Pakistan Unveils Auto Policy to Boost EV Sales and Exports

The Government of Pakistan approved the Auto Policy 2026–2031 to lower vehicle prices for the middle class, promote electric mobility, and boost local manufacturing. Announced in Islamabad by Information Minister Attaullah Tarar and Adviser Haroon Akhtar Khan, the framework aims to increase automobile exports from approximately $200 million to $6 billion over five years. To achieve this, the government will offer manufacturers a 5% reward on export value in the first year while imposing fines for missing targets.

To accelerate the adoption of electric vehicles (EVs), the policy sets a target for EVs to comprise 30% of new vehicle sales by 2030. Tax incentives include a 1% General Sales Tax on battery electric vehicles, 6% for extended-range, and 9% for plug-in hybrids. The government also raised the EV financing limit from Rs2 million to Rs10 million and provided customs duty exemptions for charging station machinery.

The policy introduces 45 new safety standards and prohibits manufacturers from collecting advance payments exceeding 20% of a vehicle's price. While import duties were reduced for vehicles below 1300cc to increase affordability, additional duties will be applied to heavy vehicles with commercial engines. The initiative, directed by Prime Minister Shehbaz Sharif, seeks to reduce the national oil import bill and break industry monopolies. The government is currently coordinating with the International Monetary Fund regarding tax collections and EV taxation.