EV rickshaws to be identified

KARACHI:

Localization of electric vehicle (EV) rickshaws is set to begin in the coming months, with the aim of bringing prices down to around Rs 400,000-500,000 per unit in the local market. This marks the first time in the country’s history that electric rickshaws will be targeted to reduce prices. However, the imported Completely Knocked-Down (CKD) kit of the EV rickshaw costs Rs 1 crore per unit in the local market.

Localizing more parts will greatly reduce the cost and import bill as importing CKD kits from China is difficult. This is because a single container is filled with only 20 or 25 CKD rickshaw kits and transportation costs are high, making fully imported rickshaws priced at Rs 1 million unaffordable for local rickshaw pullers.

Well-placed sources in the market said that four to five Lahore-based companies specializing in electric rickshaws will come up and launch their products soon. Representatives of Chinese branded companies have come to Pakistan and engaged in discussions with local auto manufacturers to finalize deals. By the end of this year, EV rickshaws may be plying the country’s roads.

Market experts have already highlighted the need to localize maximum segments of the local auto industry to protect the distressed sector and provide end-users with greater benefits in terms of quality and prices.

The Pakistan Automobile Manufacturers Association (PAMA) reported a decline in sales of all vehicles, except for a significant increase in agricultural tractors recently.

According to automotive expert and analyst Muhammad Sabir Sheikh, the EV industry represents the ultimate future of the country as fewer people are willing to invest in fuel-powered cars, motorcycles or even rickshaws. He noted that customers are gradually turning to EVs, aligning with the upward trend seen in modern countries.

“It is relatively simple to assemble the rickshaws, with many components such as the main body, frame, chassis, front and rear shock absorbers easily manufactured. Meanwhile, the motor controller, motor and battery of EV rickshaws can be imported initially until the whole technology is transferred. Additionally, these electric rickshaws will be equipped with solar panels on their roofs to facilitate charging during the day,” he said.

Sheikh added that, “Many companies specializing in three-wheelers have already imported some electric rickshaw CKD kits for successful trials. However, once these rickshaws are marketed and sold, there will be a demand for thousands of units due to their maintenance-free nature. Ultimately, drivers will be able to cover the cost of electric rickshaws.”

Auto Analyst and IBA Assistant Professor Dr Aadil Nakhoda pointed out the need to first understand what ‘detection’ means.

“We need to ensure that local players are competitive globally, not just domestically. High tariffs and protectionism do not help, as they end up passing on the cost of inefficiency to the consumer. Second, localization without technology transfer agreements can lead to the dumping of low-quality and less efficient technologies as they become obsolete in other countries. We demand quality controls, certifications and inspection requirements instead of tariffs and import restrictions. The purpose of all policies should be to protect the rights of consumers, who should have access to better quality products at the lowest possible price. Finally, localization needs to be analyzed throughout the supply chain as some local suppliers may depend on imported inputs and may import at a higher cost than otherwise available,” said Nakhoda.

He added that all localization policies, if followed, should be aimed at developing a competitive sector. It is better to invest in business capabilities and improve facilitation than to prioritize short-term profits.

Published in The Express Tribune, May 19^u2024.

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