Hybrid vehicle prices have surged across Pakistan after the government increased the general sales tax (GST) on hybrid electric vehicles (HEVs) from 8.5% to 25% in the FY2026-27 budget, while the much-awaited Auto Policy 2026-31 remains unannounced.
Toyota and Honda have already revised prices upward, adding more than Rs1.3 million to several hybrid models, while other automakers have reportedly suspended invoicing and deliveries as they await clarity on the new policy.
Indus Motor Company has increased the prices of its Toyota Corolla Cross HEV variants by Rs1.364 million and Rs1.314 million, taking their prices to Rs10.299 million and Rs9.849 million, respectively.
Honda Atlas Cars Pakistan has also raised the price of its HR-Ve hybrid by Rs1.37 million, with the vehicle now costing Rs10.369 million.
Industry sources said some assemblers have temporarily halted invoicing and deliveries of hybrid vehicles, expecting possible revisions under the forthcoming auto policy or a reduction in the new GST rate.
Auto dealers warned that the sharp increase in prices could significantly reduce consumer demand for hybrid and plug-in hybrid electric vehicles (PHEVs), undermining the government's goal of encouraging fuel-efficient and environmentally friendly transport.
The previous Auto Policy 2021-26 expired on June 30, but the government has yet to notify the new five-year policy despite earlier assurances that a draft had been prepared and shared with stakeholders.
According to Topline Securities analyst Asad Ali, the revised policy is expected to introduce a new incentive framework for the auto sector, but no official notification has been issued so far.
During his budget speech on June 12, Finance Minister Muhammad Aurangzeb said the proposed Auto Policy 2026-31 was under review by a committee formed by the prime minister and would be presented to parliament after cabinet approval.
Meanwhile, the government has extended concessions on imports of completely knocked down (CKD) kits for electric vehicles, including electric bikes, three-wheelers, cars and buses, until June 30, 2027.
Separately, under the National Tariff Policy 2025-30, the government has reduced customs duties and regulatory duties on several imported automotive products. However, analysts say these reductions are unlikely to significantly benefit local assemblers, as most already import CKD kits under preferential concessionary regimes.
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