Karachi: Localization of the electric vehicle (EV) model will begin in Pakistan in the coming months and aims to reduce the price by around Rs 400,000-500,000 per unit in the local market.
This is a historic initiative to lower the price of EV rickshaws through localization. Currently, the cost of a Completely Knocked-Down (CKD) kit for an EV rickshaw is around $1 million per unit.
According to the Express Tribune, increased localization of components will reduce costs and reduce import costs. Importing CKD kits from China is a challenge as one container can only hold 20-25 CKD kits, resulting in high transportation costs. This created a fully imported rickshaw worth $1 million for local drivers.
Manufacturing sources revealed that four to five companies in Lahore specializing in EVs will soon enter the market.
Chinese brand representatives visit Pakistan to negotiate deals with local car manufacturers. EVs are expected to be on the roads of Pakistan by the end of this year.
Market experts stress the need to localize as many parts as possible in the auto industry to support the struggling industry and ensure better quality and prices for consumers.
The Pakistan Automobile Manufacturers Association (PAMA) reported a decline in car sales despite a significant increase in agricultural tractors.
Automotive industry expert and analyst Mohammad Sabir Shaikh said that the EV industry is the future of Pakistan. He has seen interest in gas-powered vehicles, with more customers switching to EVs, reflecting a trend in modern countries.
Meanwhile, the engine, motor and battery of the EV rickshaw can be imported first until all the technology is transferred. In addition, this EV rickshaw will be equipped solar panels on the roof to charge during the day.”
However, when these rickshaws are marketed and sold, thousands of units will be demanded as they are technically not free. As a result, drivers can cover the cost of EVs.”
Dr Aadil Nakhoda, automation analyst and associate professor at IBA, said it is important to understand the meaning of ‘localisation’.
High tariffs and protection do not help because of inefficiency costs to consumers. Second, localization without technology transfer agreements can lead to the abandonment of inferior and more efficient technologies because they become lost in other countries .Quality checks, certification and research requirements, not tariffs and import restrictions. The goal of all policies should be to have access to the highest quality products at the lowest prices. Finally, localization should be investigated throughout the supply chain, as some local suppliers can depends on import revenue and imports at a higher cost than what else is available,” said Nakhoda.
He added that the localization policy should focus on building a competitive industry. It is better to invest in business opportunities and increase support rather than looking for short-term profits.
