LAHORE – BYD, a Chinese electric vehicle giant, is set to establish a car plant in Pakistan, which will start production within two years.

The development comes as Beijing had Islamabad of assured of Chinese investment after Prime Minister Shehbaz Sharif visited China in June this year.

In this connection, China – in a joint communique after the visit – reiterated its commitment to Pakistan’s industrialization. Therefore, it promised to encourage Chinese companies to invest in the country’s Special Economic Zones (SEZs) in accordance with the market and commercial principles.

The assurance came in the broader context of reviving CPEC – China Pakistan Economic Corridor, a flagship project under the “Belt and Road Initiative (BRI).

THE PARTNERSHIP

The first such venture in Pakistan will be executed in partnership with Mega Motors, a subsidiary of the country’s largest private utility Hub Power Co Ltd, commonly known as Hubco.

At a launching ceremony held in Lahore, Liu Xueling BYD, “Our entry into the Pakistani market is not just about bringing advanced vehicles to consumer.

“It’s about driving a broader vision of environmental responsibility and technological innovation.”

BYD also plans to open three “flagship stores and experience centers” in Karachi, Lahore and Islamabad, the company, adding it plans to start selling two SUV models and a sedan from the fourth quarter of 2024.

“We will establish Pakistan’s first NEV (new electric vehicle) assembly plant… dedicated to producing BYD’s cutting-edge new energy vehicles,” said Hubco Chief Executive Kamran Kamal, who described the deal as a “landmark investment”.

Hubco will setup fast-charging stations across major cities, motorways and highways to enhance Pakistan’s charging infrastructure, which it currently lacks.

THE PRICE WAR

The Chinese giant is now the world largest electric vehicle (EV) manufacturer in terms of units produced.

BYD produced around more than three million units in 2023 against 1.84 million by Tesla. It is for the second consecutive year that the Chinese company beat the US firm.

The two companies as well as their other competitors are currently engaged in a price war. The reason behind this trend is a cutthroat competition to attract maximum number of customers who have been hit hard by inflation and shrinking purchasing power.

However, the race is complicated by the fact that multiple EV manufacturers, mostly from China, are now in the race.

THE CPEC

As a result of the prime minister’s visit, China and Pakistan had agreed to boost mining cooperation and promote the implementation of a pact on strengthening mining development and industrial cooperation.

The statement read that Pakistan identified 13 priority sectors for top Chinese companies to invest in to ensure the country’s export-oriented growth.

It also agreed to optimize its business environment and policy framework to further facilitate Chinese investment.