AURORA: Where does HUBCO stand on the environment, social, and governance (ESG) issue?

KAMRAN KAMAL: You will not see many companies in Pakistan who will say we need to be net zero. Maybe HBL, because the Aga Khan Foundation has stated that they want to be net zero by 2029 across all their businesses. However, they would not be categorised as a Pakistani entity, but a global one. The same applies to multinational companies such as Coca-Cola, Nestle, Pepsi, and others. My argument would be to ask what the priority is. What does the country need? Do I make my economic development costlier because I have to adhere to net zero? Is it fair for the Global South to be as committed to the issues the Global North wants to tackle? When the Global North was growing, everything was fine. Now that they have left this trail of emissions behind, they want to clean up their act and want everyone to pay the cost.

A: Given that Pakistan is reportedly among the 10 most vulnerable countries to climate change in the world, what is the solution?

KK: Let me give you the example of a family, where the household faces difficulties. Should the youngest child, who is a toddler, be made to assume the same load of responsibility as the rest of the household? Do you want to help that toddler or compromise his or her growth by making everyone in the household go out and work? This brings me to the question of what the West has done to help countries like ours. How are they helping climate adaptation? What have they done about the floods in Pakistan? This is why the case of the Global South is being fought by China and India because they stand to lose out on their economic growth. We are only being sold the vulnerability part. But let me be clear. I am not saying that we should not sign up to the various climate agreements and commit ourselves to net zero. But the question is, should 2030 be the target or should it be 2050 or 2070? I will sign up for 2030 if the West takes responsibility for all my vulnerabilities today. That’s the quid pro quo. You cannot hold me to Western standards. The question is whether the climate emergency is being driven by what is desirable for Western businesses and governments. Yes, the private sector in Pakistan needs to control their emissions responsibly, but maybe not to the level the West is expecting. Regardless of whether I sign up in 2030, 2050, or 2070, if I can lower my emissions and mitigate the damage done to the climate – that should be my baseline under all circumstances. This should be part of my conversation today and going forward. Denial is not an option. However, establishing the trajectory should be part of that conversation.

A: Your view is that Pakistan needs to be aware of the impact of emissions of climate change and take appropriate measures, but they must be in consonance with our economic interests.

KK: We need to look at our economic context and priorities. We get carried away at these COP conferences and then make all these commitments for 2030. But these commitments are not based on a plan, and they are meaningless unless we take a holistic, ground-up approach. That is the challenge. The private sector needs to take ownership of the issues and work towards a solution, so that at COP29, Pakistan can say we have looked at our priorities and we can’t reach net zero by 2030, but 2050 is more likely; however, you have to support us in building resilient housing and in taking other adaptation measures, and we also need that our businesses be given access to your markets. This kind of conversation is missing across the board.

A: Shouldn’t this be a national conversation that involves the government?

KK: If we are serious about climate change, we need focus, and the Ministry for Climate Change has to be one of the top ministries. The positive thing is that everyone is talking about ESGs. Recently, the Securities & Exchange Commission of Pakistan (SECP) released guidelines that said that the listed companies must form ESG committees and include the results in their annual reports. That is progress. Before we can solve a problem, we need to have an awareness and understanding of the underlying issues. There is also a business case for private sector entities to benefit from the available funding. Recently, K Electric opened a bid for renewable energy projects in Balochistan and Sindh, in which HUBCO participated. In fact, there was widespread interest by the power companies, and we need to continue to do this, otherwise, we risk being left behind.

A: Why is HUBCO investing in new energy cars – specifically introducing BYD in Pakistan?

KK: Globally the energy sector is going to transition – this will happen whether the Global South signs up to net zero today or in 10 years. We looked at power systems and what was likely to disrupt our business. When you look at technology today, there is the chip, AI and battery technology, and every large or future-facing country is looking in that direction. We believe battery technology is going to disrupt the power systems, as it becomes cheaper and more prevalent. We looked at several spaces, including two-wheelers. They are a huge space in Pakistan, but battery prices are still expensive and the shift from a two-wheeler combustion engine to a two-wheeler battery technology is going to take time. We then looked at four-wheelers.

A: Why are you looking at new energy vehicles specifically?

KK: Because we are looking at new energy initiatives and the sustainable space we can move into. Eventually, even in Pakistan, the transport sector is going to be electrified; this is a sector that is still heavily fossil fuel-orientated. We are looking at diversification based on a sustainable infrastructure. There is also an advantage here, as all the multilateral organisations are putting their funding into renewable energy infrastructures, so it is easier to access capital as well as partners. And HUBCO is good at running large infrastructure projects.

A: Why did you opt for BYD?

KK: BYD’s tagline today is that it is a Tesla killer.

A: Meaning?

KK: They have beaten Tesla in most markets where they have competed with them in terms of value for money. BYD has had a very interesting journey. They started making batteries for Motorola phones, and along the way had the idea that their batteries might have a use as a supplementary support to a car. About 25 years ago they came up with a car, but it wasn’t too successful. Then Tesla came along announcing they were going to manufacture a fully electric car. But BYD persisted. They knew the fundamentals of manufacturing batteries and today, they are the second largest battery company in the world. They are also the number one new energy vehicle company.

A: Are these vehicles on the road in Pakistan?

KK: They will be in Q4 this year. The plan is to set up an assembly facility in early 2026. We have the land (near Karachi) and we are working on the design, and it is going to be a state-of-the-art assembly plant.

A: How expensive will the cars be relative to what is available in the market?

KK: We are still looking at the pricing. Automobiles are a very competitive space, especially given the present slow economic growth. Right now we have three models. The Atto 3 is similar in category to the Kia Sportage, Toyota Cross and Hyundai Tucson. The Seal, which is a sedan, is similar in category to the Hyundai Sonata, Toyota Corolla or Honda Civic. But it is a D-category sedan, whereas the Toyota Corolla is a C-category sedan. Both the Atto 3 and the Seal are 100% electric and come with XLI and GLI variants. The third model is the Sealion 6 which is a plug-in hybrid.

A: Does Pakistan have the charging infrastructure required to make these cars viable to the average customer?

KK: Every one of those cars comes with its charger and can be charged at home. But we are aware that the penetration and the sale of our cars are dependent on the ecosystem we can provide, and we are working on this with HUBCO Green, which is partnering with oil marketing companies and with lifestyle locations such as cinema houses, malls and parking plazas, to set up charging stations. We don’t want to create dedicated BYD parking slots, we want to encourage the overall use of electric cars. We are aware that there are penetration challenges to overcome; that customer anxieties have to be addressed and that enough information has to be made available. For a start, we are setting up 20 to 30 charging stations commercially across Pakistan.

A: How many units do you plan to sell initially?

KK: Initially, we are sticking to a conservative estimate, but we aspire to be the largest car company in the country by 2030. We are going to be selling about 100,000 cars by 2030. It’s a very ambitious statement to make, I know.

A: Isn’t this a bit of a risk that HUBCO is taking?

KK: I believe this will happen as more new energy vehicles are made available to customers. New energy vehicles have a better economic case compared to Western countries because our people are not as affluent, and once a customer crosses that saving benchmark and owns a car worth eight million rupees, what hurts most monthly is the cost of fuel. New energy vehicles increase the fuel mileage of cars. They effectively reduce the fuel bill and increase disposable incomes. The challenge is how quickly we can make new energy cars more affordable for more people so that we can capture the market share we want. There is a strong economic case for new energy cars – and people will realise this. Our responsibility is to ensure that a charging infrastructure is available and that we address all our customers’ issues, make sure they get value for money and the company is there from start to finish.

A: What is HUBCO Green?

KK: HUBCO Green is a subsidiary entity that will be developing the charging infrastructure separately. If you believe that new energy vehicles are the future, you want an independent company that is agnostic and supplies charging services to all new energy vehicles.

Kamran Kamal was in conversation with Mariam Ali Baig. For feedback: aurora@dawn.com