Pakistan’s auto sector is expected to receive good news in the upcoming federal budget for 2026-27. The government is planning tax relief measures for hybrid and electric vehicles (EVs) to make them more affordable for common people. These changes are part of a new five-year auto policy starting from July 1, 2026.
According to recent reports, the government wants to expand support beyond fully electric cars to include hybrids. Proposals include lowering customs duties on vehicle parts and assembled units. Hybrid-specific parts may attract only 5% customs duty, while New Energy Vehicle (NEV) parts could get 1% duty. Sales tax on hybrid vehicles is proposed at 9% (50% of the normal rate).
These steps will help manufacturers reduce production costs and pass on savings to buyers. Lower regulatory duties and removal of some additional taxes are also under consideration. The aim is to promote clean energy transport, reduce Pakistan’s heavy fuel import bill, and fight air pollution in big cities.
Experts believe these incentives could bring down the prices of hybrid and electric cars by a good margin. This will encourage more people to switch from petrol and diesel vehicles. However, final decisions will be announced in the budget.
The move shows the government’s focus on green mobility and supporting local auto industry growth. If approved, these changes could make environmentally friendly cars a practical choice for middle-class families in the coming months.
