Regal Automobiles Industries Limited has announced plans to begin Compact Electric Car (EVs) in Pakistan next year, starting with a small EV that offers a range of up to 180 km on a single charge.
As the exclusive assembler of DFSK electric vehicles in Pakistan, Regal will operate under a Completely Knocked Down (CKD) supply agreement with DFSK Motor Co. Ltd., according to a company draft made public for listing at the Pakistan Stock Exchange.
The company is in talks with multiple vendors to establish CKD partnerships for sourcing parts for the new Compact Electric Car. Regal will import the raw materials for assembly as a CKD unit from DFSK.
A key part of Regal’s strategy involves a partnership with DFSK Motor Co. Ltd. and an agreement with ChongQing Sokon Motor (Group) Imp. & Exp. Co. Ltd., an exclusive supplier for DFSK, to import the necessary plant machinery for the electric vehicle assembly line. In December 2021, A 3-acre industrial plot has been allocated for this project, with plant imports and construction set to begin. The project is expected to be completed by February 2023, with commercial production starting shortly thereafter.
The government has set ambitious targets for the automotive sector, aiming to produce 100,000 cars within five years, alongside a goal of producing 500,000 two- and three-wheelers in the same period.
The global automotive industry is transitioning from fossil fuel-powered vehicles to more sustainable alternatives like electric and hybrid cars. This shift is driven by efforts to reduce carbon emissions and protect the environment. In Pakistan, promoting EVs is seen as a way to reduce oil imports and boost foreign direct investment in the auto sector. Which will create new jobs, and improve the country’s overall socio-economic situation.
Regal’s EV initiative will benefit from a range of government incentives from 2021 to 2026, including:
– A 10% custom duty on CBU imports for EVs.
– A 1% custom duty on CKD imports for EV assembly.
– No custom duty on plant and machinery imports for electric vehicle assembly.
– A 1% custom duty on EV charging equipment.
– Exemption from Federal Excise Duty (FED) on EV retail prices, with only a 1% sales tax applied.
– 0% sales tax on the import of Complete Built Units (CBUs) for EVs.
– Special financing terms for EV purchases, with loans available at a 1% SBP rate plus a 4% spread.
Globally, electric vehicle sales have seen substantial growth. It is rising by 65% from 1.27 million units in 2017 and 2.1 million units in 2018. It is due to favorable policies in China, the US, and Europe. In 2019, the global market saw a more modest 9% year-on-year growth, with Europe leading in sales and China maintaining the largest share of the market. In Pakistan, the government is committed to reducing emissions, as transportation accounts for 43% of the country’s airborne pollutants. The National Electric Vehicle Policy has been introduced to help mitigate climate change impacts.
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