Comment by Riaz Haq yesterday

Pakistan is shifting from traditional lead-acid battery manufacturing toward , driven by a massive surge in solar energy adoption and electric vehicle (EV) demand. [1]

Current State and New Production Facilities

• First Lithium-Ion Plant: Karachi-based engineering firm EV Technologies is launching Pakistan's first local Li-ion battery manufacturing plant in the Korangi Industrial Area. [1, 2]

• Initial Output: The facility features an initial production capacity of 4 megawatts (MW), designed to supply roughly 2,000 e-bike and e-scooter batteries per month. [1]

• Traditional & Dry Battery Sector: Established players like Exide Pakistan Limited, Atlas Battery, and Treet Corporation (maker of Daewoo batteries) dominate conventional lead-acid and backup markets, while Treet and others are expanding into Li-ion integration. [1, 2, 3, 4]

Policy Framework and Localization Goals

• Battery Manufacturing Policy (2026–31): The government advanced a comprehensive roadmap via the Engineering Development Board (EDB) to incentivize local production over importing completely built-up (CBU) battery packs. [1, 2]

• Tax and Tariff Incentives: The framework proposes reduced sales taxes for local producers, accelerated depreciation for capital investments, and protective duties on finished imported batteries. Raw materials for Li-ion assembly currently face zero import tax, compared to a 12% tax on fully assembled units. [1, 2]

• Value Addition Targets: The policy aims for an ambitious localization path targeting 70% domestic value addition initially, scaling up to 80% over time, focusing heavily on safer and cost-effective Lithium Iron Phosphate (LFP) chemistry. [1, 2, 3]

International Partnerships

• Chinese Investment: Pakistan is actively partnering with Chinese companies to bridge technological gaps in cell manufacturing and energy storage systems (BESS). [1]

• Key Agreements: China's Dongjin Group announced a $15 million dry battery plant investment in Faisalabad, and the Saigol Group signed a strategic memorandum of understanding (MoU) with China's Hebei Juhang Energy Technology Group for advanced Li-ion and EV infrastructure collaboration. Discussions have also involved top global EV battery makers like CATL. [1, 2, 3]

Comment by Riaz Haq 18 hours ago

Pakistan's auto policy likely to reignite WTO dispute with Japan
Strict targets on exports remain, with Chinese makers set to benefit, say experts


https://asia.nikkei.com/business/automobiles/pakistan-s-auto-policy...




ISLAMABAD -- Pakistan's updated auto policy is likely to provoke Japanese automakers because it retains rules that Tokyo has already raised at the World Trade Organization and links vehicle manufacturers' export performance to licensing and concessions on imported vehicle parts.

Prime Minister Shehbaz Sharif approved the Automotive Industry Development Policy (AIDP) 2026-31 on Sept. 9. The policy will take effect once cabinet approves it.

While details haven't been officially announced, multiple government officials told Nikkei Asia in background briefings that the new policy sets "a 12% export target" for auto manufacturers, meaning an automaker must export 12% of the total value of vehicles manufactured in the country in 2031 after gradually increasing the figure from the current 10% level. Failing to achieve the export target will result in customs penalties and possible license cancellation.

The policy also targets $4.6 billion in combined vehicle and auto-parts exports and incentivizes domestic assembly of new-energy vehicles.

The previous AIDP, which expired on June 30, had a 10% export target in the final year and linked automakers' export performance to licensing and import concessions.

Pakistan's new auto policy will likely lead to a trade dispute with Japan, as Suzuki Motor, Toyota Motor and Honda Motor dominate Pakistan's auto market, accounting for 75% of the country's annual passenger vehicle sales.

Indus Motor (IMC), Toyota's local assembler in Pakistan, faces a $265 million potential liability in the form of additional customs duty for allegedly failing to meet export targets over the last four years. The company challenged the policy in a local court, which has frozen collection of the penalty.

At a 2024 WTO meeting, Japan raised concerns that Pakistan's auto export targets should not be a condition for either tariff reductions or import licenses, as they violate international trade rules.

"Japan understands that Pakistan's [AIDP] is scheduled to be revised in July 2026. Japan hopes that the revision will be consistent with the WTO Agreement, including the issue of the manufacturing license," Japan stated during a WTO meeting in April this year. Pakistan, meanwhile, has rejected Japan's allegations at the WTO, claiming its export conditions are WTO-compliant.

Sheryar Qadir, senior vice chairman of the Pakistan Association of Automotive Parts & Accessories Manufacturers (PAAPAM), said that Japan had formally warned Pakistan that it could pursue WTO action over mandated vehicle exports imposed on manufacturers.

The AIDP for 2026-31 "is following almost the same template" of other countries' policies "that [have] already been successfully challenged" at the WTO, said Qadir. "Given that history, the legal risks persist" for Pakistan, he said.

Industry insiders said that the new auto policy favors Chinese auto manufacturers.

"Investment incentives tilt toward Chinese [new energy vehicle] entrants, who face a lighter compliance bar and heavier fiscal sweeteners. At the same time, Japanese incumbents face compounding pressure in the form of export mandates and [tighter compliance]," Qadir said.

Aamir Allahwala, CEO of Tecno Auto Glass, a glass manufacturer for carmakers, told Nikkei Asia that Japanese vehicles produced in Pakistan use up to 65% local parts by value and buy $720 million worth of locally produced parts.

"Korean cars have 20-25% local parts, and Chinese cars have near 0% local parts," he said.

A government official privy to the trade developments told Nikkei Asia that the new auto policy "in no way discriminates against auto manufacturers of any country. It merely promotes exports in the auto sector, which have failed to grow over the years."

Comment by Riaz Haq 18 hours ago

Pakistan's auto policy likely to reignite WTO dispute with Japan
Strict targets on exports remain, with Chinese makers set to benefit, say experts


https://asia.nikkei.com/business/automobiles/pakistan-s-auto-policy...


Aamir Allahwala, CEO of Tecno Auto Glass, a glass manufacturer for carmakers, told Nikkei Asia that Japanese vehicles produced in Pakistan use up to 65% local parts by value and buy $720 million worth of locally produced parts.

"Korean cars have 20-25% local parts, and Chinese cars have near 0% local parts," he said.

A government official privy to the trade developments told Nikkei Asia that the new auto policy "in no way discriminates against auto manufacturers of any country. It merely promotes exports in the auto sector, which have failed to grow over the years."

Industry insiders and auto-sector experts consider the export targets under AIDP 2026-31 to be ambitious.

Noman Ahmed Said, a technology industry expert based in Karachi, said that setting ambitious targets alone will not increase exports.

"Manufacturing costs in Pakistan are high, financing is expensive, and our domestic volumes are still relatively small. If we want exports, we first have to make our industry competitive," Said said.

Pakistan's Minister for Commerce and separately a spokesperson for the Engineering Development Board, the auto industry's regulator, did not respond to a request for comment.

"[Pakistan] certainly needs to encourage exports, but the better way is to make Pakistani manufacturing competitive enough that companies want to export from here rather than forcing exports through import restrictions," said Allahwala, the glass manufacturer.

Comment by Riaz Haq 5 hours ago

Established players in a market, aka incumbents, are always so slow to change, hoping to defend their turf and market share. This creates an opportunity for new player (insurgents) to gain ground,

This dynamic has already allowed China to surpass as the world’s biggest auto exporter. China exported 7.09 million exported units in 2025 and surpassing Japan

Chinese carmakers, led by BYD and Chery, are reshaping the global auto export market. Vehicle shipments hit record levels in 2024–2025, with EVs accounting for 40% of exports.

Data compiled by McKinsey shows that back in 2019, Japan was the biggest global vehicle exporter, with 4.8m units exported. At this point China exported only around 700,000 vehicles. Fast forward to 2024 and China had become by some distance the world’s largest exporter, with 5.5m units. Forecasts released in July 2025 suggested that Chinese exports could exceed 7m units this year. Japan’s exports by contrast had fallen to 4.2m in 2024.

https://www.automotivemanufacturingsolutions.com/strategy/china-ove...

Comment