Pakistan is planning major tax relief and financing support for electric and other new energy vehicle (NEV) buyers under the draft Automotive and Auto Parts Manufacturing Policy 2026-31.
The proposed policy includes financing of up to Rs. 10 million for NEVs for five years. It also seeks to expand charging stations, battery swapping and battery-as-a-service facilities.
Locally produced NEVs would receive preferential GST rates. Eligible vehicles would also be exempt from Federal Excise Duty (FED), Capital Value Tax (CVT) and Withholding Tax (WHT), subject to a price limit of $75,000.
The government also plans to reduce customs duty on completely built battery electric vehicles (BEVs) priced up to $15,000. A 5 percent customs duty is proposed for these vehicles during FY2026-27 and FY2027-28.
The draft policy also proposes an Auto Development Levy on internal combustion engine (ICE) vehicles. The levy would be used to support the transition to NEVs, research and development, and local vendor development.
The government aims to increase local manufacturing and value addition in electric vehicles and their components as part of the proposed policy.
The Automotive and Auto Parts Manufacturing Policy 2026-31 is still under consideration and has passed through several government committees since June.
