At first glance, the alliance between Hubco and Mega Motors does not make sense. After all, one is a power producer, indeed the first Independent Power Producer, and the other is an automotive concern. Yet they have formed a joint venture which gives Hubco’’s wholly renowned Hub Power Holdings Limited a 50 percent stake in Mega Motor Company, which is in turn owned by Mega Conglomerate. The secret is revealed by the fact that Mega Motors has made a deal to make and market BYD vehicles. The Chinese company is the biggest electric vehicle company in the world. Hubco has been one of the companies which are having their power purchase agreements terminated early, and now it needs to diversify beyond power generation quickly. It should be remembered that oil companies were once the biggest researchers into solar power, while motorcar companies were among the earliest researchers in electric vehicles. Though none of them are in the front rank of either power generation or automobiles, the synergy has still proved useful.
By moving from an oil-fired business to one taking solar energy, Hubco is still leaving itself room to get back into generation, though solar this time. Hubco has British, Saudi and US investors, which means that they are now in alliance with a Chinese EV maker. BYD may be able to leverage this alliance into gaining greater access to British and US solar and automotive technology. This agreement may also be seen as symbolic of how it is possible, in this globalized world, to bypass nationalistic barriers. Who would have imagined a joint venture between two Pakistani firms involving a Chinese and a US investor? If the incoming Trump Administration tries to strangle BYD with tariffs, what is to stop Xentergy, Hubco’s American investor, from lobbying for relaxation?
Hubco is clearly looking to a future where oil is no longer king, and in that respect is proving itself worthy of the many awards it has won from the Marketing Association of Pakistan, not just for showing corporate responsibility, but also for being forward-looking. There is a storm of innovation coming, and those following previous paradigms, like strident nationalism, re going to be left behind in the dust of the innovators. In a way, the government did Hubco a favour by turfing it out of the power generation business.
