The auto sector in Pakistan is in deep turmoil at the moment. Many car companies have suspended bookings and been struggling to deliver cars on time.
This is mainly due to the government's restrictions on import of auto parts through the central bank. However, it is a short-term measure. Chances are that as soon as the country comes out of this crisis, the situation would normalise.
Meanwhile, while taking a long-term view on Pakistan's auto sector, it is at a crossroads. There is a fair bit of confusion about whether it should adopt hybrid or electric vehicles — or rather which technology will be promoted amidst arising fuel import bills as well as fuel prices while also responding to a call to curtail carbon emissions.
Ask Toyota Pakistan and they will tell you that hybrids are the best option for Pakistan at the moment. Ask MG Motors’ Javed Afridi and he will say electric vehicles should be the ones the country should promote.
Almost a year ago, Indus Motor Company (IMC), the maker of Toyota vehicles in Pakistan, announced investing $100 million in the local production of hybrids. Resources were allocated towards expansion at the plant located at Port Qasim, Karachi.
Meanwhile, MG Motors, which has yet to receive plant manufacturing certificates for local manufacturing, has launched an MGZS-EV through imported CBUs.
According to a study Toyota conducted, hybrids provide a mid-term solution to Pakistan. This is because Pakistan lacks the infrastructure needed for electric vehicles. More importantly, the country mostly generates its power through fossil fuels.
IMC CEO Ali Asghar Jamali says in Pakistan’s existing power generation mix, hybrids will fare better for lower carbon emission and reduction in oil import bill.
Pakistan imports roughly $10 billion worth of crude oil for refineries to produce petrol and diesel and the largest category of import is petroleum commodities.
Jamali projects the import bill could come down 50% if the country fully moves towards hybrid electric vehicles.
The Toyota study says that Pakistan produces 62% of its electricity from fossil fuels with up to 30% line losses, a dampener for EVs. It claims that EVs will increase local LNG, coal and crude oil imports while investment for improving distribution and creating a charging infrastructure would also be needed.
“Therefore, based on current infrastructure and forex conditions, HEV is the best solution for Pakistan,” Jamali said.
Bloomberg also predicts a higher share of HEV versus BEV to continue till 2030.
“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,” reads IMC’s statement on the topic.
However, Javed Afridi, the face of MG Motors, has been vigorously pushing EVs. He says hybrid was good technology but five years ago.
“Pakistan should be in the race for EVs, which is the future. Why should we always follow in technology? Why not start early and be in the race with countries like Vietnam, Thailand and Indonesia to manufacture rather than import?” questioned Afridi.
Afridi further said that the world was fast moving towards renewable energy and if Pakistan’s energy mix was dominated by fossil fuel then it would certainly change in a few years.
“There will be an increase in solar energy, hydro power and other alternative energy sources.”
He further said that research shows automotive pollution is more harmful to urban populations. Lahore Air Quality Index (AQI) is a prime example of automotive emission in recent times.
He says the company is committed to export-based local automotive industry for which an investment of $100 million is already committed.
Whatever one's thoughts are on EVs or HEVs, one thing is clear — Pakistan quickly needs to adopt a solution more eco-friendly than what we have right now. Fuel consumption is only going to increase, and sustainability is the need of the hour.
The article does not necessarily reflect the opinion of Business Recorder or its owners