Electric Cars in Pakistan.
In Pakistan, three cars are locally manufactured for less than 850 cc because that were being manufactured locally, so it was expected that cars would be cheaper, but it is not the case. Now it is expected that after import of electric cars, the rates will be reduced.
Japan’s Suzuki’s Alto car and two Pakistani companies’ Prince Pearl and United Bravo, manufactured on Chinese technology, are assembled or manufactured locally.
There are three types of Suzuki Alto. There is a difference in features. The very basic Alto VX is around Rs. 11 lac 98 thousand. It doesn’t even have an air conditioner. There is an Alto VXR with AC which is priced at Rs. 14 lac 33 thousand.
If you want more features, you have to buy Alto VXL which is priced at around Rs 1.633 lac. Remember this is a small 660cc car.
After Suzuki, Prince’s Pearl is priced at 49 1,149,000, while United Bravo is priced at around 99 1,099,000. Arsha Mir wants to buy Suzuki Alto VXR out of them but her accumulated capital does not allow her to do so.
Automakers have argued that the government charges them so much in taxes that it is not possible for them to produce a cheap car.
The government has made an effort in the budget for the current financial year to make the vehicle accessible to the common man and for this a huge tax exemption has been given on vehicles with less than 850 cc engine and electric vehicles.
After that, locally made vehicles are expected to become cheaper. So will people of Pakistan and the salaried class like be able to buy a car easily now? I think still can’t afford it but why?
First of all, if you see the option of electric vehicle, then there are no such vehicles in Pakistan. No company is building such a car locally.
There will be only one percent sales tax on electric vehicles
According to Shaukat Tareen, finance adviser to the federal government, the government wants “electric vehicles to be made locally in Pakistan.” That is why big tax concessions have been announced for companies.
On the one hand, the sales tax rate on locally assembled electric vehicles will be reduced from 17% to just 1%. Second, value added tax (VAT) will be waived on the import of electric vehicles.
Import of CKD kits for local manufacture of electric vehicles will also be exempted from VAT. CKD kits are basically car parts and parts that are imported and assembled locally to make the car.
Thus, when you do not have to pay VAT on the import of spare parts and you have to pay only one percent sales tax on the sale of the car after it is ready, then the price of this car will definitely be lower.
But where are the electric Cars?
The few electric cars in Pakistan have been imported by consumers. No car manufacturer in the country is yet building an electric vehicle.
The government’s position is that the purpose of the tax breaks is to attract car manufacturers.
Sunil Manj is the chairman of the popular Pak Wells website for news on car sales and the car industry and has a keen eye on the car industry in Pakistan.
He said that the problem of arrival of electric vehicles in Pakistan or their manufacture locally is bigger than tax concessions.
There are no charging stations ‘ for electric Cars.
Sunil Manj said that there are only four charging stations in Pakistan so far. Two of them are in Lahore, one in Karachi and one in Islamabad, meaning there are only four places in the country where you can charge an electric vehicle.
He said that you cannot reach from Islamabad to Islamabad in an electric vehicle without charging.
“It’s like you’re afraid of running out of battery. What would you do if you got lost along the way? So unless there is a network of charging stations in the country, there will be no demand for electric vehicles and if there is no demand, then why would any company want to invest in this.
How Cheap Can 850cc Vehicles Be?
According to the government, taxes have also been reduced on locally made 850 cc and below engine vehicles in the country.
In the new budget, the government has abolished the 2.5% federal excise duty on these vehicles. At the same time, it has announced to reduce the sales tax rate from 17% to 12.5%.
“Such measures by the government are welcome for consumers and the industry,” Pak Suzuki spokesman Shafiq Ahmed Sheikh told the BBC.
However, he said he could not immediately say how much car prices would fall after that because “it will take time to determine.”
According to Sunil Manj’s website PakWales, it is then expected that the three locally made and assembled engines in Pakistan, Suzuki Alto, Prince Pearl and United Bravo, will be priced from Rs 75,000 to Rs 115,000. It will come down to Rs.
Will middle class benefit from this reduction and will it be helpful in reduction of the rates of electric cars?
One consumer said, the problem was that she would not be able to buy a small car made in Pakistan even after the shortage.
“The best of the three would be the Alto VXR for me, which has at least AC and other features and would still cost around Rs 1.4 million. Even if I sell my old car, I will not have enough money to buy it.
According to Arsha, if the price of a new car falls, the price of his old car will also fall. She
Why are car prices higher in Pakistan?
According to Sunil Manj, there are two reasons for this: first, there is no restriction on setting prices, and second, there is a dealer between car manufacturers and the consumer who makes commissions and earns money in premiums.
“As long as these are the two things, it is difficult to reduce car prices in Pakistan. Now, as the price of these cars goes down, the demand will go up, with it the delivery time will go up and then the car will be more expensive for the consumer in terms of premium.