Experts hail Chinese EV giant BYD’s entry to Pakistan market

Chinese electric vehicle (EV) giant BYD revealed its plan to enter the Pakistan market and industry experts see it as a positive sign for the country.       

BYD (Build Your Dreams) made the highest number of electric vehicles in 2023 in the world, elbowing out Tesla from the top spot.

Its decision to enter Pakistan’s passenger vehicle market is part of a collaboration with local partner Mega Conglomerate Pvt. Ltd. (Mega).

The announcement was made during the BYD Asia Pacific Dealer Conference event in Xi’an, China, with key figures such as Liu Xueliang, General Manager of BYD Asia Pacific Auto Sales Division; Zhang Jie, Vice General Manager of BYD Asia Pacific Auto Sales Division; and Aly Khan, Executive Director of Mega, present at the signing ceremony.

The move comes at a time when Pakistan is seeking to reduce its carbon footprint and embrace cleaner, more energy-efficient modes of transportation.

BYD officially enters Pakistan’s passenger vehicle market

Auto sector expert Mashood Khan welcomed the news of BYD coming to Pakistan, stating that it signified a positive development especially at a time when businesses were leaving the country due to tough economic conditions.

 “It’s a big company, and it must have seen something promising before planning to enter the Pakistani market,” Khan told Business Recorder.

Khan, who also runs an automotive parts manufacturing company, highlighted that Chinese companies like BYD could play a crucial role in helping countries like Pakistan transition from fossil fuel cars to electric vehicles, particularly due to their ability to produce affordable EVs.

“Otherwise, the price point of EVs is very high, and very few can afford Tesla, Mercedes, Audi, or BMW EVs in Pakistan. Companies like BYD give hope to underdeveloped countries like us to upgrade to EVs,” he added.

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He noted that the share of EVs in the mobility sector increased from just over 2% five years ago to 14%, and the trajectory indicated a continued growth in the EV market.

Khan also expressed hope that BYD might start localising its EV production in Pakistan, making the country an export partner for its right-hand drive (RHD) vehicles.

He emphasised that the entry of big brands like BYD into Pakistan would enhance the country’s export potential in the mobility sector.

However, he also stressed that Pakistan should aim to partner with foreign companies to localise production and eventually increase exports.

“Becoming just a trading base will not help Pakistan. We need to move from an import-based industry to an import substitution as well as an export-based industry.”

Dr Aazir Anwar Khan, Founder and Director, Integrated Engineering Centre of Excellence (IECE) at the University of Lahore, also cautiously welcomed the news of BYD entering the Pakistani market.

He emphasised the importance of EV companies offering affordable price points to encourage widespread adoption.

“Otherwise, there are few rich people who can afford cars over Rs10 million,” he stated, highlighting the need for EV companies to pass on low custom duties to buyers.

Dr Aazir suggested that EVs should be priced between Rs2.5 million and Rs6 million, a range that aligns with a bigger majority of car buyers’ budgets.

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He explained that importing EVs in completely built-up units (CBU) form incurred around 35% duties and taxes, while in completely knocked down (CKD) form, the costs amounted to just 5%.

This presents an opportunity to offer inexpensive EVs to the Pakistani market by companies that have assembly plants.

Dr Aazir stressed that making EVs more accessible was crucial for achieving desired outcomes such as reducing fuel consumption, lowering fuel import bills, and cutting carbon emissions.

He also noted that BYD’s exclusive focus on EVs sets it apart, contrasting it with Toyota’s recent introduction of a petrol variant for the Hybrid Corolla Cross, which was initially offered as a low fuel consuming Hybrid car.

Aly Khan, Executive Director, Mega, said earlier in a statement to the media that they would move aggressively for EV adoption in the country.

He also mentioned that the first three BYD flagship showrooms would take place in Karachi, Lahore, and Islamabad in 2024.  

“As one of Pakistan’s largest conglomerates, we are thrilled to embark on this transformative journey with BYD. By combining our strengths and resources, we aim to catalyse the widespread adoption of EVs in Pakistan, driving positive change and ushering in a new era of sustainable mobility,” he said.

Aly Khan added that they aimed to provide customers with the opportunity to experience BYD’s world leading new energy vehicle technology with a retail experience where customers would be able to place orders directly.

Mega Conglomerate is the parent company of Hub Power Company Limited (HUBC), which is listed on the Pakistan Stock Exchange (PSX) and operates several power plants in the country.

 An auto sector analyst told Business Recorder that the country’s leading independent power producer (IPP) has previously shared that it was in discussion with BYD to ‘disrupt’ the automobile sector in Pakistan.

The company may also look into developing charging infrastructure as a natural forward integration of its power plants.

Auto sector in 2023: advent of EVs and hybrids in Pakistan

Pakistan, like many other developing countries, faces challenges related to air pollution and rising greenhouse gas emissions. The introduction of BYD’s EVs is expected to help address these issues by offering a cleaner alternative to traditional gasoline and diesel vehicles.

In addition to its environmentally friendly benefits, BYD’s EVs are also known for their advanced technology, performance, and safety features. The company’s electric buses, for example, have been widely adopted around the world for their reliability and efficiency, making them an attractive option for Pakistan’s public transportation sector.