To encourage electric transport, the administration has introduced an Energy Vehicle Adoption Levy on both domestically produced and imported combustion engine cars under the Financial Bill 2025-26.
According to the Federal Board of Revenue (FBR), the newly proposed Energy Vehicle Adoption Tax aims to deter the use of conventional fuel-driven vehicles and promote a transition to electric vehicles, which includes electric bikes and rickshaws. Under the suggested guidelines, manufacturers of combustion engine vehicles with engine sizes below 1300cc will incur a charge of one percent of the invoice amount, inclusive of duties and taxes.
Read more: Pakistan to target 30% EVs by 2030 with the new national electric vehicle policy
Levy is set at 3% for vehicles with an engine capacity exceeding 1,800cc
A similar rate applies to imported vehicles that fall under 1300 cc, calculated on the assessed value. For vehicles with engine sizes varying from 1,300 to 1,800 cubic centimeters, the tax rises to 2%. For those exceeding 1,800 cubic centimeters, the tax is set at 3%. Besides passenger cars, the new tax will also encompass buses and trucks with combustion engines.
Importers will pay the same percentage on the assessed value of the imported vehicle, while manufacturers of these vehicles will be required to pay a tax of 1% on the invoice amount. This initiative intends to lessen the nation’s dependency on conventional vehicles by making electric options more appealing through the establishment of these taxes, which will be implemented by the Federal Board of Revenue (FBR).
Government has set an ambitious goal: ensuring that over 30% of all new cars bought in Pakistan by 2030 are electric powered.
National electric vehicle policy proposes huge financial incentives:
• Rs. 50,000 subsidies for every electric motorcycle
• Rs. 200,000 subsidies for every electric-powered 3-wheeler (rickshaw)
• A total allocation of Rs. 4 billion has been set aside for these subsidies.
The policy also consists of incentives and infrastructure support for setting up electric-powered automobile charging stations throughout the country.