Regal Automobiles Industries Limited has revealed plans to begin manufacturing electric vehicles in Pakistan the following year, beginning with the production of a small car with a maximum mileage of 180 km on a single charge.
According to an official draft made public for listing on the Pakistan Stock Exchange, Regal is the only automaker to assemble DFSK electric vehicles in Pakistan under the plant machinery plus CKD [Completely Knocked Down] supply agreement with DFSK Motor Co. Ltd.
The company is in talks with several manufactures about CKD cooperation agreements for the supply of parts for this small electric car. The imported raw materials for the electric vehicle as a CKD unit will be sourced from DFSK.
Regal will establish the electric vehicle assembly line as part of a strategic partnership with DFSK Motor Co. Ltd., under which the company has entered into an Agreement with DFSK Motor Co. Ltd.’s exclusive supplier, ChongQing Sokon Motor (Group) Imp. & Exp. Co. Ltd., for the import of the plant and machinery for the electric vehicle assembly.
Within the current freehold land, a 3-acre plot of industrial land has been set aside for the project. The plant’s importation will begin in December 2021, and the project’s building construction will begin in December 2021.
The project is expected to be completed by February 2023, after which commercial production will begin.
The government has set a goal of producing 100,000 cars in the next five years, while two and three-wheeler vehicles will increase to 500,000 in the same time frame.
Globally, the automobile industry is transitioning from hydrocarbon-based vehicles to environmentally friendly vehicles (hybrid and electric), with the primary goal of reducing carbon emissions in order to protect the environment.
Promoting environmentally-friendly vehicles, on the other hand, is expected to play a key role in reducing oil imports (oil is Pakistan’s largest import commodity), increasing foreign direct investment in the automobile sector, new employment opportunities, increased environmental awareness, the potential to lift the automobile sector by a factor of ten, and improving the country’s overall socio-economic situation.
Regal, which is launching an electric vehicle project, will receive the following benefits from 2021 to 2026.
- All CBU imports of Electric Vehicles will be subject to a 10% customs duty
- Imports of CKD for electric vehicle assembly will be subject to a 1% customs duty.
- The import of plant and machinery for the assembly of four-wheeled electric vehicles will be subject to a 0% customs duty.
- A 1% customs duty will be levied on electric vehicle charging equipment
- The retail price of an electric vehicle will be exempt from FED and will only be subject to a 1% sales tax.
- The import of Completely Built Units of Electric Vehicles is permitted at a 0% sales tax rate.
- The State Bank of Pakistan (SBP) has opened a special window for EV car financing at a rate of 1% SBP plus a 4% spread.
Because of favorable policies in China, the United States, and Europe, global sales of electric vehicles increased by 65 percent from 1.27 million units in 2017 to 2.1 million units in 2018. In 2019, the number of units sold increased to 2.3 million units, representing a 9 percent year-on-year increase. When the three economies are compared, Europe has seen the most rapid growth in electric vehicle sales, while China has the largest share of global electric vehicle sales. In China, electric vehicle sales totaled around 1.2 million units in 2019. Around 320,000 electric vehicles are sold in the United States.