Pakistan Weighs Major Auto Duty Cuts and EV Incentives in Budget Plan

The plan signals a pivot toward cheaper new‑energy models with a focus on local assembly.

Overview

Government proposals under discussion were detailed Tuesday in local reports as Budget 2026-27 consultations neared completion.
Draft measures would scrap the additional customs duty and reduce regulatory duty under the National Tariff Policy to cut prices and simplify the tariff grid.
Rates under review include about 5% on most auto and hybrid parts, 10% on fully built imports, and 5–10% on completely knocked down kits depending on localisation.
The policy broadens support to new‑energy vehicles beyond battery EVs to include plug‑in hybrids, range‑extended EVs, and fuel‑cell cars, with NEV‑specific parts and inputs proposed at 1% and preference for locally assembled units.
Hybrid vehicles would see 5% duty on parts and a 9% sales tax, and officials say the wider package could lower EV prices by up to 30% from July 1, 2026 if approved in early June, with incentives tapering by FY 2029-30.