BRIEFING

© 2022 INTERNATIONAL COUNCIL ON CLEAN TRANSPORTATION

APRIL 2022

Zero-emission vehicle
deployment: Europe, Middle East,
and Central & South Asia

Tanzila Khan, Sumati Kohli, Zifei Yang, and Josh Miller

OVERVIEW
Eurasian1 countries accounted for only 5% of the global new vehicle market in 2020, but
a growing vehicle fleet is fueling increases in climate emissions and air quality impacts
in the region. As Figure 1 shows, under currently adopted policies (Baseline scenario),
well-to-wheel CO2 emissions from vehicles (excluding 2&3 wheelers) will reach 1.8
billion tonnes in 2050, about 2 times the 2020 level. An accelerated transition to zero-
emission vehicles (ZEVs2) in the region could instead reduce CO2 emissions to 53%
below the 2020 level by 2050 (Ambitious scenario). ZEV fleets will play an important
role in reducing levels of traffic-related localized air pollution and related health effects,
with especially large benefits if the region also decarbonizes its electricity grid.

2020 - Baseline 958

2050 - Baseline 1,793

2050 - Ambitious 448

Central Asia Eastern Europe Middle East South Asia www.theicct.org

communications@theicct.org
Figure 1. Estimated well-to-wheel CO2 emissions from cars, vans, buses, and trucks in the
Eurasian countries (million tonnes CO2 per year) twitter @theicct

1 Eurasian region for this factsheet includes countries from Eastern Europe (excluding EU-27 countries), the
Middle East, and Central & South Asia (excluding India)
2 Zero-emission vehicle (ZEV) technology includes battery electric vehicles and fuel cell electric vehicles.

BEIJING | BERLIN | SAN FRANCISCO | S Ã O PA U LO | WA S H I N G TO N

 This briefing gives an overview of the status of ZEV development in the Eurasian region
economies. A full version of the work and a complete list of references are available
in the ICCT white paper “A critical review of ZEV deployment in emerging markets.”
Sister briefings focused on the emerging markets of Africa, ASEAN markets, and Latin
America can be found at theicct.org.

ZEV TRANSITION STATUS

Some developing countries in the Eurasia are scaling up electric vehicle (EV)3 sales for
passenger vehicles (PVs) (Figure 2). Ukraine and Jordan have higher EV market shares
than other developing countries in the region, at 1.5% and 1.1%, respectively. However,
these EV shares are still lower than those in larger and more developed vehicle
markets in Eurasia such as the UAE and Israel. Early signs of EV uptake are apparent
in Lebanon, Nepal, Turkey, Serbia, and Belarus, with market shares between 0.1% and
0.3%. As in developing countries in other regions, EV uptake is still at a very early stage
for most countries in the Eurasian region.

4.0%
500 EVs

3.0% Israel
2020 electric passenger vehicle sales share (%)

Singapore
2.0%
Mauritius UAE
Ukraine
Jordan
1.0%

0.7%
Costa Rica
0.6%
Colombia Thailand
0.5%
Chile
0.4%
Uruguay
0.3% Lebanon Nepal
Turkey
0.2% Philippines
Serbia Malaysia
Brazil
0.1% Belarus
South Arica Kazakhstan
Morocco
0.0%
Africa Latin Eastern Middle Central/ ASEAN
America Europe East SouthAsia
Note: Israel, UAE, and Singapore are high-income countries

Figure 2. EV sales share (%) for passenger vehicles of non-ZEV Transition Council (ZEVTC4)
countries of key regions for 2020.
Data Source: EV Volumes5; OICA6; ICCT roadmap model.

A few countries in the region have electric bus stock. Kazakhstan has a total of 230
electric buses as of 2020, a minor portion of their bus stock. Nepal, Serbia, Egypt,
Turkey, Ukraine, and Belarus have fleets of 5 to 61 electric buses.

3 Electric vehicles (EVs) include battery electric vehicles, plug-in hybrid vehicles, and fuel cell electric vehicles.
4 ZEVTC, The Zero Emission Vehicle Transition Council, is made up of Ministers and representatives from some
of the world’s largest and most progressive car markets and ZEV leading countries.
5 EV VOLUMES.COM The Electric Vehicle World Sales Database (2020), https://www.evvolumes.com/.
6 OICA International Organization of Motor Vehicle Manufacturers (2020), https://www.oica.net/production-
statistics/.

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Electric 2&3 wheelers (2&3Ws) are emerging in Eurasia, particularly in South Asia.
Bangladesh has more than 1 million lead-acid battery-operated e-rickshaws7 and
Kathmandu, Nepal has around 1,200 e-rickshaws. 8

ZEV POLICY STATUS

A few Eurasian countries have announced non-legally binding EV targets. Targets for
selected countries include:

» UAE: 30% of annual procurement of government vehicles to be EVs or hybrids from

2030.
» Qatar: 10% of total car population to be electric cars by 2030.
» Israel: 100% of new private vehicle sales to be EVs by 2030.
» Kazakhstan: produce 2000 EVs by 2022.
» Pakistan: 90% of new sales of passenger vehicles, 2&3Ws, buses, and trucks to be
EVs by 2040.
» Sri Lanka: replace 100% of state-owned fleet (including buses) with EVs or hybrids
by 2025; replace 100% of private cars and 2&3Ws with EVs or hybrids by 2040.
» Nepal: 90% of sales of private passenger vehicles (including 2W) and 60% of sales
of (four-wheeler) public transportation be EVs by 2030.
» The capital cities of some countries, such as Belgrade in Serbia, Doha in Qatar,
and Thimphu in Bhutan, are to set targets for electric buses and taxis within a
specified timeframe.

Table 1 categorizes existing EV policies for Eurasian countries active in supporting

electrification. The five broad policy categories, including regulation, incentives,
infrastructure, ZEV access, and fleet deployment, are those that have proven effective
in leading ZEV countries. The “Others” category summarizes actions that could be
particularly beneficial for ZEV emerging countries.

Interventions by countries listed in Table 1 consist primarily of developing charging

infrastructure; promoting EVs through incentives; establishing EV and battery
manufacturing capacity and assembly; targeting electrification of buses and 2&3Ws;
and tapping international support.

7 A.S.M. Mominal Hasan, (2020), “Electric Rickshaw Charging Stations as Distributed Energy Storages for
Integrating Intermittent Renewable Energy Sources: A Case of Bangladesh”, energies, https://www.mdpi.
com/1996-1073/13/22/6119/htm.
8 Shrestha S. “Nepal Policy Environment Paper”, (Urban Electric Mobility Initiative, Berlin, 2018), http://www.
uemi.net/uploads/4/8/9/5/48950199/uemi_ca_nepal1.pdf.

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Table 1. Existing EV policies for selected Eurasian countries

Industrial
Regulations Incentives Infrastructure Demand development Others

capacity building
Shared mobility

Business model
ZEV regulation

Manufacturing
CO2 standard

International
Special fleet

Assembly
Strategy/
Subsidy/

R&D and
Support

support
In-use
Phase-out

tax
Country target
Ukraine n n n n n n n
Belarus n n n n n n
Jordan n n n n
Egypt n n n n n n
Kazakhstan n n n n n n
Uzbekistan n n n n n
Nepal n n n n n n n n n
Sri Lanka n n n n n n n

n indicates that a given country has at least some policy actions for the given policy category

OPPORTUNITIES AND SUCCESS STORIES

a) Manufacturing: Some countries manufacture EVs, especially electric 2&3Ws and
buses, in collaboration with international automobile companies. Hence, they have
the potential to promote leapfrogging to ZEVs, and to become ZEV exporters.
Countries with EV manufacturing capacity include Belarus (motorcycles, buses,
the world’s biggest electric dump truck), Pakistan (solar powered 2&3Ws, PVs,
and vans), Nepal (2&3Ws and PVs), Kazakhstan (buses and minibuses), and
Sri Lanka (3W taxis). Some countries are building manufacturing plants such
as Uzbekistan (EVs), Serbia (electric motors and EV battery components),
Pakistan (PVs, 2Ws), and Bangladesh (2&3Ws and PVs). Egypt offers incentives
for EV manufacturing including tax exemptions for imported components and
manufacturing equipment. Pakistan offers various supply-based incentives
that encourage growth of the EV manufacturing industry, including waived
income and sales taxes on imported EV-related machinery and equipment;
substantially reduced taxes on imported EV components; greenfield investments
for converting domestic facilities to EV manufacturing sites, in addition to
foreign direct investment (FDI) by international EV manufacturers to create their
subsidiaries; and lower financing rates for EV manufacturers.
b) Import, distribution & assembly: Some countries have EV dealerships that
import and distribute various types of EVs; examples include Sri Lanka and
Bangladesh for electric 2&3Ws, and Nepal for electric 2Ws, PVs, minibuses,
and large buses. Some countries have established EV assembly capacity in
partnership with international automobile companies, as in Kazakhstan (buses);
Sri Lanka (3Ws); Pakistan (EVs); and Nepal (3Ws and minibuses). Furthermore,
Sri Lanka has a United Nations Development Program (UNDP)-supported
project for producing EV components and enhancing local assembly capacity for
electric 3Ws; Bangladesh is establishing an EV assembly plant. Some countries
are incentivizing the EV assembly industry. Egypt offers variable reductions in
customs duties on imported EV components, depending on the requirement
of local content in the final product, and imposes higher customs duties for
imported EVs carrying 10 passengers or more. Pakistan provides substantially
reduced rates of sales tax on EV complete knock-down kits compared to ICE
vehicles and for locally made smaller electric cars and light commercial vehicles,

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 while imports of completely built EVs are taxed at a high rate to promote
assembly and discourage EV imports. In Nepal, the Government provides free
land for assembly plants.
c) Purchase and usage incentives: Some countries, including Belarus, Moldova,
Ukraine, Uzbekistan, Pakistan, Sri Lanka, Bhutan, Maldives, and Nepal, offer
consumer-based purchase incentives that make EVs cost-competitive with ICE
vehicles. These countries either waive or reduce duties, taxes and fees on EVs,
including customs duties, excise duties, import duties/surcharges, registration
taxes, road/circulation taxes, goods and services taxes, carbon taxes, sales
taxes, and green taxes and VAT. Additionally, Belarus provides a VAT rebate for
consumers who purchase EVs inside the country; Bhutan offers an internationally
supported subsidy grant and loan facility for drivers, covering 90% of the
purchase price of electric taxis; and Maldives provides lower interest rates on
loans for purchasing battery electric vehicles.
d) EV usage incentives include monetary incentives such as waived parking fees
in public parking lots and a waived public roads usage tax in Belarus, a 50%
exemption on motorway tolls in Pakistan; and non-monetary incentives such as
special lane provision (shared with bicycles) for electric scooters in Turkey, and
designated EV parking spaces with constant access to charging facilities and
priority parking facilities in Ukraine.
e) Charging infrastructure: Targets, regulations, and incentives to develop a wide
network of charging stations have been undertaken by some countries in the
region. Pakistan has national targets for installing fast charging stations per
3x3 km quadrant (or every 10 sq. km) in all major cities, and every 15-30 km on
all motorways, to ensure an uninterrupted power supply. Nepal has received
international loans for the importation, installation, operation, and maintenance of
EV charging stations in 50 different locations. Turkey put into force a regulation
to provide a legal basis for installing charging stations at parking lots, fuel
stations, or other places suitable for charging EVs. Egypt offers incentives for the
importation of equipment required to establish/operate charging stations.
f) Shared mobility: Some countries have targeted electrification for shared mobility
modes, including buses and taxis, which are popular transportation options in
many Eurasian countries and thus, have the potential for effective fleet transition
to ZEVs. Buses and trolleybuses manufactured in Belarus are operating in
seven cities and in some other countries as well. In Ukraine, a private company
is operating electric car sharing and taxis; a ride-hailing company is operating
hundreds of EVs in the capital city; a fleet of 250 electric buses was ordered
under a public-private-partnership (PPP) project; and an electric bus prototype
was developed by retrofitting a diesel bus. Iran is retrofitting conventional ICE
buses to electric buses in the capital city. Egypt is conducting various electric
bus pilot projects with support from international loans, in partnership with
international organizations and EV manufacturers, and is operating electric buses
after successful completion of the pilot projects. Kazakhstan is launching electric
taxis; has purchased 100 electric buses from a joint venture of international
and local manufacturers; and is conducting field trials for electric buses. Nepal
has a private company operating electric buses; the government is introducing
a fleet of electric buses in the capital city; many electric 3Ws are in use; and
an internationally financed project for electric buses and taxis is under way.
Bangladesh has more than a million electric 3Ws that are used as public
transportation. Pakistan is introducing electric buses under PPP projects and in
collaboration with international companies. Moldova, Jordan, Kyrgyz Republic,
and Nepal have received international financing support for the purchase and
deployment of electric buses.

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TOP BARRIERS AND CHALLENGES
a) Higher EV prices compared to low-cost ICE vehicles, which will continue to be
a barrier in mass uptake unless sufficient and consistent consumer or demand-
based incentives are introduced and implemented.
b) Lack of ZEV-related regulations, which leave fuel economy and greenhouse
gases and other pollutants unregulated, and which fail to mandate ZEV sale/
purchase requirements, resulting in limited investment in ZEV technologies by the
industry.
c) Inadequate charging infrastructure, which limits the functionality of ZEVs.
d) Lack of e-mobility-based businesses in many countries, which limits options for
mass uptake of EVs.
e) Lack of public awareness of ZEV benefits and operation/usage in the region.

POLICY IDEAS FOR COUNTRY COLLABORATION

a) Develop ZEV roadmaps, regulations, and ZEV-exclusive supply-based incentives
to send clear policy signals. A long-term roadmap, ZEV regulations such as CO2
emissions or fuel economy standards, and ZEV production and import incentives
and mandates will send out a strong development signal and encourage
investment in the ZEV transition.
b) Reduce ZEV costs through trade agreements and international financing.
Form trade agreements with countries to lower or waive import duties on
ZEVs. Introduce budget-neutral mechanisms such as charging high-emitters or
introducing international financing to reduce ZEV upfront costs through rebates,
reduced loan interest, and other types of collaboration.
c) Integrate infrastructure development with renewable energy and innovative
charging solutions. Provide countrywide charging infrastructure, supported by
standards and regulations, and powered by a reliable, low-carbon energy supply,
and introduce innovative charging solutions such as solar carports, to ensure a
full ZEV transition.
d) Improve ZEV access by incentivizing the automobile industry and establishing
standards and regulations. Incentivize domestic ZEV manufacturing and
assembly industries, incentivize the importation and distribution of EVs and
promote localization of ZEV value chain; collaborate with international ZEV
manufacturers; set technical standards and certification procedures for imported
and locally manufactured/assembled ZEVs; provide mandates for ZEV purchases
and gradual replacement of fleets such as buses, taxis, and 2&3Ws, as applicable.
e) Enable innovative e-mobility business and financing models in shared mobility.
Encourage introduction of ZEV-based businesses and cooperative finance
models with a particular focus on electric buses, taxis, and 2&3Ws for ride hailing,
delivery services, leasing, battery renting, and/or swapping.
f) Demonstrate ZEV technology through exhibitions, experience centers, and
pilot projects to raise public awareness. Collaborate with the private sector
and international entities on promotion events and demonstrations of ZEVs
and charging methods to increase public awareness and familiarity with ZEV
technology.

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INTERNATIONAL SUPPORT FOR ZEV TRANSITION
Eurasian countries are receiving loans, non-profit funds, and technical support for the
ZEV transition from international agencies and philanthropic institutions including the
Asian Development Bank (ADB), European Bank for Reconstruction and Development
(EBRD), International Bank for Reconstruction and Development (IBRD), Green Climate
Fund under the United Nations Framework Convention on Climate Change (UNFCCC),
Nordic Environment Finance Corporation (NEFCO), Global Environment Facility (GEF),
United Nations (UN), European Commission, and European Union. These organizations
supported at least seven countries with approximately $11 million in non-profit funding
for the ZEV transition and six countries with $68 million in loans for ZEV uptake and
infrastructure over five years (2017-2021).9 Their areas of intervention included shared
mobility, charging infrastructure, R&D, multiple policy interventions, and demonstration
projects for ZEVs within specific fleet segments and infrastructure. The non-profit
funding, on a per-country basis, ranges from $56,000 to $3.6 million.

Current international support is far from the levels needed to facilitate ZEV
leapfrogging in the region. A five-year goal to bring cumulative ZEV sales to 10% of
2020 sales of passenger vehicles, buses, and 2&3Ws in the next five years, assuming
funding at a rate of $30 per kWh10 of battery capacity, would require a funding level of
$547 million for all vehicle segments. This is a rough estimate, but it reflects the gap
between existing and needed international support. The funding could be used for
various purposes including, but not exclusive to, technical support, policy interventions,
infrastructure, financial incentives, R&D, and ZEV exclusive loan service to support ZEV
leapfrogging in the Eurasian countries.

9 Statistics based on available public information. It is expected that some activities are not captured by this
analysis.
10 Literature shows that the battery pack cost will be $130–$160/kWh by 2020-2022 and will decline to
$62/kWh in 2030. The assumed $30/kWh funding level is a rough estimate that mimics the effort to reduce
EV cost as EVs reach cost parity with conventional vehicles. Nic Lutsey and Mike Nicholas, Update on electric
vehicle costs in the United States through 2030, Working Paper 2019-06, (ICCT: Washington, DC, 2019),
https://theicct.org/sites/default/files/publications/EV_cost_2020_2030_20190401.pdf.

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