Electric Vehicle Policy Pakistan: What the 2026–31 EV Parts Duty Draft Proposes

The electric vehicle policy Pakistan has been waiting for took a step forward on Tuesday, when the Prime Minister approved the draft Auto and Auto Parts Manufacturing Policy 2026–31. It is not law yet, and the proposed parts duties inside it are not being charged.

Every rate below is a proposal from a draft. None has been notified. Where something is already in force, this article says so separately and names the instrument.

For the wider picture of how the policy reached this point, see our Auto Policy 2026–31 approval update and the earlier IMF talks on the policy.

Where the Draft Policy Actually Stands

Prime Minister Shehbaz Sharif approved the draft on 20 October 2026. Dawn reported it the following day and noted that the Prime Minister's Office issued no official statement, with the draft shared by government sources.

Three steps remain. The draft goes to the federal cabinet for in-principle approval, and then a bill goes to parliament. The Express Tribune reports IMF vetting ahead of cabinet.

The context worth holding on to is that the previous policy, AIDEP 2021–26, expired on 30 June 2026. Pakistan has been without an auto policy in force for nearly four months.

In September, an Information Ministry statement said a committee chaired by the Law Minister was still reviewing the policy clause by clause, with inter-ministerial consultations continuing. That was the position six weeks before the Prime Minister's approval.

Proposed EV Parts Import Duty in Pakistan

The headline number for EV parts import duty Pakistan is 1 per cent, and it is the same figure for cars and SUVs. But the exact wording matters more than the rate, and it is where most coverage goes wrong.

The Express Tribune describes the approved draft as offering a reduced tariff of just 1 per cent on EV-specific non-localised parts imported in CKD form. The concession attaches to parts that are not made in Pakistan.

Proposed rates from a draft awaiting cabinet and parliament. Not notified and not currently charged. Verify against the relevant FBR notification before relying on any figure for a commercial decision.

One duration caveat deserves emphasis. In June the Express Tribune reported the industry ministry proposing 1 per cent on NEV-specific parts for three years, rising to 5 per cent from year four. The October reporting on the approved draft does not repeat that sunset, so treat the 1 per cent as undated rather than permanent.

Localised vs Non-Localised: Why the Concession Looks Backwards

Most people searching for localized EV parts duty Pakistan expect localised parts to carry the lower rate, because localisation is what the policy says it wants. The structure is the other way round, and deliberately so.

A localised part is one a Pakistani vendor already manufactures. A non-localised part is one nobody here makes yet.

If you want local vendors to survive, you make it cheap to import what cannot be made here and expensive to import what can. A low rate on localised parts would let an assembler bypass every Pakistani supplier it already has.

That is why the May draft showed general CKD at 5 per cent for non-localised parts and 10 per cent for localised ones — double. The same logic produces the 1 per cent EV concession attaching to non-localised parts.

The practical consequence for an assembler is that parts classification decides the bill, and this is what electric car parts duty Pakistan actually turns on. Whether a component counts as localised is a tariff determination, not a marketing description, and the whole concession turns on it.

Electric Motorcycles, Rickshaws and Three-Wheelers

On electric motorcycle parts duty Pakistan, the May draft reported parts inputs for two-wheel and three-wheel NEVs at 1 per cent, the same treatment as four-wheelers, covering imported and locally supplied inputs alike.

What has been reported of the October text makes no mention of two- or three-wheelers at all. It covers general EV categories, and the levy it describes applies to vehicles above 1,000cc, which does not reach bikes or rickshaws.

So the honest position is that the 1 per cent figure for bikes and rickshaws comes from the May draft and has not since been reconfirmed. Electric rickshaws are not named separately in either; three-wheel NEVs is the category that covers them.

What Is Already in Force, as Opposed to Proposed

This is the part no one separates, and it is the question an actual importer needs answered. The draft's parts duties were originally meant to start on 1 July 2026. They did not.

At budget time in June, the Express Tribune reported that no final draft was ready for incorporation in the tax laws. The rates went into a policy document rather than into law.

Two things involving electric vehicles are in force, and neither is the 1 per cent parts duty.

Two different 1 per cent figures circulate in this story. One is a proposed customs duty on parts; the other is an enacted withholding tax on CKD kit imports. They are not the same tax and cannot be added together.

The Ministry of Industries' own New Energy Vehicles policy document sets the direction rather than the rates, committing to gradual adjustment of customs, additional customs and regulatory duty, and to phasing out the sector's special duty regimes by 2030. The additional customs duty position actually in force sits in S.R.O. 1063(I)/2026.

The Four EV Categories Are Taxed Four Different Ways

Parts duty is only one line in the bill. Sales tax under the approved draft splits by drivetrain, and the categories are not interchangeable.

Battery electric vehicles get 1 per cent for 2026–31, locally assembled and imported alike. Range-extended EVs are set at 6 per cent and plug-in hybrids at 9 per cent.

Conventional hybrids get no concession at all. The Express Tribune reports that HEVs and conventional petrol vehicles will be treated equally in duties and taxes. A hybrid is not an NEV under this draft.

Above those, the draft proposes a 10 per cent federal excise duty on EVs valued over $75,000, so the relief is aimed at the affordable end. Our EV buying guide for Pakistan covers what these categories mean in daily use.

What It Could Mean for Local Assembly

The EV local assembly policy Pakistan is proposing ties incentives to performance rather than handing them over. The draft sets a $6 billion export target, with a penalty of 1 to 3 per cent of annual production value for missing minimum targets.

Miss them two years running and the manufacturing certificate is cancelled. That is a materially different bargain from previous policies.

The parts industry is not persuaded. PAAPAM Chairman Abdul Rehman Aizaz told Dawn the policy lowers the parts import tariff to 15 per cent, and warned that it "will make Pakistan an import destination country with no local industrial base in the auto sector."

That objection is worth taking seriously precisely because it comes from the trade body representing parts manufacturers — the constituency the localisation rules are meant to protect.

Why Cheaper Parts Need Not Mean Cheaper Cars

A duty cut on components reduces one input cost. It does not set a retail price.

Between the landed cost of a part and the figure on an invoice sit assembly cost, sales tax, excise duty where it applies, the new levy on larger vehicles, dealer margin, the exchange rate and whatever the market will bear while order books are full.

The draft also raises EV financing from Rs 3 million to Rs 10 million and extends the term from three years to five, which changes monthly affordability more directly than a parts duty does — see our note on the proposed EV financing changes in Pakistan.

Final Thoughts

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