Who Will Build EV Batteries in Pakistan?

A Draft Article by Mohammad Minhaj Khokhar, Silicon Valley, USA. October 4, 2021

Without government support, as a Key Strategic Industry, it will not be a Pakistani company or
even a company established by the Diaspora Pakistani Community to launch a major EV
Battery factory in Pakistan. Even though potential is there to establish such a major factory but,
unfortunately, no major work has been done to secure raw materials supply-line as well as
novel technology development through R&D, and adoption of new manufacturing techniques.
Pakistan, along with necessary manufacturing infrastructure, needs to work on all three areas
before it can have at least one major manufacturing facility launched producing at least 3
Gigawatt-hours of battery energy. Let us take a brief look at all three factors.

1.Supply-line of EV battery raw materials: The Lithium Ion (Li-ion) batteries, a standard right
now, require Lithium supply
along with Iron (Ferrous),
Potassium, Phosphates and a
few other minerals like Cobalt
and Nickle. Currently, China is
the main mining and batteries
manufacturing country. Even
though USA is the world’s
largest depositor of Lithium, it
is not actively mining the
mineral. Tesla gets its battery
made by Panasonic but now
building its own factories.
Bolivia is known to supply up
to 40% of the current Lithium

supply and its main mine, Salar de Uyuni

salt flats, is run by a Chinese company;
China’s Xinjiang TBEA Group Co Ltd holds
a 49 percent stake in a joint venture with
Bolivia’s state lithium company, YLB.
Previously, a German company, ACI
Systems GmbH, had a contract with YLB to
extract Lithium but that agreement was
annulled by the Bolivian Governor.
Bolivia’s decision to annul the joint venture fueled speculation that rivals, including China and
Chile (a competing country), used their influence to torpedo the project.

Chinese company and YLB signed another agreement; “..together, the two companies will produce
lithium and other materials from the Coipasa and Pastos Grandes salt flats in the Bolivian Andes, with an
estimated investment of at least $2.3 billion.” Obviously, contracts show, politics plays an important
role while bigger investments play even bigger role. Mining is a big-ticket investment.

Afghanistan’s Ghazni, Nimroz, and Helmand provinces near Pakistani borders have Potassium
Chloride brine deposits (and rare-earth materials too). It is much easier to extract Lithium (6%)
from the brine then mining. It also creates less environmental damage. However, it will take the
railway and road infrastructure to not only extract but to transport the materials out of the area.
A proposed such rail link was talked about between Pakistan and Afghanistan but never
materialized due to costs and Indian meddling. Currently China is in the best position to extract
the minerals and link with CPEC
road system to Gwadar and out to
China. Such multi-billion dollar
extracting, and supply-line
investments are out of reach of
Pakistan. Taliban Government
desperately needs investments to
avoid a complete socioeconomic
meltdown already in process.
Therefore, they will make a deal
with China to let them extract the
minerals of the new economies in
return for hard cash to pay
salaries, food supplies, and basic
healthcare under a pandemic.
Afghanistan also has huge copper
and gold deposits in Kandahar
and near Kabul. Again, by virtue
of sheer volume of investments
and nearness of Gwadar, it makes
perfect sense for the Chinese
investment and mining
companies to make cut-throat
deals with the Taliban. In other
words, Pakistan is going to be left
out, merely, collecting
transportation fees from the
Chinese companies. No diaspora company has such investments and infrastructure capabilities
to take advantage of huge mineral deposits in Afghanistan. Above are two rough pictorials
from an Indian company. For the last 20 years, India has been actively looking to extract
minerals and gemstones from Afghanistan, however, due to Taliban insurgency, India was not
successful even with extensive agreements with the Karzai and the Ghani governments.
Pakistan has good relationships with the Taliban Government but lack of GoP policies and
financial muscle is going to keep the Pakistani and diaspora investors out of the game. A
courageous solution needs to be adopted by Pakistan to extract minerals from its territory but
also help Afghanistan to form partnership with Pakistani companies on barter and other
creative agreements. Pakistan needs to actively establish its mining system as a key-strategic
industry and attract investments from international and local players under Islamic bonds and
other financial arrangements. Recently, the Prime Minister announced steps to improve on
Pakistan’s mining industry. However, without foreign investments (FDIs) and new technology
adaptations, I do not see much difference happening. China is the winner in this game while
Soviet Union, who first surveyed Afghanistan in the 70s and 80’s and had an active operation of
mining but gave up under attacks from the Mujahedeen, lost. USA built upon the Soviet’s
geological surveys with its own satellite imagery, further geological surveys, and the files left
over by the Soviet-- estimated mineral deposits of over a trillion dollars. (Famous CIA report of
2010). Today, these estimates are at $3 trillion. But can Pakistan extract either its own Lithium
deposits in Balochistan and KP province (some in Punjab and Sindh)? And not rely on access to
Lithium deposits in Afghanistan? Problem is, hardly any major mining company exists in
Pakistan with the right technologies and the right system. Coal extraction in Balochistan is filled
with archaic technologies, economically deprived hard labor, and sexual exploitation of young
boys. This kind of mining is killing people, it is immoral, and should be completely revamped.
In summary, no major infrastructure exists within the country to extract Lithium and other vital
minerals within the country. Extracting such minerals from Afghanistan, for a Pakistani
company, is going to be an uphill battle. May be Pakistani companies should start at some
smaller scale and build it up as mining is a key industry for many developed countries.

2. Novel Technology Development: Battery chemistry is changing quickly. Scientists are

looking at packing more electrons in a battery pack. It is not only packing more electrons but
also delivery of these electrons in faster and novel ways that will make a huge difference.
Energy Storage Systems, Inc., a company in Oregon, USA is already delivering Iron flow
batteries for grid storage. Iron is cheap and the cost of the battery is $200 per KWh vs Lithium
batteries at $350/KWh. Iron battery breakthrough could eat lithium’s lunch - MINING.COM.
Even though
Iron flow
batteries are not
for EV but for
grid storage,
technology is
moving fast
towards new
materials that
can provide
more storage at
lower costs and
their mining or
manufacturing
will not damage
the environment
as much. Silicon anode is being developed that can give better performance out of Li-ion
batteries. Enevate’s Silicon Anodes Could Yield EV Batteries That Run 400 km on a 5-Minute
Charge - IEEE Spectrum.

Manufacturers of electric cars know the chemistry will catch up and their existing batteries will
have to be replaced by new batteries. Therefore, they have moved into not just making batteries
but the entire car. This way, people will buy the car and not the battery and the manufacturer
can always switch the battery and keep its battery factories humming. Chinese company, BYD,
is a perfect example. For years they manufactured batteries but now are making electric cars.
Ford recently made a partnership with SK Innovation, a South Korean company, to
manufacture electric cars. SK is the battery manufacturer while Ford the car maker. Their $11.1
billion partnership is trying to solve issue of “use of batteries for electric car” and not
necessarily as to what battery technology is being used. In fact, their joint venture is using
Lithium-Nickle-Manganese-Cobalt Oxide or NCM batteries. Initially, LG took this technology to
a commercial level but then SK Innovations (started in 1962 as a petrochemical company and
launched battery business in 1991), with high investments and right partnerships has now taken
over this market. They are now investing $27 billion to expand their operations to more than 80
GWh of battery production. Just the contract with Ford will allow them to use 60GWh of battery
production by 2025. Ford Commits to Manufacturing Batteries, to Form New Joint Venture with
SK Innovation to Scale NA Battery Deliveries | Ford Media Center.

Even though EV batteries are, again, a high-ticket item, a breakthrough comes from R&D
activities. Chemistry plays an important role. Silicon anode technology is quite promising but
then there are other materials that can and will play an important role in the future EV batteries.
Important is for Pakistan to start becoming a player in this field. We must start somewhere and
the time to start is now. Let us not forget by 2040, every other car will be an electric car. Are we
going to keep importing EV batteries and let the precious foreign exchange drain, continuously?
Pakistan is not able to contain current trade deficits and the rupee is in constant depreciation.
Can we allow this drain to go on for another 10 years or even 5 years? High cost of energy is
causing higher food costs and 9% inflation (officially). It is high time to pay attention and build
EV batteries and other components as a Key Strategic Industry. In fact, the entire Solar
Components Industry needs to be declared a Key Strategic Industry, as a part of National
Security Agenda.

3. Manufacturing of EV Batteries and other related materials: Much is already covered in the
two points mentioned above. Manufacturing of EV batteries is a Capital-intensive investment
that can easily absorb $300-$350 million for a 3 GW battery manufacturing start up facility.
There are new ways being looked at by use of 3D printers to manufacture batteries that may
reduce the costs by 20-50% (more on this later as a separate discussion as it involves sensitive
technologies). Already some major battery companies are looking at novel ways of
manufacturing through 3D printing technologies of Additive Manufacturing (AM). Recently,
Volta made an investment with a 3D printing company, 6K Inc. Volta and a few other
investment companies made an investment of $51 million. Why would they invest in a 3D
printing company? Again, to reduce costs of battery manufacturing. Whosoever can reduce this
cost even by 20% will be the next winner. Pakistan needs to rethink its policy of banning and
requiring NoC from Ministry of Interior for imports of 3D printers. This is a tragic mistake that
is keeping Pakistan away from developing its manufacturing base from using new
manufacturing systems.

Solution: If Pakistan really wants to be a player in EV-battery manufacturing, it needs a robust

GoP policy and an investment incentive. (Current EV policy is not sufficient). A seed money from
GoP of $100 million (minimum) is going to be needed to attract investors from the diaspora
community to make partnerships with local companies in Pakistan and Afghanistan to set up at
least one main Lithium refining and cell manufacturing company while Research and
Development is focused with more grants to universities with incentives to scientists for
materials and circuitry of batteries. Current grant of Rs 700 million to UET, Lahore is completely
insignificant and will not do much to get timely results. It is not even a grain of salt. Ban on 3D
printers needs to be completely removed. At current rates, Pakistan will remain a net importer
of batteries from China. Will this build a local EV industry? Unfortunately, without policies of
controlling Supply-lines, major R&D thrust, and manufacturing through novel technologies, the
goal will remain allusive.

This draft article will become a proposal and is being circulated among related people, entities,
governments for feedback and launching the collaborative work.

Prepared by Mohammad Minhaj Khokhar; Tel: No calls please; email: [email protected].

Author of this Draft article lives on a 60-acre mountain-top Solarized Precision Agriculture Farm/Lab in
Silicon Valley and specializes in building new industries. He is also an inventor and investor. For 5.5
years (1998-2003), he worked with and advised Dr. Mahathir Mohamad of Malaysia to build Malaysian
Microchip Design and Venture Capital Industries brining benefits of billions. He is also former president
for the Muslim Business Chamber of North America. He is part of OPEN Silicon Valley, an organization
of Pakistani Entrepreneurs in North America. Ideas presented here are discussed within the Core Group
in Silicon Valley and their counterparts in Pakistan and Malaysia. They are provided here for your
feedback before the Final Proposal is submitted to Government of Pakistan for adoption.

Disclaimer: This Draft Article is for Discussions only. Confidentiality is of utmost importance as
some of neighboring countries of Pakistan do not want to see Pakistan doing its own technology
developments. Please address any questions to the email address [email protected]. Nothing
is promised unless and until we work on implementing these proposed ideas and no promises
even when the project is implemented. It is your contribution that will achieve results.