Hybrid car buyers in Pakistan have received major price relief after Hyundai reduced the prices of five hybrid variants by up to Rs1.403 million. The reductions came after the Federal Board of Revenue (FBR) lowered the sales tax on eligible locally assembled hybrid vehicles.
The revised sales tax rate applies to locally assembled hybrid vehicles with engine capacities of up to 2,000cc. The rate was reduced from 25% to 18%, effective September 13, 2026. Hyundai has now passed on a significant portion of the tax relief to customers through price cuts across its Elantra, Tucson and Santa Fe hybrid lineups.
The biggest reduction has been announced for the Santa Fe Signature. Its price has dropped by Rs1.403 million, falling from Rs16.123 million to Rs14.720 million. The Santa Fe Smart has also received a major reduction of Rs1.316 million. Its price has decreased from Rs14.574 million to Rs13.258 million.
Hyundai has also reduced the prices of its Tucson Hybrid variants. The Tucson Hybrid Signature is now available for Rs13.300 million, compared with its previous price of Rs14.101 million. This represents a reduction of Rs801,000.
The Tucson Hybrid Smart has become Rs724,000 cheaper. Its price has declined from Rs12.926 million to Rs12.202 million. Meanwhile, the Elantra Hybrid has received a price cut of Rs639,000, bringing its price down to Rs10.761 million from Rs11.400 million.
The reductions come as the government’s revised tax policy begins to affect Pakistan’s hybrid vehicle market. Lower sales tax could make hybrid cars more affordable for consumers and may encourage greater interest in fuel-efficient vehicles.
The FBR decision is expected to benefit several locally assembled hybrid models in Pakistan. These include the Toyota Corolla Cross, Haval H6, Haval Jolion, Hyundai Elantra Hybrid, Kia Sportage L HEV, Honda HR-V e, MG HS and Jaecoo J7 PHEV, provided they meet the applicable conditions.
However, the tax relief does not apply to every hybrid vehicle. The reduced 18% rate is limited to qualifying locally assembled vehicles with engine capacities of up to 2,000cc. Hybrid vehicles with larger engines and completely built-up imported units will not receive the same tax benefit.
The latest development follows a period of uncertainty in Pakistan’s hybrid car taxation policy. An earlier concessional sales tax rate of 8.5% was withdrawn, resulting in the applicable rate rising to 25%. This increase placed additional pressure on vehicle prices and made several hybrid models more expensive.
The new 18% rate partially reverses that increase. However, the amount of relief passed on to buyers depends on individual manufacturers. Automakers are not required to reduce prices by exactly the same amount as the tax saving.
Hyundai’s latest price list provides a clear example of the impact of the revised policy. Its hybrid models have received price reductions ranging from Rs639,000 to Rs1.403 million, offering significant savings to customers considering a new vehicle.
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