IMF Clears Pakistan Auto Policy 2026-31: 5% Duty on EVs Under $15,000
The IMF has raised no objection to Pakistan's Auto Policy 2026-31 and PM Shehbaz Sharif has approved it. It offers 5% duty on EVs up to $15,000 for local assemblers and targets $6bn exports; cabinet and a money bill come next.
By Saad Nadeem · Published 12 Nov 2026 · 4 min read
Pakistan's new Autos and Auto Parts Manufacturing Policy 2026-31 has cleared its biggest hurdle. According to reports published on 12 November 2026, the IMF raised no objection to the draft and Prime Minister Shehbaz Sharif has approved it. The federal cabinet still has to sign off, after which a money bill (described as a "mini-budget") goes to Parliament.
The policy's headline items: a 5% customs duty on imported battery electric cars worth up to $15,000 for the first two years (only for companies that set up local assembly), higher local-content targets for every car and bike maker, and an export target of about $6 billion over five years.
What happened, step by step
Earlier this month the policy was still stuck. When we reported on 7 November, it had not been finalised and was waiting on IMF review. The latest reports say:
- The draft was shared with the IMF, which raised no objection.
- PM Shehbaz Sharif approved the policy.
- Next: federal cabinet approval, then a money bill in Parliament to put the tax and duty changes into law.
- A mid-term review is planned in 2028, with corrective action if targets slip.
Until the money bill passes, nothing changes at the showroom. Current prices and duties stay as they are.
Key numbers in the policy
| Item | What the policy says |
|---|---|
| Policy period | 2026-31 (five years) |
| Export target | About $6.01 billion cumulative ($3.29bn parts makers, $2.72bn vehicle makers) |
| Export support | 5% of net FOB export value, plus 10% extra on qualifying additional exports |
| Imported BEVs up to $15,000 | 5% customs duty for the first two years, tied to local assembly |
| Deadline to start local BEV production | 30 September 2028, or bank guarantees are cashed |
| Penalty for missing targets | 1% to 3% of annual factory-gate sales |
| Vendor support fund | Rs 2.1 billion (run through EDB and SMEDA) |
| Mid-term review | 2028 |
Local-content (localisation) targets by 2030-31
Every manufacturer has to make more of its vehicles in Pakistan. Existing makers must raise local content by about 2 percentage points each year and cannot go below their current level.
| Vehicle type | Minimum local content by 2030-31 |
|---|---|
| Petrol/diesel cars and SUVs | 40% |
| Light commercial vehicles (pickups, vans) | 45% |
| Motorcycles and rickshaws | 90% |
| Tractors | 80% |
| New energy cars and SUVs (EV/hybrid) | 25% |
| New energy motorcycles and rickshaws | 30% |
Makers that miss their NEV targets face an extra 3 percentage points of customs duty on non-localised kits the following year.
The cheap EV duty: who actually benefits?
The 5% duty on electric cars priced up to $15,000 sounds like a big cut, but it comes with strict conditions:
- It applies to companies, not individuals importing a single car.
- The importer must commit to local assembly or manufacturing of that EV and back it with a surety bond and bank guarantee.
- If local production doesn't start by 30 September 2028, the guarantees are cashed.
So the realistic effect is more small, locally assembled Chinese EVs over the next two to three years, which could push entry-level EV prices down. Any price drop you hear about before the money bill passes is speculation.
What it means for buyers in Quetta and Pakistan
- Don't delay a needed purchase. The policy is not law yet. Duty changes need the money bill, and makers usually take months to adjust prices.
- Small EVs are the ones to watch. If you're thinking about an electric car for city use in Quetta, expect more choice in the under-$15,000 class by 2027-28. Read our guide to EV charging costs at home vs station first.
- Bikes are mostly unaffected for now. Motorcycles already have very high local content, and the 90% target mainly locks that in.
- Used-car values: a policy that eventually lowers new-EV prices can soften resale values of older imported EVs and hybrids. If you plan to sell, you can list your car free and compare asking prices in used cars.
- Check today's showroom rates on our new car prices page, and before buying any used car in Balochistan, book a car inspection in Quetta.
Frequently asked questions
Has Pakistan's Auto Policy 2026-31 been finalised? Not completely. The IMF raised no objection and the Prime Minister approved it, but federal cabinet approval and a money bill in Parliament are still needed before the tax and duty changes take effect.
Will electric car prices fall immediately? No. The 5% duty on EVs up to $15,000 only applies to companies that commit to local assembly, and it needs the money bill first, so any price effect will come gradually.
What are the local-content targets for motorcycles? Motorcycles and rickshaws must reach 90% local content by 2030-31, while electric motorcycles and rickshaws have a 30% target.
When will the policy be reviewed? A mid-term review is planned for 2028, with corrective steps if targets are not being met.
Sources: Express Tribune (12 Nov 2026); The Asian Mirror (12 Nov 2026); ARY News (20 Oct 2026); PakWheels (reference)
#auto policy 2026-31#IMF#electric vehicles#customs duty#Pakistan auto industry
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