The EVs will increase local LNG, coal and crude oil imports while investment for improving distribution and creating a charging infrastructure would also be required, says Ali Asghar Jamali
KARACHI: Hybrid electric vehicles provide a midterm solution as Pakistan lacks the infrastructure needed for electric vehicles, especially with the country mostly generating power through fossil fuel, Indus Motor Company CEO Ali Asghar Jamali said on Monday.
“We can confidently claim that with existing power generation mix HEVs can serve all the objectives of EVs, including cap on carbon emission, reduction in oil import bill while contributing to the localisation and increase in GDP,” Jamali said at the Auto Industry Media Workshop 2022.
The event was organised by Indus Motor Company. It highlighted the comparison of hybrid and EV technology, and which would be a better solution for Pakistan at the moment. Localisation levels achieved by the local auto industry and impact of successive auto policies on the industry were also discussed.
“Pakistan imports $9.7 billion worth of crude oil for refineries to produce petrol and diesel and the largest category of import is petroleum commodities,” said Jamali, adding that the import bill could be slashed by 50 percent if the country has 100 percent hybrid electric vehicles.
On the other hand, he added, the battery-powered electric vehicles depend on electricity and Pakistan produces 62 percent of its electricity from fossil fuels with up to 30 percent line losses.
“The EVs will increase local LNG, coal and crude oil imports while investment for improving distribution and creating a charging infrastructure would also be required,” said Jamali on the basis of the market research his organisation conducted.
“Therefore, based on current infrastructure and forex conditions, HEV is the best solution for Pakistan,” he added. The CEO said that Toyota was a pioneer in modern HEV vehicle technology, which should be gauged by the fact that 16 million Toyota HEVs sold out globally. It has a series–parallel hybrid technology which “is superior and best in class”.
Bloomberg predicts a higher share of HEV versus BEV to continue till 2030, as for the above mentioned reasons, HEVs were more acceptable than BEVs globally. All major auto manufacturers were working on HEVs and the efficiency of HEVs would further increase in future as safety features get added in new generation HEVs or other vehicles.
Subject experts at the event highlighted that hybrid adds diversity to emission control measures and Pakistan ought to adjust to its market dynamics while choosing between hybrids and electric vehicles.
Energy mix is a critical factor to diversify these options. Pakistan’s energy mix is similar to Poland and not like France or Norway where renewable energy has a greater share, hence Pakistan requires diversified solutions to control emissions.
“Future holds an array of hybrid benefits. Heavy vehicles like trucks will also use a hybrid system in future,” they added. Meanwhile, the CEO said that sustaining the publicly announced incentives during policy periods was the only solution to enhance the engineering sector, especially the automotive sector.
Pakistan should also develop a 20-year national industrial policy to attract serious foreign direct investment in the field of steel, resin, light engineering etc, thus further strengthening the local value-addition in the whole value chain.
“The automotive industry in Pakistan is one of the fastest-growing industries in the country and it accounts for over 2-3 percent of Pakistan’s GDP. Pakistan is the 35th largest producer of automotive,” said Jamali.
The CEO said that IMC was increasing production capacity to meet increasing customer demands, while suppliers were also requested to cap up their capacities as the company aims to produce over 90,000 vehicles in 2022 with 100 percent efficiency and overtime.
“We are putting extra effort and time currently to produce vehicles more than our current capacity.” He also mentioned that IMC supports government initiatives and measures to sustain developmental growth in the economy.
“We are the torch bearers of ‘Make in Pakistan’ philosophy. Continuing the legacy, Toyota has already invested $100 million to produce hybrid electric vehicles in Pakistan and plans to bring electric vehicle in the long-term when the country is ready for this technology,” he said.
Introduction of hybrid technology would add a new dimension to localisation in Pakistan. It would also benefit Pakistan by forex saving and reducing the petroleum import bill by decreasing fuel consumption.
Speaking on the price hike on vehicles in Pakistan, the CEO reasoned that the whole world has witnessed unprecedented inflationary pressures in the last couple of years and Pakistan was no exception.
Pandemic disrupted the global supply chain, and the disruption increased on account of the Russia-Ukraine conflict.Rupee-dollar disparity, exponential increase in utilities, overwhelming freight charges and government taxation up to 40 percent has contributed to the adversity in Pakistan.
“Solution to our economic problems lies in Make in Pakistan. It will only help achieve macroeconomic economic goals of GDP increase, employment generation, exports boost and imports reduction,” he said. “Auto industry being the mother of all industries can play a pivotal role in it, provided, government ensures predictable and transparent policies,” he added.