Range-Extended Electric Vehicles (REEVs) could help Pakistan reduce petrol consumption and pollution over time. However, the high cost of importing these vehicles could offset, or even exceed, their potential fuel savings.

An auto expert said REEVs mainly run on electricity. They use a relatively small 1,500cc petrol engine and generator when the battery needs additional power.

Potential Fuel Savings

According to the expert, Pakistan could save more than $1 billion in petrol import costs over five years if the country adds 30,000 REEVs each year.

The savings would come from replacing petrol consumption in conventional vehicles. However, the expert said the current import structure creates a major cost challenge.

A conventional petrol vehicle requires about $8,540 worth of imported parts. By comparison, a REEV requires around $20,000 in imported components.

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That creates an additional import cost of about $11,460 per vehicle. For a fleet of 150,000 REEVs, the additional foreign exchange requirement would reach roughly $1.7 billion.

Tax Revenue Concerns

The expert also pointed to potential tax losses associated with the shift toward REEVs. He estimated the tax loss at around $1.6 billion under the current assumptions.

Therefore, combining the additional import cost with the estimated tax impact could create a significant burden for the national exchequer.

The expert said the potential fuel savings may also be lower than the initial $1 billion estimate. Based on practical fuel-efficiency assumptions, 150,000 REEVs could save up to 124 million litres of petrol over five years.

At current estimated values, that fuel saving would translate into roughly $174 million over the same period.

Local Manufacturing Could Improve Economics

These figures suggest that importing complete REEVs or their expensive components may not deliver the expected economic benefits under the current cost structure.

However, the picture could change if Pakistan develops local REEV manufacturing. Local production could reduce imported component costs and retain more value within the domestic economy.

The auto expert therefore recommended lowering REEV import costs through local manufacturing. He said this could make the technology more beneficial for Pakistan’s economy while also reducing fuel consumption.