Pakistan’s Energy Minister, Awais Leghari, announced on January 15, 2025, that the country would reduce the power tariff for EV charging stations by 45%. This move is part of Pakistan’s ongoing energy sector reforms aimed at boosting electricity consumption and accelerating the adoption of EVs.
The decision follows a prolonged economic crisis that has led to a significant decline in power consumption. The country’s energy sector is facing an excess in electricity production capacity, which it still needs to pay for under long-term contracts with independent power producers. The reduced tariff is expected to help address this issue by encouraging more electricity use, particularly in the electric mobility sector.
The new tariff, which will come into effect within a month, brings the cost for charging EVs down to 39.70 rupees per unit, a significant decrease from the previous rate of 71.10 rupees per unit. This measure is seen as a step toward making electric vehicles more affordable and accessible to a wider segment of the population.
Leghari emphasized that the success of this initiative hinges on the international community’s commitment to supporting green financing for such projects. Despite pledges of up to $10 billion in green financing following the devastating 2022 floods, these funds have not yet been fully realized. The government hopes that further international support will help catalyze the transition to electric vehicles and renewable energy sources.
In addition to the EV charging tariff reduction, Pakistan’s government is planning to introduce financing schemes for electric bikes and the conversion of two- and three-wheeled petrol vehicles to electric models. The goal is to reduce the country’s reliance on imported fuel, which costs more than $5 billion annually.
One of the main objectives of this initiative is to convert up to 1 million two-wheelers into electric bikes in the first phase. The estimated cost for each conversion is 40,000 rupees, which is expected to save the country around $165 million in fuel import costs per year.
The private sector is also showing interest in the EV market. BYD Pakistan, a collaboration between China’s BYD and Pakistan’s Mega Motors, has expressed confidence that by 2030, up to 50% of all vehicles sold in Pakistan will be electrified in some form. This projection aligns with global trends toward more sustainable transportation systems.
Pakistan’s move to cut the EV charging tariff is expected to play a crucial role in addressing the country’s energy challenges, while simultaneously contributing to its efforts to reduce carbon emissions and enhance sustainability. The shift towards electric mobility is also in line with global targets for reducing fossil fuel consumption and combating climate change.
This policy change reflects Pakistan’s increasing focus on green initiatives and its efforts to modernize its energy infrastructure while reducing dependence on traditional fuel sources. The reduced tariff is expected to create a favorable investment environment, with an internal rate of return of more than 20% for investors in the EV and energy sectors.
