Margalla Heavy Industries Limited (MHIL), a military-owned company, has signed an agreement with Chinese partners and local investors to set up a $2.25 billion lithium-ion battery manufacturing plant in Rawalpindi. Production is expected to begin six to eight months after the government approves the policy.
Engineering Development Board (EDB) CEO Hamad Ali Mansoor told the media platform that feasibility studies are complete and the project awaits approval. He said the building is ready and the machines are installed.
The project was signed in July with a Chinese company he described as one of the “top-tier manufacturers,” of China along with a local private-sector investor. He did not name either party. The facility will produce lithium-ion cells with an annual capacity of more than 1,000MW. The first factory will initially produce 200-300MW before reaching full capacity.
The plant is located at Heavy Industries Taxila in Rawalpindi district. MHIL manufactures defence equipment, including battle tanks, armoured vehicles, unmanned drones and protective gear, as well as compact battery energy storage systems, EV buses and two-wheelers.
The general manager for digital media in MHIL, Muhammad Ameen, was not immediately available for comment. Automotive and Auto Parts Manufacturing Policy 2026-2031.
The agreement follows the approval by Prime Minister Shehbaz Sharif of the Automotive and Auto Parts Manufacturing Policy 2026-2031. The policy awaits IMF approval over proposed tax incentives for the electric vehicle industry and their potential revenue implications.
The EDB estimates that demand for battery energy storage systems (BESS) could reach 100,000MW by June 2030 if the economy grows by 5 percent or more.
If GDP growth falls below 3 percent, demand is projected at up to 80,000MW. Mansoor said demand would come from households, commercial buildings, industry and electric vehicles, including two-wheelers, three-wheelers, cars, buses and trucks.
Grid stabilization alone could require 3,000-5,000MW of battery storage. Meeting the projected demand would require four to five gigafactories, each costing around $1 billion to $1.25 billion.
The government prepared a lithium battery manufacturing policy and submitted it to the Ministry of Industries in March. It awaits approval. The plan includes four major factories, three in the Lahore, Faisalabad and Rawalpindi divisions of Punjab and one in Karachi.
Manufacturers would be required to export a specified percentage of production, though Mansoor declined to give the target before approval. He said the policy incorporates international safety and performance standards.
Pakistan currently assembles around 3,000-4,000MW of batteries, along with parts such as motors, controllers and chargers. Mansoor said local manufacturing of all these parts will begin at 100 percent by next year.
