The expiry of Pakistan’s auto policy has brought hybrid and plug-in hybrid vehicle sales to a near standstill as buyers and automakers await the government’s new policy.
The Auto Industry Development and Export Policy 2021 to 2026 expired on June 30, increasing the sales tax on hybrid electric vehicles (HEVs) and plug-in hybrid electric vehicles (PHEVs) from 8.5 percent to 25 percent. The government has yet to notify the Auto Policy 2026 to 2031.
According to industry sources, objections from local automakers to an early draft that aimed to accelerate electric vehicle adoption delayed the new policy. Industry officials said several vehicle assemblers have suspended invoicing and deliveries of hybrid models until the government announces the new policy.
The government is reportedly considering a cabinet summary that would reduce the sales tax on hybrid vehicles to 18 percent. However, the current 25 percent sales tax will remain in effect until the cabinet approves the proposal.
Industry representatives warned that the continued delay has left vehicles unsold, kept buyers waiting, and prevented the government from collecting potential tax revenue.
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