ABSTRACT

This piece of writing investigates the potential economic implications and benefits of integrating electric vehicles (EVs) into Pakistan’s transportation sector. The study aims to analyze the economic impact of EV adoption in the context of the country’s ongoing clean energy transition, considering factors such as energy consumption and value chain(s), energy burden, environmental benefits, and financial implications.

Utilizing data from various reliable sources, inter alia, National Transport Research Center (NTRC), Hydrocarbon Development Institute of Pakistan (HDIP), National Electric Power Regulatory Authority (NEPRA), National Transmission and Dispatch Company (NTDC), International Energy Agency (IEA) and Department of Energy of US, this research provides a comprehensive overview of the current state of EVs in Pakistan. The analysis includes a detailed examination of the EV policy issued by the Ministry of Climate Change, the National Electric Vehicle Policy 2019, highlighting its role in promoting EV adoption. The study further investigates the impacts on the aforementioned factors if the EV roll-out could have been planned earlier in resonance with the global trends.

This thesis aims to conduct a comprehensive evaluation of EV adoption as a critical catalyst for the clean energy transition. The study explores the factors influencing EV adoption, assess the environmental and economic impacts, and provides insights into policies and strategies that can promote a sustainable transition to cleaner energy sources. It employs policy analysis using OECD framework evaluation matrix and survey-based insights on the EV policy programming and implementation on the qualitative facet. Moreover, the Bass technology diffusion model is utilized to evaluate the envisaged growth figures. The computed growth figures are then used to calculate the economic impact and externalities in terms of energy outlook, consumer energy burden, emissions and foreign exchange drain on account of import reduction.

The findings of this study suggest that the adoption of EVs can significantly contribute to reducing GHG emissions, decreasing reliance on fossil fuels, and improving energy security in the long run. Furthermore, the economic analysis indicates potential cost savings for consumers in terms of energy burden, and positive effects on the national economy through reduced fuel imports. However, seldom positive dividends are realized in the short run attributed to the initial learning and research phase. It has been estimated that it would require at least 13 years to achieve 50 percent of the EV market share in total vehicle share. Had this happened earlier, today’s grappling situation around current account management and energy crisis could have been well resourced. However, the advantageous aspect to this is that the energy mix in the electricity sector of Pakistan has recently entered into clean energy transition covenants that require massive adoption of renewables. This move, in conjunction with the accelerated roll-out of EVs, would yield more cleaner footprint on the environmental aspect.

This thesis concludes by providing policy recommendations to further enhance the adoption of EVs in Pakistan, emphasizing the need for supportive infrastructure, financial incentives, and public awareness campaigns. The insights from this research aim to guide policymakers, stakeholders, and industry leaders in making informed decisions to facilitate a successful clean energy transition for Pakistan.