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Small and Medium Enterprises (SMEs) form the backbone of Pakistan’s economy, with over 5 million operating nationwide — 60% of them based in Punjab. Representing more than 90% of all businesses, including 72% of manufacturing companies, SMEs employ nearly 80% of the non-agricultural workforce. These enterprises contribute approximately 40% to the country’s GDP, 25% to export earnings, and provide livelihoods to over 25 million people.

Despite their significant role, SMEs face serious challenges. Majority of them operate outside the formal economy, limiting their access to institutional support. Only 6% of private sector credit is extended to SMEs, and they remain excluded from formal financial mechanisms. Outdated infrastructure, complex loan and tax procedures, poor awareness of Islamic banking products, and weak linkages with large firms and financial institutions further hinder their growth.

To unlock the full potential of SMEs, a series of incentive-driven reforms are needed. These include establishing an SME Council or Foundation in private sector with the back of government, recognizing successful formal SMEs as role models, and allocating 25% of government procurement quotas to SMEs. A centralized portal for tax payments, intermediary firms for accounting support, and subsidized energy policies can reduce bureaucratic burdens. Partnerships with universities for capacity building, development of Common Facility Centers, and the setup of industrial clusters — such as those in Rachna Industrial Park (Lahore), running under Federal Ministry  of  industries & Production — will promote sustainable growth.

To improve financial access, the creation of an SME Credit Information Bureau and a dedicated SME Credit Rating Agency (like India’s SMERA) is recommended. Promoting subcontracting relationships between SMEs and large firms, introducing SME-focused banks or low-interest loan windows in all banks, and training bank staff to promote Islamic banking in simple Urdu will support financial inclusion. Lastly, redefining SME classifications — with “Small” set at sales up to PKR 600 million and “Medium” up to PKR 2 billion — will help align policy support with business realities.

With focused policy interventions and coordinated support, Pakistan’s SMEs can transform into a dynamic engine of inclusive economic growth.

Engr. Iftikhar Ahmad,
EC Member LCCI (2024 – 2026)
Advisor – PAAPAM Skill Development Center (PSDC)
Former Chairman PAAPAM

This exclusive article has been published in Automark Magazine’s September-2025 printed and digital edition.

Learning from the Past – Earning from the Present – Growing from the Future

Episode: 6

Summary of the Last Articles

Countries that have economically developed through the auto industry, like America, Europe, Japan, Korea, and nowadays China, are a living example of this, while Pakistan’s development is also inseparable from the auto industry.

We also reviewed the auto market trend in Pakistan and the rest of the world. SUVs are liked for many reasons. Then, we reviewed the HEV business and the related business potential that can be started.

Then we had looked at the past of EV and found that the auto industry started with EV vehicles, maintained their place until the end of World War II, then IC engine vehicles made progress and left the EV industry behind.

After that, we had discussed the real journey of EV, from starting to mass production and the reasons for the rebirth of EV, and the marketed brands of EVs, including Electric Buses, started in different cities as a public transport within Pakistan.

In the last article, we discussed the growth of batteries from the early days to the present, a continuous journey of batteries. We discussed the battery’s history and growing journey, including market analysis in Pakistan.

Now Read On….

The World of Lithium

Global lithium demand is experiencing a significant surge, primarily driven by the widespread adoption of electric vehicles and the expansion of lithium-ion battery technology. This increased demand is creating a “race” to secure lithium supplies, with various countries and companies exploring new extraction methods and locations. While current production is increasing, projections indicate a potential supply shortfall in the coming years, highlighting the urgency of developing sustainable and efficient lithium extraction technologies. 

Factors Contributing to Increased Demand:

• Electric Vehicle (EV) Adoption:

The transition from traditional combustion engines to electric vehicles is a major driver of lithium demand. As more countries implement policies to phase out gasoline-powered vehicles, the need for lithium-ion batteries in EVs continues to rise. 

• Renewable Energy Storage:

Lithium-ion batteries are also crucial for storing energy generated from renewable sources like solar and wind power. As the world shifts towards cleaner energy solutions, the demand for these batteries, and thus lithium, is expected to increase further. 

• Consumer Electronics:

Lithium-ion batteries are widely used in various consumer electronic devices, including mobile phones, laptops, and other gadgets. 

The Race for Lithium:

• Exploration and Development:

With the looming supply gap, there is a global push to explore new lithium deposits and develop innovative extraction methods. 

• Africa’s Potential:

Africa is emerging as a region with significant lithium resources, with projects underway in countries like Zimbabwe, Namibia, and Ghana. 

• Technological Advancements:

Research and development are focused on improving lithium extraction techniques, including direct lithium extraction (DLE) and recycling of lithium-ion batteries. 

• Regional Imbalances:

While global demand is increasing, regional demand is also unevenly distributed, with China, Europe, and the USA being major consumers of lithium. 

Challenges and Concerns:

• Supply Shortfalls:

Projections indicate that global lithium demand could outpace supply by 2029, potentially hindering the transition to electric vehicles and renewable energy. 

• Environmental Impacts:

Lithium mining and extraction can have significant environmental impacts, including water usage, land disturbance, and potential pollution. 

• Ethical Concerns:

The race for lithium has raised concerns about human rights and the potential for exploitation in mining regions. 

The Future of Lithium:

• Sustained Demand Growth:

Despite the challenges, the demand for lithium is expected to continue growing in the coming years, driven by the ongoing transition to EVs and renewable energy. 

• Technological Innovation:

Advancements in lithium extraction and battery technology will be crucial for meeting this demand sustainably and efficiently. 

• Geopolitical Implications:

The competition for lithium resources is likely to have geopolitical implications, with countries seeking to secure their own supplies and influence the global market.

• Lithium Battery:

A lithium-ion battery, or Li-ion battery, is a type of rechargeable battery that uses to store energy. Li-ion batteries are characterized by higher specific energy, energy density, and energy efficiency and a longer cycle life and calendar life than other types of rechargeable batteries.

Noteworthy is a dramatic improvement in lithium-ion battery properties after their market introduction in 1991; over the following 30 years, their volumetric energy density increased threefold while their cost dropped tenfold. In late 2024 global demand passed 1 terawatt-hour per year, while production capacity was more than twice that.

Usage of Lithium Batteries

The invention and commercialization of Li-ion batteries has had a large impact on technology, as recognized by the 2019 Nobel Prize in Chemistry. Li-ion batteries have enabled portable consumer electronics, laptop computers, cellular phones, and electric cars. Li-ion batteries also see significant use for grid-scale energy storage as well as military and aerospace applications.

• Developments of Lithium Batteries

M. Stanley Whittingham conceived intercalation electrodes in the 1970s and created the first rechargeable lithium-ion battery, based on a titanium disulfide cathode and a lithium-aluminium anode, although it suffered from safety problems and was never commercialized.^[12] John Goodenough expanded on this work in 1980 by using lithium cobalt oxide as a cathode.^[13] The first prototype of the modern Li-ion battery, which uses a carbonaceous anode rather than lithium metal, was developed by Akira Yoshino in 1985 and commercialized by a Sony and Asahi Kasei team led by Yoshio Nishi in 1991.^[14] Whittingham, Goodenough, and Yoshino were awarded the 2019 Nobel Prize in Chemistry for their contributions to the development of lithium-ion batteries.

• The growing demand

For safer, more energy-dense, and longer-lasting batteries is driving innovation beyond conventional lithium-ion chemistries. According to a market analysis report by Business Intelligence, next-generation battery technologies—including lithium-sulfur, solid-state, and lithium-metal variants are projected to see significant commercial adoption due to improvements in performance and increasing investment in R&D worldwide. These advancements aim to overcome limitations of traditional lithium-ion systems in areas such as electric vehicles, consumer electronics, and grid storage. ^[24]

• History of Lithium Batteries

1. Research on rechargeable Li-ion batteries dates to the 1960s; one of the earliest examples is a CuF/Li battery developed by NASA in 1965.

• The breakthrough that produced the earliest form of the modern Li-ion battery was made by British chemist M. Stanley Whittingham in 1974, who first used titanium disulfide as a cathode material, which has a layered structure that can take in lithium ions without significant changes to its crystal structure.

• Exxon tried to commercialize this battery in the late 1970s, but found the synthesis expensive and complex, as is sensitive to moisture and releases toxic gas on contact with water. For this, and other reasons, Exxon discontinued the development of Whittingham’s lithium-titanium disulfide battery.

• In 1980, working in separate groups Ned A. Godshall et al.,^[26][27][28] and, shortly thereafter, Koichi Mizushima and John B. Goodenough, after testing a range of alternative materials, replaced TiS₂ with lithium cobalt oxide (LiCoO₂, or LCO), which has a similar layered structure but offers a higher voltage and is much more stable in air. This material would later be used in the first commercial Li-ion battery, although it did not, on its own, resolve the persistent issue of flammability.^[25]

• These early attempts to develop rechargeable Li-ion batteries used lithium metal anodes, which were ultimately abandoned due to safety concerns, as lithium metal is unstable and prone to dendrite formation, which can cause short-circuiting. The eventual solution was to use an intercalation anode, similar to that used for the cathode, which prevents the formation of lithium metal during battery charging. The first to demonstrate lithium ion reversible intercalation into graphite anodes was Jürgen Otto Besenhard in 1974. Besenhard used organic solvents such as carbonates, however these solvents decomposed rapidly providing short battery cycle life. Later, in 1980, Rachid Yazami used a solid organic electrolyte, polyethylene oxide, which was more stable.^[31][32]

• In 1985, Akira Yoshino at Asahi Kasei Corporation discovered that petroleum coke, a less graphitized form of carbon, can reversibly intercalate Li-ions at a low potential of ~0.5 V relative to Li+ /Li without structural degradation. Its structural stability originates from its amorphous carbon regions, which serving as covalent joints to pin the layers together.

• In 1987, Yoshino patented what would become the first commercial lithium-ion battery using this anode. He used Goodenough’s previously reported LiCoO₂ as the cathode and a carbonate ester-based electrolyte. The battery was assembled in the discharged state, which made it safer and cheaper to manufacture.

• In 1991, using Yoshino’s design, Sony began producing and selling the world’s first rechargeable lithium-ion batteries. The following year, a joint venture between Toshiba and Asahi Kasei Co. also released a lithium-ion battery.^[25]

• Significant improvements in energy density were achieved in the 1990s by replacing Yoshino’s soft carbon anode first with hard carbon and later with graphite. In 1990, Jeff Dahn and two colleagues at Dalhousie University (Canada) reported reversible intercalation of lithium ions into graphite in the presence of ethylene carbonate solvent (which is solid at room temperature and is mixed with other solvents to make a liquid). This represented the final innovation of the era that created the basic design of the modern lithium-ion battery.

1. In 2010, global lithium-ion battery production capacity was 20 gigawatt-hours. By 2016, it was 28 GWh, with 16.4 GWh in China. Global production capacity was 767 GWh in 2020, with China accounting for 75%. Production in 2021 is estimated by various sources to be between 200 and 600 GWh, and predictions for 2023 range from 400 to 1,100 GWh.

1. In 2012, John B. Goodenough, Rachid Yazami and Akira Yoshino received the 2012 IEEE Medal for Environmental and Safety Technologies for developing the lithium-ion battery; Goodenough, Whittingham, and Yoshino were awarded the 2019 Nobel Prize in Chemistry “for the development of lithium-ion batteries”. Jeff Dahn received the ECS Battery Division Technology Award (2011) and the Yeager award from the International Battery Materials Association (2016).

1. In April 2023, CATL announced that it would begin scaled-up production of its semi-solid condensed matter battery that produces a then record 500 Wh/kg. They use electrodes made from a gelled material, requiring fewer binding agents. This in turn shortens the manufacturing cycle. One potential application is in battery-powered airplanes. Another new development of lithium-ion batteries are flow batteries with redox-targeted solids that use no binders or electron-conducting additives, and allow for completely independent scaling of energy and power.

Pakistan’s Future with Lithium

With the brand launch in Pakistan of BYD, a Chinese company that sells electric vehicles worldwide, while its global network seems to be strengthening, new opportunities have emerged for Pakistan’s auto sector.

Wait for World of Lithium and Future of Pakistan’s with Lithium and Lithium Batteries, by staying connected with Monthly AUTOMARK, then say together Grow Automotive Grow Pakistan, INSHALLAH. ‏

This exclusive article has been published in Automark Magazine’s September-2025 printed and digital edition. Written by Mumtaz Hussain