Pakistan has proposed a new set of tax and duty measures for electric vehicles in the 2026-27 budget, offering relief for lower-priced imported electric cars while keeping duties on expensive EVs and pushing companies toward local assembly.
The most important change is in the federal excise duty, not customs duty. Electric cars, electric SUVs, and electric pickup vehicles imported for personal use in CBU condition will face 0% FED if their import value, including customs duty, does not exceed Rs. 20 million.
The FED will rise sharply for more expensive EVs. Imported electric cars, SUVs and pickups valued above Rs. 20 million and up to Rs. 30 million will face 30% FED, while vehicles valued above Rs. 30 million will face 40% FED.
| Imported Electric Cars/SUVs/Pickups | Proposed FED |
| Up to Rs. 20 million | 0% |
| Above Rs. 20 million and up to Rs. 30 million | 30% |
| Above Rs. 30 million | 40% |
This means EV imports have not been made completely duty-free. The 0% rate applies to FED for cheaper personal-use CBU EVs. Customs duty and other applicable charges may still apply.
On the customs side, the Finance Bill extends the concession for imported electric four-wheelers, excluding vehicles valued above US$50,000. These vehicles will remain subject to 25% customs duty till June 30, 2027.
Manufacturers also get a separate concession. Companies will be allowed to import up to 100 CBU units of the same electric four-wheeler variant at 50% of the applicable customs duty rate, if the vehicle is to be assembled or manufactured locally and is approved by the Engineering Development Board. If the applicable rate is 25%, the concessional rate would effectively be 12.5%.
| EV Import Category | Customs Duty Treatment |
| Electric four-wheelers, excluding value above US$50,000 | 25% till June 30, 2027 |
| Up to 100 CBU units for approved local assembly | 50% of the applicable customs duty rate |
| EV-specific CKD parts for electric four-wheelers, electric vans and light electric trucks | 1% |
| Non-localized CKD parts for electric four-wheelers | 10% |
| Localized CKD parts for electric four-wheelers | 25% |
The clearest benefit is for local assembly. EV-specific components for electric four-wheelers, electric vans and light electric trucks will attract 1% customs duty when imported in CKD form for assembly or manufacturing. Non-localized CKD parts will face 10% duty, while localized CKD parts will face 25% duty.
These concessions will remain available till June 30, 2027 and will be subject to certification and quota approval by the Engineering Development Board.
Electric bikes also get targeted support. EV-specific CKD components for electric motorcycles, including electric motors, battery chargers, switches, junction boxes, controllers, converters and batteries other than lead-acid batteries, will be charged 1% customs duty.
For electric motorcycles, non-localized CKD parts will face 15% customs duty. Localized CKD parts will face 15% customs duty plus additional customs duty. These concessions will also require EDB certification and quota approval and will remain available till June 30, 2027.
| Electric Motorcycle Category | Customs Duty Treatment |
| EV-specific CKD components | 1% |
| Non-localized CKD parts | 15% |
| Localized CKD parts | 15% plus additional customs duty |
The budget speech also refers to the Pakistan Accelerated Vehicle Electrification programme, or PAVE, under which subsidised financing will be provided for electric motorcycles and electric rickshaws. This is aimed at making electric two- and three-wheelers easier to buy for ordinary consumers.
For electric rickshaws and three-wheeler electric loaders, EV-specific CKD components will also be charged 1% customs duty. Non-localized parts will face 15%, while localized parts will face 15% plus additional customs duty.
The Finance Bill also keeps relief for larger electric vehicles. Electric buses, electric trucks and electric prime movers will face 1% customs duty in CBU condition. EV transport buses with 25 seats or more and electric trucks in CBU condition will also be subject to 1% sales tax.
Other support is aimed at manufacturers. Plant and machinery specifically designed for EV manufacturing will be allowed at 0% customs duty on a one-time basis for setting up new EV assembly or manufacturing facilities or expanding existing units. Inputs used by vendors and OEMs for manufacturing EV-specific parts will also be allowed at 0% customs duty, subject to approval.