Pakistan Plans Rs. 10 Million Financing for Electric Vehicle Buyers
The government is considering a new financing and tax support package to encourage the purchase and local production of electric and other new energy vehicles in Pakistan.
Under the draft Automotive and Auto Parts Manufacturing Policy 2026-31, buyers of qualifying new energy vehicles (NEVs) could be eligible for financing of up to Rs. 10 million for a period of five years.
The proposed policy also focuses on developing the infrastructure needed for electric vehicles, including charging stations, battery-swapping facilities and battery-as-a-service networks.
Locally manufactured NEVs may receive preferential treatment under the proposed tax framework. Eligible vehicles could also be exempted from Federal Excise Duty (FED), Capital Value Tax (CVT) and Withholding Tax (WHT), subject to a vehicle price limit of $75,000.
The draft policy further proposes lower customs duties for completely built battery electric vehicles (BEVs) priced up to $15,000. A customs duty rate of 5 percent has been proposed for such vehicles during fiscal years 2026-27 and 2027-28.
To encourage a gradual shift away from conventional internal combustion engine (ICE) vehicles, the government is also considering an Auto Development Levy on ICE vehicles.
The proposed levy would help generate funds for the development of new energy vehicles, research and development activities, and the growth of local automotive suppliers.
Another key objective of the policy is to increase domestic manufacturing and value addition in electric vehicles and their components. The government aims to strengthen local production while reducing reliance on imported vehicle components.
The Automotive and Auto Parts Manufacturing Policy 2026-31 is still under consideration. The draft has been reviewed by several government committees since June, and its proposals may be changed before the policy receives final approval.
