Electric Vehicles Could Save Pakistan Over $1 Billion in Fuel Imports

Pakistan could potentially save more than $1 billion in gross fuel imports over five years by putting around 30,000 range-extended electric vehicles on the road annually, according to a scenario developed by industry analysts.

The projection assumes a fleet growing to approximately 150,000 range-extended electric vehicles, or REEVs, over five years.

Under the scenario, those vehicles could collectively replace around 1.2 billion litres of petrol and avoid approximately 2.7 million tonnes of operational carbon emissions compared with similar petrol-powered vehicles.

However, these figures should be understood as estimates rather than guaranteed savings.

Actual results would depend on how far the vehicles are driven, how frequently they operate on battery power, where their electricity comes from and the future prices of petrol and electricity.

What Is the $1 Billion EV Savings Estimate?

The analysis assumes Pakistan adds approximately:

30,000 REEVs every year for five years

That would produce a fleet of:

150,000 vehicles

Industry analysts estimate that these vehicles could displace around 1.2 billion litres of petrol over the period, translating into gross fuel-import savings exceeding $1 billion under the assumptions used.

The same scenario estimates that replacing equivalent petrol-powered travel could avoid around 2.7 million tonnes of operational carbon emissions.

These are scenario-based projections rather than results from an existing national fleet of 150,000 REEVs.

The $1 Billion Figure Is Not a Government Forecast

An important distinction is necessary.

The widely reported $1 billion figure comes from industry analysts assessing a specific REEV adoption scenario.

It should not be attributed directly to Pakistan’s government or to the Pakistan Institute of Development Economics.

PIDE did publish a policy study titled “Future on Wheels” in December 2024 advocating faster electric-vehicle adoption and explaining how EVs could reduce Pakistan’s exposure to imported petroleum.

However, the study provides broader policy recommendations rather than the specific 150,000-REEV, 1.2-billion-litre calculation being reported in October 2026.

For Info-Matix, keeping these two sources separate prevents the analyst estimate from being incorrectly presented as an official PIDE finding.

Pakistan Government Has Its Own EV Savings Estimate

Pakistan’s official New Energy Vehicles Policy 2025–30 also makes a strong economic case for electric mobility.

The policy estimates that meeting its NEV adoption targets could save up to $0.95 billion in oil imports by 2030, equivalent to approximately 1.823 million tonnes of oil equivalent.

The government says Pakistan used around 16.7 million tonnes of oil in 2023, with approximately 77% consumed by the transport sector.

Without greater electrification, transport-sector oil consumption is projected to continue increasing.

The government’s $0.95 billion estimate and the industry analysts’ $1 billion REEV estimate should not be directly compared as identical forecasts because they use different vehicle mixes, timeframes and assumptions.

Pakistan Wants 30% of New Vehicle Sales to Be NEVs by 2030

Under the New Energy Vehicles Policy 2025–30, Pakistan aims for 30% of new vehicle sales to consist of new-energy vehicles by 2030.

The longer-term ambitions are even more substantial:

50% of new vehicle sales as NEVs by 2040
100% of new vehicle sales as NEVs by 2050
A 100% zero-emission vehicle fleet ambition by 2060

The policy covers multiple vehicle categories rather than passenger cars alone.

Two- and three-wheelers are particularly important because motorcycles dominate private vehicle ownership in Pakistan.

What Is a Range-Extended Electric Vehicle?

A range-extended electric vehicle, or REEV, combines an electric drivetrain with an internal-combustion engine.

Unlike a conventional petrol vehicle, the electric motor is responsible for driving the wheels.

The battery provides the primary energy source.

When the battery becomes depleted, a petrol engine can operate as a generator to produce electricity and extend the vehicle’s usable range.

In simplified terms:

Battery → Electric motor → Wheels

while the petrol engine acts primarily as:

Engine → Generator → Electricity

This differs from many conventional hybrids, where the petrol engine can directly contribute mechanical power to the wheels.

Why REEVs Could Suit Pakistan

REEVs could offer a transitional option for countries where public fast-charging infrastructure is still developing.

For normal daily driving, owners may be able to complete much of their travel using battery power.

For longer intercity trips, the range extender can reduce the risk of becoming stranded if a charging station is unavailable.

Some current REEVs can offer roughly 150 to 180 kilometres of battery-only driving under suitable conditions, although real-world range varies substantially by vehicle, weather, speed and driving style.

For a driver whose daily travel is well below that distance, the petrol engine may operate relatively infrequently if the vehicle is charged regularly.

That is what creates the potential for significant petrol savings.

But REEVs Still Use Petrol

REEVs should not be confused with fully battery-electric vehicles.

A battery EV has no petrol engine.

A range-extended vehicle carries both a battery-electric drivetrain and an internal-combustion generator.

Therefore, fuel savings depend heavily on owner behaviour.

A driver who charges at home regularly and completes most trips within electric range may use very little petrol.

A driver who rarely charges the vehicle and regularly travels beyond battery range will rely more heavily on the onboard generator, reducing the potential fuel savings.

This is one of the major uncertainties behind any national fuel-import projection.

How Could 150,000 REEVs Replace 1.2 Billion Litres of Petrol?

The reported estimate is cumulative over five years.

It assumes vehicles are progressively added to the fleet:

30,000 after year one
60,000 after year two
90,000 after year three
120,000 after year four
150,000 after year five

Each vehicle would displace part of the petrol that an equivalent internal-combustion vehicle would otherwise consume.

The actual petrol displacement would depend on annual kilometres driven, fuel efficiency of the comparison vehicle, battery-only usage and charging frequency.

The 1.2-billion-litre estimate should therefore be treated as a modeled outcome rather than a guaranteed national saving.

Gross Fuel Savings Are Not the Same as Net Foreign-Exchange Savings

This is another important distinction.

Replacing petrol with electricity reduces demand for imported petroleum.

But charging EVs also requires electricity.

If that electricity is generated from imported LNG, coal or oil, some foreign-exchange cost remains elsewhere in the energy system.

If the electricity comes from:

Solar
Hydropower
Nuclear power
Wind
Domestic coal
Other locally sourced generation

the reduction in imported energy can be greater.

Therefore, $1 billion in gross petrol-import displacement should not automatically be interpreted as $1 billion in net foreign-exchange savings.

A detailed net calculation would need to account for electricity generation, transmission losses, charging efficiency and the energy mix used to charge vehicles.

Rooftop Solar Could Strengthen the Economics

Pakistan’s rapidly expanding rooftop-solar market could make electric vehicles particularly attractive for some households.

A driver who charges an EV using electricity generated by an existing rooftop solar system can potentially substitute imported petrol with locally generated solar power.

That combination has two possible economic benefits:

Lower household transportation costs.
Reduced national demand for imported fuel.

However, household savings vary enormously.

They depend on vehicle mileage, petrol efficiency of the previous vehicle, solar-system size, battery charging time, electricity tariffs and financing costs.

Claims of very large monthly savings should therefore not be treated as universal results.

Pakistan’s Transport Sector Depends Heavily on Petroleum

Reducing imported petroleum is a central reason Pakistan is promoting electric mobility.

The New Energy Vehicles Policy notes that the country’s transport sector remains highly dependent on liquid fuels and accounts for a significant portion of petroleum consumption.

NEECA similarly says transport accounts for around 30% of Pakistan’s final energy consumption and remains heavily dependent on imported fuel.

This exposes Pakistan to international oil-market volatility.

When crude oil and refined-fuel prices rise globally, the effect can appear through:

A larger import bill
Higher petrol and diesel prices
Pressure on foreign-exchange reserves
Higher transportation costs
Greater inflationary pressure

Reducing petrol consumption therefore has implications extending beyond individual motorists.

Electric Two-Wheelers May Be Even More Important

Passenger cars attract much of the attention around electric mobility, but Pakistan’s vehicle market is dominated by motorcycles.

PIDE notes that around 57% of Pakistani households own only a motorcycle, while only around 6% own a passenger car.

This means mass electrification of motorcycles and three-wheelers could have a particularly large impact on urban fuel consumption.

Pakistan’s official NEV policy reflects this.

It targets more than 2 million electric two-wheelers during the 2025–30 policy period, alongside electric three-wheelers, cars and commercial vehicles.

From a national fuel-saving perspective, affordable electric motorcycles could therefore be as important as expensive passenger EVs.

Charging Infrastructure Remains a Major Challenge

Electric-vehicle adoption cannot scale entirely through vehicle imports and manufacturing.

Pakistan also needs dependable charging infrastructure.

Drivers considering battery-electric vehicles often worry about:

Lack of chargers on motorways
Charging availability outside major cities
Charging time
Reliability of chargers
Electricity supply
Payment systems
Compatibility between vehicles and chargers

REEVs partially reduce this problem because their onboard generator provides additional range when charging is unavailable.

But a larger nationwide charging network remains essential if Pakistan wants significant adoption of fully electric cars.

Upfront Prices Are Still a Barrier

Lower running costs do not necessarily mean an EV is affordable to purchase.

PIDE identified high upfront cost as one of the major barriers to electric-vehicle adoption in Pakistan.

Local manufacturing remains relatively young, production volumes are low and many important components continue to be imported.

This can make an electric vehicle substantially more expensive than a comparable petrol-powered model.

The economics therefore depend not only on fuel savings but also on:

Purchase price
Financing cost
Battery warranty
Resale value
Insurance
Maintenance
Charging access
Ownership period

A vehicle that saves fuel but requires a substantially larger initial investment may take several years to recover its price premium.

Financing Could Determine How Quickly EV Adoption Grows

Industry analysts advocating faster REEV adoption have called for more affordable financing alongside a stable long-term automotive policy.

This issue matters because vehicle purchases in Pakistan are highly sensitive to financing rates.

Lower-cost financing can make the difference between evaluating an EV on its total cost of ownership and rejecting it because of its higher upfront price.

Financing products designed around expected fuel savings could potentially improve affordability, although lenders would still need to account for vehicle depreciation, battery value and credit risk.

Local Manufacturing Matters for the Full Economic Benefit

Importing complete EVs can reduce petroleum consumption but simultaneously create another source of foreign-exchange demand through vehicle imports.

Pakistan therefore gains more economically if increasing EV adoption is accompanied by greater local production.

That could eventually include:

Vehicle assembly
Electric motors
Wiring systems
Power electronics
Chargers
Battery packs
Body and chassis components
Software and control systems

PIDE has argued that Pakistan’s automotive industry needs deeper technological integration and stronger participation in global value chains rather than relying only on conventional protection and localisation policies.

A successful EV strategy therefore involves more than replacing petrol cars with imported electric ones.

EVs Could Also Reduce Carbon Emissions

The analyst scenario estimates approximately 2.7 million tonnes of operational carbon emissions could be avoided over five years through the proposed 150,000-REEV fleet.

Pakistan’s official NEV policy has a broader target.

It estimates its full 2025–30 programme could reduce transport-sector emissions by approximately 4.5 million tonnes of CO2 equivalent by 2030.

The policy also estimates economic benefits of around $405 million from lower health costs and improved productivity associated with reduced emissions.

Again, the two estimates represent different scenarios and should not be combined as though they measure the same fleet.

Electricity Source Determines the Environmental Benefit

Electric vehicles produce no tailpipe exhaust while operating on battery power.

But the full emissions picture depends on where the electricity comes from.

Charging primarily with solar, wind, hydropower or nuclear electricity generally produces greater operational emissions reductions than charging with electricity generated from fossil fuels.

Battery manufacturing also carries an environmental footprint.

The most accurate comparison therefore considers a vehicle’s entire lifecycle rather than tailpipe emissions alone.

Even so, reducing urban tailpipe emissions can have local air-quality benefits because it removes combustion directly from densely populated roads.

What Happens if Pakistan Adds 60,000 REEVs Per Year?

Industry analysts suggest that doubling annual REEV adoption to around 60,000 vehicles could roughly double the modeled fuel and emissions benefits, assuming broadly similar driving and charging behaviour.

In simple terms, that could mean a fleet of roughly 300,000 vehicles after five years.

But national-scale adoption would also require substantially more:

Vehicle supply
Consumer financing
Home charging
Public chargers
Electricity distribution capacity
After-sales service
Trained technicians
Spare parts
Battery support

Fuel savings therefore cannot be considered independently from infrastructure and industrial capacity.

Pakistan Already Has an Official NEV Policy

Electric mobility is no longer simply a proposed policy direction.

The Ministry of Industries and Production currently lists the New Energy Vehicles Policy 2025–30 as an official national policy.

The government says its objective is to reduce dependence on oil, improve energy security, lower emissions and develop Pakistan’s domestic new-energy-vehicle industry.

The policy also establishes adoption targets across two-wheelers, three-wheelers, cars and commercial vehicles.

The challenge now is implementation.

Whether the projected economic benefits materialise will depend on how many vehicles consumers actually purchase and how effectively supporting infrastructure develops.

What Would Pakistan Need to Make the Savings Real?

The $1 billion headline is achievable only under a set of assumptions.

For meaningful national fuel savings, Pakistan would need progress across several areas:

Sustained EV and REEV sales
Affordable vehicle financing
Competitive purchase prices
Reliable home and public charging
Greater use of domestic and renewable electricity
Effective battery warranties
Strong after-sales networks
Local component manufacturing
Stable long-term government policy
Consumer confidence

Without those conditions, vehicle adoption could remain too limited to produce the projected national effect.

Bottom Line

Pakistan could potentially save more than $1 billion in gross fuel imports over five years if around 30,000 range-extended electric vehicles are added annually, according to an industry-analyst scenario.

The resulting 150,000-vehicle fleet could displace an estimated 1.2 billion litres of petrol and avoid around 2.7 million tonnes of operational carbon emissions compared with similar petrol vehicles.

However, the $1 billion figure is a modeled estimate rather than an official government forecast, and actual savings would depend heavily on mileage, charging behaviour, electricity sources and fuel prices.

Pakistan’s official New Energy Vehicles Policy independently estimates that achieving its broader NEV adoption targets could reduce oil imports by as much as $0.95 billion by 2030.

The larger opportunity is clear: replacing imported petrol with increasingly local and renewable electricity could reduce Pakistan’s exposure to global oil prices.

But achieving those benefits will require more than putting electric cars on the road. Affordable financing, charging infrastructure, domestic manufacturing and a stable long-term policy environment will ultimately determine how much Pakistan actually saves.