ISLAMABAD: Vehicle prices in Pakistan could see significant changes under the proposed New Auto Policy 2026–31, with several categories of petrol, hybrid and electric vehicles potentially becoming cheaper.
According to preliminary industry estimates, conventional petrol-powered cars could become 8 to 10 per cent cheaper, while hybrid vehicles may see a price reduction of around 9 per cent.
Plug-in hybrid electric vehicles (PHEVs) could witness a price decline of more than 20 per cent under the proposed policy.
Battery electric vehicles (BEVs) with an import value of less than $15,000 could become approximately 22 per cent cheaper. Meanwhile, higher-priced electric vehicles may see a reduction of around 8 per cent.
However, not all vehicle categories are expected to benefit from the proposed changes. Range-extended electric vehicles (REEVs) could become approximately 3 per cent more expensive under the proposed tax structure.
Proposed Sales Tax Rates for Electric Vehicles
According to Topline Securities, the proposed policy draft recommends a general sales tax (GST) rate of 1 per cent on battery electric vehicles, 9 per cent on plug-in hybrid vehicles and 6 per cent on range-extended electric vehicles.
The proposed tax structure could affect vehicle prices differently depending on the technology and import value of each vehicle.
Government Plans to Reduce Tariffs on Auto Parts
Under the proposed policy, the government plans to reduce tariffs on locally manufactured automotive parts from 25 per cent to 15 per cent by fiscal year 2031.
The measure is aimed at changing the tariff structure for the local automotive industry over the coming years.
Buyers May Delay Vehicle Purchases
Industry experts warn that expectations of lower vehicle prices could prompt prospective buyers to postpone their purchasing decisions until the proposed policy and its tax measures are finalised.
Such delays could affect vehicle sales in the short term, particularly if consumers wait for the anticipated price reductions before making new purchases.
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