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Pakistan has drafted a National Electric Vehicle Policy (NEVP) with aggressive goals for electric vehicle (EV) adoption. The draft NEVP includes prospective incentives to help develop the market, and several excellent recommendations are found in Electric Vehicles in Transport (LUMS 2019) as well. However, the Ministry of Industries and Production in Pakistan is investigating the policies that other countries have employed to promote EV adoption for the final NEVP and future revisions.
1.1 Country Comparisons
This report explores the primary policy mechanisms for vehicle electrification in several of the top countries for EV deployment as well as mechanisms to drive local manufacturing. It provides examples from Norway, China, the United States, India, Korea, Thailand, Indonesia, the Philippines, and Vietnam.
These countries were generally chosen based on EV market penetration, efforts to promote local manufacturing, and the amount of research available on their policies. Although several countries have higher penetration rates than those explored in this report, the authors considered other aspects that make these case studies apt points of comparison, such as India’s vehicle market similarity to Pakistan and the Association of South-East Asian Nations (ASEAN) region promotion of local manufacturing.
The countries from which the examples are drawn provide important context on several levels. The popularity of specific vehicle types, motor vehicle ownership rates, income levels, and other factors will influence the policy decisions that Pakistan makes. Table 1 summarizes population, income per capita, total registered vehicles, and new passenger car EV sales. Data on two-wheeler, bus, and truck EV sales was not generally available for the countries investigated.
Table 1. Select Metrics for Countries Analyzed
Country Population (UNSD 2020; The World Bank 2020a)Adjusted net national income per capita (USD)
(The World Bank 2020b)
Total Registered Vehicles (WHO 2020) 2019 New Electric Car Sales (IEA 2020) 2019 EV % of All New Car Sales (IEA 2020)
Norway 5,295,619 $66,019 3,969,612 79,640 55.9% United States 327,167,434 $53,490 281,312,446 326,640 2.1% China 1,392,730,000 $7,548 294,694,457 1,060,300 4.9% South Korea 51,606,633 $25,174 25,680,967 31,860 2.1% India 1,312,240,000 $1,740 210,023,289 2,090 0.1% Thailand 65,700,000 $5,556 37,338,139 10,320 1.7% Vietnam 96,208,984 $2,106 50,666,855 Unknown* Unknown Indonesia 266,911,905 $2,990 128,398,594 Unknown* Unknown Philippines 106,598,600 $3,385 9,251,565 Unknown* Unknown
Pakistan 212,215,030 $1,469 21,952,449 Unknown Unknown
*There were 1,086 electric cars registered in Vietnam in 2015, approximately 1,000 electric cars registered in Indonesia in 2017, and 64 electric cars registered in the Philippines in 2017 (Biona
This report explores evidence from several key countries regarding the impacts to electric vehicle (EV) market penetration from financial incentives, road access policies, EV mandates, fuel taxes, discounted electricity rates, charging infrastructure, and government investment in the domestic automotive industry. It reviews EV policies in countries that have demonstrated success deploying EVs or promoting local EV production, focusing on Norway, China, the United States, India, Korea, Thailand, Indonesia, the Philippines, and Vietnam. The report is targeted toward Pakistan, which is in the process of adopting EV promotion policies, but it is applicable to policymakers throughout the world.
Several lessons are apparent from the EV policies in these focus countries:
- Financial incentives are very impactful. Research exploring 2015 EV market shares indicated that subsidies were responsible for approximately 50% of the EV market (Hardman et al. 2018). While battery prices have fallen significantly since 2015 and are projected to continue declining, incentives will likely be important until EVs reach initial price parity with internal combustion engine vehicles (Goldie-Scot 2019). Incentives closer to the point of purchase, such as rebates at the point of sale, are more impactful than income tax credits, which are monetized in the future (Narassimhan and Johnson 2018).
- Granting exclusive access to EVs, such as a prohibition of petroleum-fueled two-wheelers in
Chinese cities can make electric versions very popular (Cherry 2010). Lane access policies, such as granting EVs access to high-occupancy vehicle or bus lanes, may be considered as an effective alternative (Narassimhan and Johnson 2018; Hwang 2015).
- Mandates on automotive manufacturers to sell EVs can be used to shift the financial burden to subsidize the vehicles, but manufacturers may attempt to renegotiate the mandates if EVs are not profitable (McConnell and Leard 2019). Furthermore, relying on mandates without accompanying government incentives can precipitate declining EV sales, as seen in China (Reuters 2019).
- Gasoline prices are significantly correlated with EV adoption (Narassimhan and Johnson 2018). Higher gasoline taxes have been shown to increase both hybrid and EV sales (Belais 2015).
- Electricity rate discounts may be less effective (Narassimhan and Johnson 2018). Increasing gasoline taxes may be a more effective policy implementation than providing special EV charging tariffs.
- Lost revenue from gasoline taxes may reduce funding for roads. Norway and certain U.S. states are exploring replacement fees based on vehicle miles traveled that could account for other factors such as vehicle weight and efficiency as well as driving location and traffic conditions (Kosche 2020).
- Charging infrastructure has an outsized impact on early adopters, so investment in public infrastructure could be valuable at the initial stage of development (Narassimhan and Johnson 2018).
Policies requiring the installation of charging equipment in multifamily residential buildings and businesses can address long-term needs in heavy EV adoption scenarios (Vindangos 2020).
- Policies favoring domestic manufacturers, such as favorable financing or requiring local manufacturing to qualify for subsidies, have proven effective in the development of EVs that meet the needs of the domestic population (Government of India; Electrive.com 2018).
While certain policies have proven effective in specific countries, it is important to consider exogenous variables, such as median household income, vehicle market, and political regime, that might impact EV policy and success in Pakistan. While this report does not examine those factors in detail, it examines EV policies on a country-by-country basis to provide context that might otherwise be omitted.
List of Acronyms
BEV battery electric vehicles
EV electric vehicle
EVSE electric vehicle supply equipment
FAME Faster Adoption and Manufacturing of Electric Vehicles
ICCT International Council on Clean Transportation
NEV New Energy Vehicle
NEVP National Electric Vehicle Policy
NREL National Renewable Energy Laboratory
PHEV plug-in hybrid electric vehicles
VMT vehicle miles traveled
ZEV zero emission vehicle