By Ayesha Mudassar ISLAMABAD, March 22 (INP-WealthPK): Pakistan has introduced various incentives to encourage the adoption of electric vehicles (EVs) in the country. Talking to WealthPK, Eng Asim Ayaz, secretary of Auto Industry Development Committee (AIDC), said the Auto Industry Development and Export Policy (2021-26) aims to boost the share of EVs to 30% by 2030 and 90% by 2040. However, he said that due to high prices, the current adoption rate of EVs in Pakistan was about only 2%. Under the policy, Asim Ayaz said sales tax on locally-produced EVs had been reduced from 17% to 1%. “To target the export market, the policy aims to encourage innovative technologies, including EVs and hybrids,” he added. Ayesha Khan, territory manager at Pakistan State Oil, told WealthPK that PSO had established an EV charging station in Islamabad to support the government's initiative aimed at promoting the use of EVs. She said that another EV charging station was being set up in Lahore. The official said PSO planned to open more charging stations as the number of EVs grows. She said that the EV sector's main challenges remained establishing a comprehensive charging network, and more importantly, supplying constant power to these stations. Pakistan’s automobile industry has great potential to make a transition to EVs to combat climate change. It is important to note here that the power projects having either been built or being built under the China-Pakistan Economic Corridor have significantly improved Pakistan’s capacity, and the surplus electricity can be used to power the EV charging stations. The government needs to understand that the EV sector is gaining traction around the world, and it must devise a strategic plan to enable automobile companies to work toward laying a solid foundation for the EV sector in future. EVs will assist the economy by cutting fuel prices and shifting the country's energy consumption away from imported oil and toward more domestically-produced energy. Transitioning to a green economy will play a great role in attracting foreign investment. The worldwide automotive manufacturing market was estimated to be worth around $2.7 trillion dollars in 2021. The electric car market was valued at $370 billion, and it is predicted to grow at a compound annual growth rate of 23.35% and reach $1298.32 billion by 2027. In 2021, battery electric vehicles contributed more than 6% of total global car sales. China leads the world in electric car sales; markets in Europe and North America also witnessed significant growth; Germany boosted its exports by 23% to roughly 230,000 units; and Japan climbed by 24% to 27,400 units. According to the World Bank, Pakistan can save billions of dollars on crude oil imports by switching automobiles to hydrogen-powered or battery-operated electric vehicles. In the past, imported automobiles occupied the majority of Pakistan's car market, but locally-produced or assembled cars are now gaining traction. Chinese vehicle manufacturers have also established joint ventures with Pakistani partners. Progress has also been made in supporting industries such as spare parts manufacturing.