Hub Power Company to Build Plant for Producing 50,000 EVs Per Year

The Board of Directors of the Hub Power Company Limited (PSX: HUBC) informed shareholders at its annual general meeting today that plans are underway to establish a plant with a capacity to produce 50,000 electric vehicles annually, with 30 percent to 40 percent of the output designated for export to Australia and Africa. The company anticipates launching CKD cars across 8-9 variants in different segments, by Dec’25-Mar 26. It is pertinent to mention that the Hub Power Company Limited (PSX: HUBC) through its associated company, Mega Motor Company (Private) Limited, entered into a new line of business in electric vehicles, with BYD Auto Industry Company Limited, in Pakistan. Strong future cash flows are expected by the Board, with significant contributions to the company’s future dividends coming from the auto segment. The company has received two dividend payments from the CPHGC project. A total dividend of $150 million was received during FY24 of which $69 million was HUBC’s share. The total project cost of CPHGC was $1.8 billion, of which to date $600 million has been paid with five more years remaining. Amid higher interest costs, the company will first repay its debt. The Board also dismissed recent media reports about ongoing negotiations between Independent Power Producers (IPPs) and the government. The Board further noted that once a power plant reaches the end of its operational life, various options are available for the decommissioned facility, such as selling it or repurposing it for alternative uses. The company aims to enter the mining sector for mineral exploration to identify lithium in the future and will develop a battery manufacturing unit. A Reserves Report is currently being prepared to assess the potential, with the current work expected to take 12-18 months. Preparations are being made by the company to be well-equipped for the long-term demand for batteries. Plans are being made to increase the shareholding in Sindh Engro Coal Mining (SECMC) from 8 percent to 17 percent, with management control expected to be taken in due course.