local suppliers became part of global supply chains.

Vietnam: Rapid Transition to Electric Vehicle Localization Vietnam’s strategy, particularly through VinFast, has rapidly moved from CKD assembly to full-scale EV manufacturing.

• Technology Transfer Agreements: VinFast partnered with international firms to absorb technology and kick-start local production. 

• State Support for Localization: Incentives and tax exemptions were given to companies localizing EV batteries, motors, and software. 

• EV Ecosystem Investment: Parallel investment was made in charging stations, local battery plants, and even AI-based EV architecture.

The core takeaway for Pakistan’s automotive localization efforts is clear: true and lasting success transcends simply attracting foreign players to set up assembly plants. While foreign direct investment (FDI) is a crucial catalyst, it must be strategically leveraged to foster genuine indigenous capabilities. The path to a resilient and thriving local automotive ecosystem lies in actively pursuing joint development programs, rigorously ensuring technology sharing, and fundamentally empowering our local vendors.

Pakistan’s automotive localization strategy must evolve beyond simply attracting foreign assembly. True success lies in a proactive and strategic approach that prioritizes joint development programs to build indigenous R&D, ensures genuine technology sharing to upskill the workforce and industry, and fundamentally empowers local vendors to become capable and competitive suppliers. This holistic approach will pave the way for a resilient, innovative, and truly localized automotive ecosystem that benefits the national economy and empowers local talent.

How We Can Accelerate Localization: To replicate this success, we need to take a multi-dimensional approach to breach these barriers and unleash the potential of our auto industry. Localization is not a Band-Aid solution; it’s a long-term game that needs to involve the full engagement of all the stakeholders: government, producers, suppliers, and consumers. We can become a leader in the automotive sector, but only if we work on filling up the structural deficiencies and investing in our local competencies. The future is challenging, but with sound policies, collaboration, and investment, we can create a successful, localized auto industry. Picture a world where most of our cars are made locally, which makes them more accessible to consumers and makes us more competitive in the global auto industry. The journey to this vision starts today, with our shared commitment to localization.

• Creating a Structured Supply Chain Localization initiative cannot be accomplished without a structured and strong supply chain. All levels of the supply chain, from raw materials sourcing to finished parts, must be aligned and prepared to serve local production. Suppliers’ active involvement at all levels will be essential to guarantee the timely delivery of quality parts at competitive prices.

• Collaboration with Foreign Automakers:  Collaboration with international automakers would help speed up the localization process immensely. Such collaborations should be aimed at technology transfer, component development, and prototyping. With the use of the experience of renowned global players, we can improve our manufacturing ability in no time and conform to international standards.

• Material Localization: Focus on material localization is a critical aspect that is usually neglected. To minimize costs, local steel, aluminum, and plastic component production will be vital. But without upstream industries specializing in these materials, component localization will never be achieved. Setting up facilities for the manufacturing of high-quality materials such as steel and aluminum will make local component production sustainable and affordable.

Capacity Building for EV Components: While this article focuses on conventional vehicles, it’s key to consider the future of electric vehicles (EVs). We need to start localizing EV components such as batteries, power electronics, and charging technology. With growing demand for EVs across the globe, there will be a greater demand for local EV components. This is a strategic chance to establish Pakistan as a regional center for EV component manufacturing.  

• Adoption of AI and Digital Manufacturing:  In order to stay competitive in the global auto industry, we need to adopt automation, artificial intelligence (AI), and digital manufacturing technologies. These technologies will enable our manufacturers to produce parts with improved accuracy, consistency, and scalability, maintaining high standards of quality commensurate with international standards.

• Government Incentives and Policy Stability: A stable, long-term policy framework will be required to generate confidence in the minds of investors and producers. Clear, consistent tax, tariff, and duty policies will promote long-term investment in domestic production. Also, providing tax incentives, subsidies, and low-interest loans to manufacturers and suppliers will render local sourcing a more desirable option.

Takeaway from this article:

Localization is not an endpoint, it is a constantly changing process. We need to see it not only as a money-saver, but as a method of developing a globally competitive automotive industry. While the initial steps towards automotive localization in Pakistan, as discussed in the April 2025 Automark edition, are commendable, achieving sustainable and impactful localization requires a deeper and more systemic approach.

Addressing the gaps in material sourcing, embracing digital manufacturing, establishing a robust testing infrastructure, and proactively preparing for the EV revolution are not merely incremental improvements; they are fundamental prerequisites for building a resilient, competitive, and future-proof automotive ecosystem in Pakistan. The true measure of success will lie not just in the number of vehicles assembled locally, but in the depth and strength of the entire domestic value chain.

The experiences of Vietnam and Thailand give unequivocal blueprints. But the true secret lies in our capacity to act consistently, coordinated, and with vision. By investing in material industries, enabling our local suppliers, and adopting future tech, we can finally graduate out of the CKD cycle and take control of our automotive fate.

This exclusive article has been written by @muhammad-rafique and published in Automark’s May-2025 printed/digital edition.