Web Desk: Pakistan’s hybrid car market has entered a new phase of price revisions after the government changed the sales tax structure for locally manufactured Hybrid Electric Vehicles, or HEVs.
The Federal Board of Revenue implemented an 18% sales tax on eligible HEVs from Sept. 13, 2026, prompting several automakers to reassess prices for their hybrid models.
The FBR introduced the revised rate through S.R.O. 1525(I)/2026. The notification covers locally manufactured hybrid vehicles with engine capacities of up to 2,000cc.
The 18% rate is lower than the standard 25% sales tax. However, it is higher than the preferential rates available to hybrid vehicles under the previous Auto Policy.
Under the earlier structure, HEVs with engine capacities below 1,800cc faced an 8.5% tax, while models with engines of 1,800cc and above were subject to a 12.75% rate.
Following the tax change, several carmakers have started updating prices for their hybrid lineups.
The revisions come as manufacturers adjust their pricing to reflect the new tax regime. Consequently, buyers looking at locally produced hybrid vehicles may now encounter different price tags than those available under the previous tax structure.
Although the new 18% rate represents a reduction from the general 25% sales tax, it removes the lower tax advantages previously available to eligible HEVs.
As a result, the impact on individual vehicle prices will depend on factors including the model, engine capacity and the manufacturer’s pricing decisions.
The latest revisions are expected to keep Pakistan’s hybrid vehicle market under close watch as automakers continue to respond to the government’s updated taxation framework.
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