Pakistan’s automobile industry could see lower prices for hybrid and electric vehicles after the upcoming federal budget in June. The government is considering tax cuts and reduced import duties to make environmentally friendly vehicles more affordable for the public, according to reports.
According to recent policy discussions, the government plans to reduce customs duties and gradually remove additional customs duties (ACD) and regulatory duties (RD) on vehicles and auto parts. These taxes currently increase the cost of importing vehicles in Pakistan. However, lower taxes could reduce manufacturing expenses and eventually lower showroom prices for buyers.
Additionally, the proposed policy is not limited to fully electric vehicles (EVs), but the authorities also want to support hybrid vehicles as part of Pakistan’s clean energy and transport strategy. Hybrid vehicle parts may face only around 5% customs duty and sales tax on hybrid vehicles could also be reduced.
Some EV related parts and kits used for local assembly may receive reduced duties between 5% and 10%. This would help local manufacturers produce vehicles more cheaply within Pakistan.
Further, the government’s aim is to encourage people to shift from traditional petrol and diesel vehicles toward cleaner alternatives. This could help Pakistan reduce fuel imports, lower pollution, and support energy savings in the long run. Cheaper hybrid and electric vehicles may also increase competition in the auto market and improve availability for middle class consumers, according to analysts.
However, the proposals are still under discussions to be fully implemented. Some industries support the reforms because they may lower prices and boost sales, while others worry that rapid tariff reductions could affect jobs in the domestic auto industry.
In other news, Prime Minister Shehbaz Sharif has announced that government employees up to BPS-16 will be provided electric bikes on easy instalments, as part of efforts to promote eco-friendly transportation.
The announcement was made during a high-level meeting chaired by the prime minister to review the progress of electric vehicle (EV) adoption in the country.
Also read: PM pushes faster shift to electric vehicles to cut fuel imports
