Auto Policy 2026-31: what it changes for electric and hybrid car buyers

On 7 November 2026 the government announced a new five-year car policy, the Auto Policy 2026-31. The headlines were about cheaper electric cars and bigger car loans. This guide sets out what was actually announced for someone buying an electric car, a plug-in hybrid or a hybrid, and it starts with the part most headlines skipped.

Nothing in the policy is in force yet. As of 12 November 2026 it is a draft approved by the Prime Minister. It still has to go to the federal cabinet, and its tax changes then need a money bill in parliament. No date has been announced for any of it. Until that happens, the rates you pay in a showroom are the ones in the last section of this page.

Where the policy stands

We have not seen the policy document either. Everything below comes from the press conference and from reports of the draft in the national press, and where those reports disagree, this page says so.

The proposed sales tax, by kind of car

The policy sorts cars with a battery into four kinds and taxes each one differently. If the names are new to you, this guide explains all four.

Read as a buyer, that table says four things.

A locally made or assembled electric car gets no new tax cut. It already pays 1 percent. What the policy adds is certainty: the 1 percent rate is currently extended only to 30 June 2027, and the policy would keep it for five years. The locally assembled models among the 71 electric cars on sale here are priced with that rate already inside; an imported one is not.

A plug-in hybrid is the kind with the most to gain. A rate of 9 percent would be half or less of what it pays now. There are 16 plug-in hybrids on sale that this would touch.

A range extender would be taxed more, not less. These cars drive on their electric motor and carry a petrol engine only as a generator. Today they are taxed like a fully electric car at 1 percent, and the proposal is 6 percent. Our plug-in hybrid list has 6 range extenders: the Deepal S05 REEV, the Forthing Friday REEV, the ArcFox T5 REEV, the Nevo Hunter REEV, the XPeng L03 REEV, the iCaur V27.

A hybrid with no plug sees no change. The policy treats it as a petrol car for tax, which is where it already is. Every hybrid on sale is here, with its fuel bill.

How much could a price move?

Sales tax is charged on the price before tax, so the arithmetic is simple. It is only arithmetic. It assumes the whole change reaches the buyer and that nothing else about the car's cost moves, and neither is promised.

Cars above USD 50,000 are left out

The concessions are limited to cars valued below USD 50,000. Above that line an electric car counts as a luxury and pays normal taxes.

Small imported electric cars: 5 percent duty, with conditions

A fully built electric car imported at a value of up to USD 15,000 would pay 5 percent customs duty for two years, 2026-27 and 2027-28. This is the measure aimed at the cheapest end of the market.

It is not open to anyone. The importer has to commit to assembling or making the car in Pakistan, post a bond and a bank guarantee, and start commercial production by 30 September 2028. One report adds that the rate rises to 25 percent for the following two years and then settles at 15 percent.

A new levy on petrol and diesel cars

The policy also adds an Automotive Development Levy on cars with an engine:

One report says the levy would also apply to hybrids above 1,000cc. That is not confirmed, and it matters, because it would make a hybrid slightly dearer while a plug-in hybrid gets cheaper.

Loans: up to Rs 1 crore over five years

The limit on a bank loan for an electric car would rise to Rs 1 crore, and the longest term from three years to five. Most reports put the present limit at Rs 30 lakh.

This is not a government loan scheme and there is no subsidised rate in it. It is a higher ceiling under the State Bank's car financing rules, and banks cannot offer it until those rules are changed.

Charging: cheaper equipment, no new target

Machinery and equipment imported for charging stations would pay no customs duty and 1 percent sales tax, according to most reports. One outlet reports the duty as 1 percent instead.

The policy, as reported, sets no new number of stations and no new electricity tariff. The target that stands is the earlier one: about 3,000 public charging facilities by 2030. In a written reply to the National Assembly on 22 October 2026 the government described the first step as 40 fast charging stations on the motorways and the N-5, with a charger about every 50 km, and at least 10 percent of each fuel company's stations in every province fitted with fast chargers.

For scale, Sarai lists 133 public chargers today, of which 91 are DC fast chargers, across 33 cities. The map shows every one, and this guide measures the network against the 2030 target.

What you pay today

These are the rates in force as of 12 November 2026. They come from the 2026 budget and the notifications since.

• Fully electric, made or assembled here: 1 percent sales tax, extended to 30 June 2027.
• Hybrid, made here, up to 2,000cc: 18 percent. The old concession of 8.5 and 12.75 percent ended on 30 June 2026 and hybrids moved to 25 percent on 1 July. A notification of 13 September 2026 then cut locally made hybrids up to 2,000cc to 18 percent.
• Imported hybrids, hybrids above 2,000cc and plug-in hybrids: not covered by that cut. Most reports put them at 25 percent.
• Imported electric cars: no federal excise duty up to a customs value of USD 75,000, 30 percent from there to USD 110,000, and 40 percent above.

What to do if you are buying now

An electric car. The tax on it does not change under the policy, so there is no tax cut to wait for. The loan limit is the part that could help, and it has no date.

A plug-in hybrid. The proposal would lower its tax, and nobody can tell you when. If you book now, ask the dealer in writing what happens to your price if the rate changes before delivery.

A range extender. The proposal would raise its tax. Ask the same question, the other way round.

A hybrid. Nothing proposed changes its sales tax. Watch the levy.

Whichever it is, the running cost is the part no policy changes much. The cost calculator works it out for your own distance and your own electricity rate, and the comparison tool puts any two or three cars side by side.

Sources

This guide is built from the reports below. The policy document itself has not been published.

• Dawn, 7 November 2026: Govt announces auto policy with focus on cheaper vehicles, EVs
• Dawn, 8 November 2026: Auto policy sets $6bn export target over five years
• The Express Tribune, 7 November 2026: Govt unveils new auto policy aimed at promoting EVs, boosting localisation
• The Express Tribune, 12 November 2026: PM okays IMF-cleared auto policy
• The Express Tribune, 21 October 2026: PM okays 1% sales tax on battery EVs
• ProPakistani, 21 October 2026: Breakdown of new sales tax rates in upcoming auto policy
• ProPakistani, 11 November 2026: Carmakers do not have a copy of the new auto policy
• Business Recorder, 7 July 2026: Hybrid vehicles supply, import: 25pc sales tax rate will now be applicable
• Business Recorder, 14 September 2026: Govt cuts HEV sales tax from 25% to 18%
• Business Recorder, 23 October 2026: NA told: Govt plans 3,000 EV charging facilities
• Profit, 23 June 2026: Govt proposes zero excise duty on electric cars and SUVs
• Profit, 12 September 2026: FBR extends EV CKD tax relief till June 2027