Pakistan to Set Up $2.25B Lithium-Ion Battery Plant in Rawalpindi
Pakistan is advancing its battery production capabilities with a $2.25 billion lithium-ion battery manufacturing facility planned for Rawalpindi. The project is a collaboration between Margalla Heavy Industries Limited (MHIL), a defense sector enterprise, Chinese manufacturers, and local investors.
Details of the Lithium-Ion Battery Plant Project
The manufacturing plant, located at Heavy Industries Taxila in Rawalpindi district, will initially launch with an output capacity of 200-300 megawatts (MW) annually before scaling up to more than 1,000MW. Major machinery is already installed, and infrastructure is prepared, pending final government approval for the associated policy.
MHIL, known for producing defense equipment such as battle tanks, armored vehicles, and drones, also manufactures energy storage systems and electric vehicles. This venture signifies an expansion into the rapidly growing market for battery energy storage systems (BESS), driven by anticipated demand from various sectors.
Context and Economic Significance
The move is aligned with Pakistan’s wider Automotive and Auto Parts Manufacturing Policy (2026-2031), recently endorsed by Prime Minister Shehbaz Sharif. The policy targets boosting local electric vehicle components production but awaits International Monetary Fund (IMF) approval, mainly regarding tax incentive schemes and their fiscal impact.
The Engineering Development Board (EDB) projects a significant rise in demand for battery storage capacity, potentially reaching 100,000MW by 2030 under favorable economic conditions. This requirement stems from multiple end-users including households, industries, commercial buildings, and electric vehicles ranging from two-wheelers to heavy trucks.
Why This Matters for Pakistan
The lithium battery plant initiative could play a pivotal role in Pakistan’s industrial and energy landscape, facilitating the country’s transition toward cleaner technologies and local manufacturing. Successfully implementing this project has the potential to reduce reliance on imports, develop the local supply chain, and create employment opportunities.
Hamad Ali Mansoor, CEO of EDB, noted the project’s scale and strategic importance, highlighting that meeting future energy storage demand will require multiple gigafactories nationwide, with investments comparable in size to this Rawalpindi facility.
- Four major factories are planned across Pakistan: Rawalpindi, Lahore, Faisalabad, and Karachi.
- Local production is expected to fully cover battery parts such as motors, controllers, and chargers by next year.
- International safety and performance standards will be integrated into the manufacturing policies.
This manufacturing push aligns with Pakistan’s broader aim to improve its industrial base and support renewable and electric vehicle sectors, a critical step amid global shifts toward sustainable energy solutions.
