The Hub Power Company Limited (Hubco) has doubled down on its plan to assemble BYD vehicles in Pakistan by late 2026, and is building the charging backbone to make those cars usable on long-distance routes. In a management briefing with investors, the company confirmed the completely knocked-down (CKD) plant is slated to come online in the fourth quarter of fiscal 2026 and disclosed it has already spent about $10 million, with debt drawdowns in place and equity provisioned internally. At the same time, Hubco is laying out an electric-vehicle charging network along highways every 100 kilometres, to be co-owned with fuel retailers, even as it wrestles with regulatory and receivables issues that continue to dog its legacy power portfolio.
The push into electric mobility marks a sharp strategic turn for Pakistan’s largest independent power producer. But it is also a hedge. As power offtake contracts face tariff true-ups, late-payment disputes and policy overhangs, the economics of auto assembly – especially if supported by pro-EV taxation and rising consumer interest – offer a new earnings stream. The company says initial reaction to BYD’s Shark model has been “very encouraging”, a signal that it intends to marry brand equity with local manufacturing and after-sales reach when the factory starts to roll.
Hubco’s auto strategy is not just about putting a logo on a bonnet; it is about assembling vehicles and removing the “range anxiety” barrier that keeps many Pakistani buyers on the fence.
Management reiterated that the BYD CKD facility is targeted for commissioning in the fourth quarter of FY26. The company has already incurred roughly $10 million of capital expenditure and has $90 million in debt drawn, with about $30 million in equity to be funded from internal cash generation. The heavier equipment outlays will follow once letters of credit open for the engineering, procurement and construction (EPC) contract. In other words, the build-out is funded and sequenced, not just aspirational.
The early market response to BYD’s Shark has been “very encouraging”, according to the company, which is critical in a market where consumers weigh brand novelty against concerns over resale and service. Positive reception gives Hubco and BYD the confidence to tool the plant for meaningful volumes rather than a token presence.
On the policy side, the company notes that sales tax on EV CKD and CBU (completely built-up) units is 1%, a generous concession that improves pricing headroom at launch. For a new entrant, keeping showroom prices tight without sacrificing margins is vital; a low indirect tax wedge helps.
Hubco is also working on electric-vehicle charging stations (EVCS) to make intercity travel viable. The plan is simple and pragmatic: partner with OMCs (oil marketing companies), co-own the charging sites through HUBC Green, and split profits 50:50. The initial capital expenditure is modest – about Rs400 million – and focused on safety and reliability rather than bells and whistles. The company is prioritising chargers at 100-kilometre intervals along highways and motorways, accepts that utilisation will be low at first, and expects it to build gradually as vehicles enter the parc. This is the right order of operations: seed the network, then scale as cars arrive.
Put together, the plan answers the classic “chicken and egg” of EV adoption. Vehicle assembly targets the supply of cars; the highway charging grid lowers the psychological and practical barriers to ownership; and a friendly tax regime keeps price tags within reach of early adopters. If it works, the BYD–Hubco partnership could catalyse a small but fast-growing EV market segment by late 2026.
Hubco’s origin story is well known in Pakistan’s capital markets: a pioneer IPP (independent power producer) that came of age as private generation was introduced to ease the country’s power shortages. Over three decades, the company built and acquired a portfolio of base-load and mid-merit plants, and later took positions across the energy value chain – from coal mining to potential midstream infrastructure – while navigating the sector’s chronic issues with circular debt and delayed payments.
In 2025, the house that electricity built is deliberately adding a second pillar: mobility and electrification. The EV move is housed within HUBC Green, with partnerships that straddle both new-energy infrastructure (chargers) and manufacturing (BYD). In management’s telling, the diversification is not a departure from energy but an extension of it: EVs are batteries on wheels; charging is a power-systems business; and both require the project-finance, regulatory and engineering skills that Hubco already has in-house. The pivot is coming even as legacy contracts face stress – tariff true-ups, late payment surcharge (LPS) disputes and policy resets – highlighting the need for new profit pools less exposed to the sector’s receivables trap.
A key to understanding Hubco’s trajectory is where its existing energy businesses sit – and the alphabet soup around them.
CPEC IPPs and the LPS waiver. Several of Hubco’s projects fall under CPEC (China–Pakistan Economic Corridor), the bilateral infrastructure programme. In that context, the management says it is not aware of progress on a government-to-government LPS (late payment surcharge) waiver, and believes any such relief will depend on future state-to-state talks. In plain English: the cost of delayed payments is still a live issue, and any waiver is a political call, not an operational one.
CPHGC tariff “true-up”. At CPHGC (China Power Hub Generation Company) – a major coal-fired project – Hubco is already recognising a contract liability because its assumed tariff differs from the tariff approved by NEPRA (National Electric Power Regulatory Authority). If NEPRA revises the tariff down, management plans to seek a stay order from the NEPRA tribunal; if the decision ultimately goes against the company, the adjustment will be booked as a credit note against trade debts. This is the classic “true-up” process of aligning provisional tariffs with final determinations, and it underscores why reliable cash conversion from generation assets is never as simple as megawatts times hours.
TEL/TN dividends and PCD. On TEL and TN – project companies within the portfolio – management expects no true-up before the PCD (Project Commercial Date) and anticipates PCD to materialise in the current quarter. It also flagged that annual dividends may exceed the year’s return on equity (ROE) thanks to accumulated cash, with TEL able to pay twice a year (May and November) and CPHGC restricted to once a year (May) based on historical practice. For dividend-seeking shareholders, the message is that cash is available even as regulatory processes grind on.
NEL fuel and O&M savings. At NEL (Narowal Energy Limited), NEPRA will review fuel and O&M (operations and maintenance) performance over five years. If there is a surplus from efficiency gains, 50% must be shared with CPPA-G (Central Power Purchasing Agency – Guarantee). This is a reminder that performance upside on regulated plants is partly socialised; you keep a share, but not all of it.
PRIME recovery. The company reports recovery at PRIME has improved, helped by gas price hikes, stable oil prices and a steady currency. In a sector where payables and receivables can balloon, even incremental improvements in counterparties’ ability to pay can meaningfully reduce financing strain.
SECMC stake and expansion. Hubco has increased its footprint in coal mining via SECMC (Sindh Engro Coal Mining Company). As disclosed at the last AGM, Hubco invested Rs5.4 billion to acquire an additional 9.5%, taking its stake to 17.5%. The transaction was pending regulatory approvals but is on hold following non-completion of a related Engro deal. Meanwhile, Phase 3 of the mine is targeting financial close by end-2025 and COD (commercial operations date) the following year, which, if achieved, could add long-run fuel security for linked coal plants.
Hub base plant: life after generation. Hubco’s original base plant is moving into a new chapter. An earlier RFP (request for proposals) to dispose of two units has been shelved because of increased competition from other GENCOs (state-owned generation companies), which depressed scrap prices and demand. The remaining two units are earmarked for coal conversion to supply KE (K-Electric), though the process will take time. Management says the plants are valued above book and that the land can only be used for industrial purposes, limiting but also protecting optionality.
Midstream ambitions at Hub. In parallel, HPHL (a Hubco affiliate) is evaluating greenfield new-energy projects and has signed an MoU with PSO (Pakistan State Oil) to study a single-point mooring (SPM) and oil terminal at Hub, Balochistan, exclusively for white oil products headed to northern regions. That signals continued interest in the logistics of energy, not just its generation.
Seen together, the project notes show an operator managing a complex transition: defending cash flows at regulated assets, reshaping legacy plants, pushing coal-supply optionality, and extending into midstream and mobility. None of those moves are risk-free, but they add degrees of freedom at a time when single-track power businesses are constrained by policy cycles and receivables.
An automaker’s prospects live or die by policy – especially in a market being coaxed from internal-combustion engines to battery electric vehicles.
Today, sales tax at 1% for EV CKD and CBU is a foundational incentive. For a new entrant, every rupee shaved off indirect taxes can be channelled into either a more competitive sticker price or a richer equipment level, both of which matter in early adoption phases. Hubco’s management explicitly called out the 1% rate; locking this treatment in for a multi-year window would give the company confidence to localise components and deepen supply chains beyond basic assembly.
The company’s EVCS plan – 100-kilometre spacing, co-ownership with OMCs, modest initial capex, expectation of low early utilisation – aligns with a policy environment that, so far, has not over-regulated charging or burdened it with licensing hurdles. The more the state recognises chargers as critical infrastructure rather than luxury add-ons, the smoother the ramp-up will be for networks and the vehicles that rely on them.
While the briefing does not delve into localisation rules, the CKD model implies an intent to increase local value addition over time. That, in turn, depends on stable import regulations, predictable foreign-exchange access for tooling and parts, and a clear parts-tariff schedule that rewards local content without crippling competitiveness. Policy certainty on these fronts would help Hubco move from screwdriver assembly to genuine manufacturing, deepening job creation and supply-chain resilience.
For EVs to scale, distribution companies must handle clustered charging loads without reliability dips, and tariff structures for high-capacity chargers must not make public charging prohibitively expensive versus home charging. Hubco’s DNA as a power player is an asset here: it understands the grid. If policy supports demand-side management, time-of-use pricing for chargers, and streamlined interconnection, the company’s EVCS economics improve in tandem with vehicle sales.
Banks and NBFCs will need clarity on EV financing risks, including battery warranties and residual values. While not a pure tax-policy matter, the state can catalyse this with credit-enhancement schemes or depreciation allowances. A healthier financing ecosystem will make early BYD buyers more comfortable – and help factories run closer to capacity from launch.
Finally, Pakistan’s broader trade posture affects component sourcing and potential future exports. If regional tariff differentials evolve – such as the shifting U.S. tariff environment that is re-shaping textiles – policymakers may find room to negotiate component access or mutual recognition that benefits EV makers too. For Hubco, the nearer-term focus is domestic, but a forward-leaning EV policy could position Pakistan as a small feeder hub in South Asia’s EV value chain over time.
