Govt Likely to Waive Toll Tax on Highways and Motorways for EVs and PHEVs

The federal government plans to provide toll exemptions on motorways and national highways for New Energy Vehicles (NEVs).

NEVs typically include vehicles powered by alternative energy sources, including full battery-electric vehicles (BEVs), plug-in hybrids (PHEVs), and fuel cell vehicles (FCEVs).

Sources told ProPakistani that this will be done to encourage electric mobility and clean energy adoption in Pakistan under the highly anticipated Auto Policy 2026–31.

Alongside these incentives, the government is moving toward a major restructuring of the country’s long-standing protectionist auto regime. Additional Customs Duties (ACD) will be fully phased out by FY2029, while Regulatory Duties (RD) will be reduced by 80 percent by FY2030.

All SRO-based concessions, which have historically shaped tariff protection in the sector, are also set to be abolished by FY2030.

The policy outlines a gradual reduction in import and assembly tariffs as well. Duties on Completely Built Unit (CBU) vehicles, currently in the 50 to 100 percent range, will be brought down to 35 to 75 percent over five years.

For Completely Knocked Down (CKD) units used in local assembly of cars, SUVs, and minivans, tariffs will decline from 30 percent to 20 percent over the same period.

The reforms target a reduction in the weighted average applied tariff to below 6 percent by FY30. The framework also links NEV incentives to localization requirements. This will help ensure benefits for electric vehicles under domestic manufacturing.