Business Analysis

Assignment No: 2
Section: B group - 6
Submitted To:
Dr. Sami Ullah

Submitted By:

Shaista Bano l1f17bsaf0112

Zunaira Riaz l1f17bsaf0045
Summaya Sher l1f19bsaf0134
Zarish Qintar l1f17bsaf0104
Javaria sadique l1f19bsaf0182
 PESTEL Analysis of External Environment for the First Electric
Car Introduced in Pakistan by Topsun Motors

Introduction about PESTEL analysis

PESTEL analysis
PESTLE analysis (formerly known as PEST analysis) is a framework or tool used to analyze and
monitor the macro-environmental factors that may have a profound impact on an organization’s
performance. This tool is especially useful when starting a new business or entering a foreign
market. The PESTEL model looks at the macro-environment, using the following headings:
 Political
 Economic
 Social
 Technological
 Ecological/environmental
 Legal
Some information about Topsun Motors
Pakistan, in its commitment to implement the National Electric Vehicle Policy (NEVP), has
launched the first-ever electric car company in the country, Topsun Motors, in partnership with
China. The company cut the ribbon on its showroom called Topsun MR Motors on in Lahore on
3rd January 2020.
It is pertinent to point out that for now all these cars are engine-based and the prices are inclusive
of withholding tax. Currently, the company is waiting for the implementation of the NEVP
before launching the electric-powered variant of Z100, which is already available in global
markets.
According to the company, the electric Z100 will have a range of 300KM on a single battery
charge and will have a price-tag of around PKR 1.9-2 million which might reduce based on the
NEVP.

PESTEL Analysis of external environment for first electric car in

Pakistan
In PESTEL analysis of external environment for electric car, we analyzed six factors to
understand that either these factors could effect on this important innovation and what would be
the outcomes. So, let’s move for analyzing these six components.

Political Influences
As we already know that political factor of PESTEL analysis determine the extent to which
government and government policy may impact on an organization or a specific industry. This
would include political policy and stability as well as trade, fiscal and taxation policies too.
Cost on oil based product:
The transportation sector has been growing with a double digit growth in Pakistan. Almost all of
the transportation sector is dependent on oil-based products and the country and government is
spending almost USD 13 billion on the import of oil every year. If our transport sector continues
to grow at the same double digit rate, the bill for oil import is expected to reach USD 30 billion
by 2025.
Taxation policies:
While the running cost of EVs (Electric Vehicles) is one third of FFVs, (Fossil Fuel Vehicles)
the capital cost is quite high. Therefore, we propose that the duty and taxes for EVs should be
reduced to 5 percent. Initially, the government can give this relaxation to Completely Built Units,
so as to encourage the local automakers to manufacture EVs in Pakistan.
Infrastructures:
To encourage charging infrastructure, the government may form public private partnerships to
encourage entrepreneurship in this area. Contrary to oil the charging infrastructure, such an
approach requires opportunistic charging strategy. This means that, other than dedicated
charging stations, the charging stations can also be installed at offices, homes, restaurants, and
shopping malls etc. The charging infrastructure companies may not get a profit until sufficient
EVs are in place. Therefore, tax breaks and other incentives are necessary to encourage
entrepreneurship in this area.

Economic Influences
These factors impact on the economy and its performance, which in turn directly impacts on the
organization and its profitability. Factors include interest rates, employment or unemployment
rates, raw material costs and foreign exchange rates.
Cost saving:
Initially, an EV costs more than an FFV due to its higher price tag. However, in the long run
EV’s cost becomes comparable to its similar FFV. This is due to a number of factors such as
minimal maintenance cost, less duties, cheap price of electricity and so on. Additionally, in the
next few years, the purchase price of EVs is expected to decline further which will make EVs
even a more economically viable option in a lesser period of time.
Economically Beneficial:
Keeping in view the present sale price of an EV and its similar FFV, we have provided a
comparison illustrating how an EV is an economically viable option as compared to a similar
FFV.
Raw material cost:
There is no doubt that governments and manufacturers have realized that EVs are the future
mode of road transportation. Of course, the very basic ingredient of EV is availability of
electricity. Whenever we discuss EV adoption in the context of Pakistan, the first question we
always face is about the shortfall of electricity in Pakistan. According to survey, the demand in
Pakistan varied between 8,000 MW to around 26,500 MW in 2017. Pakistan is going to touch a
peak generation capacity expansion of 62,000 MW by 2025 while our peak demand may just
touch 40,000 MW. This spare is more than enough to shift much of the transportation fleet of the
country on electricity.

Ecological/environmental Influences
These factors relate to the influence of the surrounding environment and the impact of ecological
aspects. With the rise in importance of CSR (Corporate Sustainability Responsibility), this
element is becoming more important. Factors include climate, recycling procedures, carbon
footprint, waste disposal and sustainability.
Pakistan currently stands at an alarming position on the global air index rankings. The air
quality, particularly in the urban areas, has gone so worse due to the ever-increasing emissions
from automobiles and industries. Therefore, the government aims to shift to electric mobility
Almost 37 percent electricity generation in Pakistan is from renewable sources. Adding this to
the efficiency of EVs results in 70-80 percent less environmental emissions when compared to
FFVs. So producing EVs companies may bear minimum amount of environmental damages.
Social influences
These factors focus on the social environment and identify emerging trends. This helps to further
understand their customers’ needs and wants. Factors include changing family demographics,
education levels, cultural trends, attitude changes and changes in lifestyles.
Understand customer’s needs and wants:
The goal of any sustainable transport policy is to ensure that our transport systems meet society's
economic, social and environmental needs. The government may also reduce customs duty on
kits of electric vehicles from 25 per cent to 1 per cent.
Change in life style:
The overall impact of the electric vehicle revolution will benefit society and also it would be a
big change in Pakistan. EV revolution will not only help our environmental problem, but also
benefits public health and fuels technological innovation, which is the backbone of society. It’s
time to embrace the change and look towards our future.
Attitude changes:
Many countries around the globe announced their policies for Electric Vehicles (EVs). Some
countries went as far as announcing plans to completely halt sale of Fossil Fuel Vehicles (FFVs).
Other countries such as China, Germany, Sweden and many US States used EVs and sell them
all over the world. Even developing countries like India have announced to increase their share
of EVs sale to 30 percent and completely shift to all electric buses by 2030. So, attitude is
currently changed all over the world.

Technological influences
The technological environment is influenced by government spending on research, new
discoveries and development, government and industry focus of technological efforts.
In all over the world many countries already used EVs as well as Self-Driving Cars has been
used. Countries becomes advanced in technologies day by day. EVs in Pakistan it will be a big
change as well as it will be a technological change.
Research and development:
To maximize the benefits of EVs in Pakistan, a Research and Development (R&D) facility is
required. This facility should pursue activities for indigenous development of technologies for
EVs. Through this government and industries focuses toward new technologies.

Legal Influences
The legal environment covers influences such as taxation, employment law, monopoly
legislation and environmental protection laws.
Taxation:
Legal compliance is an important challenge before the businesses and being unable to comply
may result in large fines for businesses. Companies are legally bound to pay taxes. Introducing
EVs in Pakistan the government can give this relaxation to Completely Built Units, so as to
encourage the local automakers to manufacture EVs in Pakistan.
Environmental protection laws:
With the rise in importance of CSR (Corporate Sustainability Responsibility), is becoming more
important. EVs help to protect our environment. Legally companies are bounded to protect
environment. Also provide safety and security to consumers.

Final Thoughts

The motor vehicle has become a part of everyday life for many of us. Not only can we afford to
buy and fuel our cars more than ever before, but we’re also implicitly expected to use
automobiles. However, the Environmental consequences of driving are serious, and it looks like
we might have to think about making the switch to electric vehicles to save our planet.