PROM-Term Project: Electrical Vehicles

PROM- Term Project
Electrical Vehicles
Increased concern for environmental sustainability has led to rise in international distress. Human
activities have increased the carbon emissions along with other air pollutants. If we zoom into
Pakistan’s situation, the transportation industry to be specific contribute a huge amount to this air
pollution and therefore death (statistics also show that around 140,000 deaths take place solely due
to air pollution). A solution to this issue problem as posed by many countries and now adopted by
Pakistan too is replacing normal fuel-run vehicles with Electric Vehicles (EVs). The government
particularly has expressed their desire to make about 100,000 and more than half a million electric
cars and two to three wheelers EVs, respectively.
This new vehicle category will obviously be positioned as the solution to the environmental
degradation that has been taking place. It is a technology that would be improving living standards
of consumers; not just of the drivers but also the third party who are not directly involved in the
purchase and sale of EVs. These cars would be positioned as the “new future” of the modern world,
having a fresher, younger and exciting outlook towards it.
EVs being a new technology will totally shift the transportation sector of Pakistan. It should be
understood that the older generation may not be completely welcoming towards EVs, having
concerns of their own. Hence, targeting of EVs should be done specific target groups based on
demographics like age, education, income, geographic location and factors like value, preference
and etc. In cases of cars for consumer use, market segmentation is also done on the basis driving
distances covered by different groups. “By focusing on specific driving missions of customers, a
company can match the requirements for a vehicle’s battery capacity to a customer’s needs or
expectations, and thus design different types of EVs for different groups of customers. The company
can also shape its brand and advertising messages and go-to-market strategies for such products
more effectively” (Miao et al., 2014). Hence, product differentiation (to meet the varying functional
needs of consumers) according to market segmentation is crucial to the success of this category.
Research shows that EVs would be used more for short trips due to the battery-related problems.
Therefore, this can be target amore amongst the youth who do not travel for long distances.
Moreover, based on studies and researched done it has been found that people aged from 20-35
with higher education levels are more interested in factors like color, shape or exterior elements like
environmental protection which deems to give them a higher social status amongst their peers.
However, as compared to the slightly older generation ranging from 35-50 are more concerned
about factors like price, safety, and purchase value. According to this if one examines the current
market dynamics of EVs a major factor that reduces the older customer’s willingness to buy EV is the
high cost of these cars. The Electrical Vehicle policy of 2021-2025 introduced “tax breaks, capping of
custom duty, reduction in toll tax, and exemption from FED subsidies and import duty on machinery
for the manufacturing of EVs, but do not offer direct consumer subsidies on the purchase of electric
vehicles.” (Ahmed, 2021). This poses a challenge to the demand and market conditions of EVs in
Pakistan as the high-cost acts as a disincentive. Moreover, consumer grants for EVs are prevalent in
many countries unlike Pakistan. If government does not support the promotion of sales through
incentives like these, the industry would face a market failure. However, the government of Pakistan
has although made an announcement that “importation of EVs will be paid 1 percent of the general
sales tax, but such initiatives can only support the manufactures and the top ranks peoples” (Asghar
et al., 2020). This indicates that the initial sales of EVs could only be expected from the elite class,
with high education and awareness about environmental degradation.
Similarly, if we look at B2B marketing and retailing there are only limited companies selling EVs in
Pakistan for now: Audi, Zyote, MG and BMW. However, companies like KIA that is taking the
automobile by storm has shown keen interest in launching EVs in Pakistan. However, to encourage
them too it is imperative that the government of Pakistan focuses on creating awareness and also by
giving financial incentives to the potential customers and consumers. along with that the whole
market depends heavily on how fast and efficiently the charging infrastructure is built.
References
Ahmed, K. (2021, January 30). Electric vehicle uptake challenge. The International News.
https://www.thenews.com.pk/print/782145-electric-vehicle-uptake-challenge
Asghar, R., Rehman, F., Ullah, Z., Qamar, A., Ullah, K., Iqbal, K., Aman, A., & Nawaz, A. A. (2020).
Electric vehicles and key adaptation challenges and prospects in Pakistan: A comprehensive
review. Journal of Cleaner Production, 123375.
Miao, R., Xu, F., Zhang, K., & Jiang, Z. (2014). Development of a multi-scale model for customer
perceived value of electric vehicles. International Journal of Production Research, 52(16),
4820–4834.
Jawaid, M. Z. (2021, March). The viability of electric vehicles in Pakistan. The Express
Tribune. https://tribune.com.pk/article/97327/the-viability-of-electric-vehicles-in-
pakistan
Ullah, N. (2019). Electric vehicles in Pakistan: Policy recommendations volume I cars.
Energy Inst., Lahore Univ. Manage. Sci., Lahore, Pakistan, Tech. Rep.

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PROM- Term Project

review. Journal of Cleaner Production, 123375.

perceived value of electric vehicles. International Journal of Production Research, 52(16),

Ullah, N. (2019). Electric vehicles in Pakistan: Policy recommendations volume I cars.

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