SBP warns NEV policy faces funding, infrastructure challenges

Mettis Link News reported that the State Bank of Pakistan has pointed to funding, infrastructure and implementation challenges confronting the New Energy Vehicles (NEV) Policy 2025-30. The central bank argues that the electric vehicle shift will rely on a sustainable financing model and well-coordinated policy execution. Its case rests on cutting emissions, since transport generates close to 10% of the nation's carbon output, and on reducing an oil import bill averaging $15.8bn a year.

Output is already moving in the right direction, with electric car production climbing to 137 units in the first half of FY26 from 110 a year earlier. The policy's Rs122bn feebate mechanism, however, depends entirely on demand for conventional vehicles, which are funded through levies of 1% to 3% on their invoice price. Any shortfall in sales of those vehicles could quickly threaten EV subsidies and infrastructure funding, according to the SBP's half-yearly report.

Charging infrastructure is another weak point, as low early adoption is reducing projected commercial returns and discouraging private investment. The central bank suggests state-led charger installations in selected cities, drawing on examples from Indonesia and Brazil, to rebuild private sector confidence. The report also cites China's experience, suggesting heavy vehicles should be phased in, and says the proposed National Energy Vehicles Centre will be key to streamlining regulatory overlaps.