Pakistan accelerates green mobility, but challenges remain

ISLAMABAD, Apr 03 (APP): Pakistan’s transition to green mobility is underway, yet the gap between ambition and reality remains significant.

Supported by recent policy measures and improving macroeconomic stability, the auto sector has shown renewed momentum, with vehicle sales surpassing 170,000 units in 2025.

At the same time, the government has set an ambitious target of 30% electric vehicle (EV) adoption by 2030. However, new energy vehicles (NEVs) currently account for less than 3% of total car sales, according to 2025 estimates.

This contrast highlights a critical insight: the challenge is no longer solely about demand. The world’s leading NEV manufacturer, BYD, entered Pakistan last year and now offers a diverse portfolio of vehicles on the roads. Other manufacturers have followed suit. Industry experts suggest that the pace of adoption will depend less on available options and more on how effectively policy frameworks evolve to support these vehicles.

Pakistan’s auto sector, which witnessed a strong recovery in 2025, is entering a new phase of growth. With global automakers entering the market and consumer awareness steadily rising, the foundations for an NEV transition are beginning to take shape. The next challenge is converting this early momentum into scalable growth.

At the heart of this transition lies localisation, widely regarded as the backbone of a sustainable automotive ecosystem.

“Localisation creates a multiplier effect across the entire value chain,” said Mashood Ali Khan, former Chairman of PAAPAM. “It enables the domestic auto parts industry to scale, innovate, and integrate into global supply chains.”

Encouragingly, long-term investments are already beginning to materialise. BYD, for instance, is developing a $150 million local assembly plant in Pakistan, demonstrating the kind of commitment that can anchor industrial growth if supported by the right policy environment.

Global markets such as Thailand and Indonesia have shown how consistent incentives and long-term policy clarity can help industries evolve from imports to local manufacturing. For Pakistan, the NEV shift presents a similar opportunity—one that can drive both adoption and industrial development.

However, structural challenges could influence the pace of this transition.

“It’s very easy to import. You just need one declaration, and that’s it,” noted Dr Naveed Arshad, Associate Professor at LUMS. “But for local manufacturing, there are innumerable laws and regulations.”

Given that automotive investments typically require five to seven years to mature, experts emphasise the importance of policy continuity to support long-term commitments, particularly as Pakistan works toward its emission reduction targets for 2030–2035.

There is also growing recognition of the need for forward-looking policy design. Scenario planning, anticipating how global disruptions or future policy shifts might impact the sector, could help reduce uncertainty and strengthen resilience.

“The most significant structural challenge facing the industry today is scale, and sustainable localisation can only happen when there is long-term regulatory clarity,” said Danish Khaliq, Vice President of Sales and Strategy at BYD Pakistan.

“What the industry really needs is consistency and predictability in policy.”

In some international markets, governments have introduced mechanisms to further build investor confidence. Policy-linked risk-sharing frameworks, for example, help cushion the impact of sudden changes, encouraging longer-term commitments from industry players.

For Pakistan, the direction is clear: the building blocks are already in place. Demand is emerging, investment is beginning to flow, and the ecosystem is slowly taking shape.

The next step is refinement—ensuring that policy remains aligned, predictable, and geared toward long-term outcomes. If executed effectively, Pakistan has the opportunity not only to adopt new technologies but also to build an automotive ecosystem capable of sustaining them.