Pakistanis planning to purchase electric and hybrid vehicles may face higher costs in the coming months as the government considers new tax measures in the Budget 2026-27.
According to reports, authorities are reviewing existing tax incentives for electric vehicles (EVs) and hybrid models as part of broader fiscal reforms. If approved, the proposed changes could significantly increase vehicle prices across the country.
Currently, EVs enjoy a reduced General Sales Tax (GST) rate of around 1 percent. Meanwhile, a Hybrid Vehicle is generally taxed between 8 and 8.5 percent, depending on engine size. Under the proposed plan, EVs could be moved to the standard 18 percent GST category. Hybrid models may also face an 18 percent GST rate, while some larger-engine variants could be taxed at rates as high as 25 percent.
The proposed tax revisions are part of government efforts to simplify the tax structure, reduce exemptions, and increase revenue collection amid economic challenges.
If implemented, consumers could see substantial price increases. Industry estimates suggest that a vehicle currently priced at Rs8 million could become more than Rs1 million more expensive after the new taxes and duties are applied.
Several popular hybrid models may witness notable price hikes. The Toyota Corolla Cross 1.8 HEV, currently priced between Rs8.53 million and Rs8.56 million, could rise to approximately Rs9.28 million. The top-end Corolla Cross HEV X may reach around Rs9.71 million.
Similarly, the Haval Jolion HEV could increase to over Rs10.1 million, while the Haval H6 HEV may approach Rs12.8 million. The Hyundai Tucson Hybrid AWD is expected to exceed Rs13.3 million if the proposed taxes are approved.
The electric vehicle segment could also be affected. The JMEV EV3 Comfort variant may rise from Rs4.9 million to around Rs5.72 million. The BYD Atto 3 Advance could cross Rs10.5 million, while the MG ZS EV may exceed Rs11.3 million.
Premium EVs may see even larger increases. The BYD Seal Premium, currently priced at Rs16.99 million, could approach Rs19.85 million. The BYD Sealion 7 may rise above Rs18 million.
Experts believe the higher taxes could slow the adoption of EVs and hybrid vehicles in Pakistan. In recent years, these vehicles have gained popularity due to lower fuel expenses and reduced maintenance costs.
The growing interest in every Hybrid Vehicle and EV model has been driven by rising petrol and diesel prices. However, higher taxation could affect consumer affordability and purchasing decisions.
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Industry observers say the future of the EV and Hybrid Vehicle market will depend on the final decisions announced in the upcoming federal budget. Until then, buyers and manufacturers remain focused on the government’s evolving tax policy.
