The federal government has rolled out a sweeping new automobile policy aimed at making cars more affordable for Pakistan’s struggling middle class while accelerating the shift toward electric vehicles — a move that could reshape the country’s transport landscape and ease its crippling oil import burden.
Information Minister Attaullah Tarar and Prime Minister’s Adviser on Industries Haroon Akhtar Khan unveiled the policy at a joint press conference in Islamabad on Friday, promising lower vehicle prices, cleaner energy, and a long-overdue shake-up of Pakistan’s protected auto industry.
At the heart of the policy is a sharp reduction in import duties on vehicle components, designed to bring down manufacturing costs and make locally assembled cars — particularly those under 1300cc — more accessible to ordinary Pakistanis. The government is betting that increased competition and lower barriers will force automakers to innovate and offer better value, ending decades of what officials described as a complacent, monopoly-like market.
“For years, we kept duties high to protect local manufacturers,” Tarar said. “But despite all that protection, the industry failed to deliver the innovation and quality that consumers in other countries enjoy. That changes now.”
The policy places special emphasis on electric vehicles, which the government sees as critical to reducing Pakistan’s ballooning oil import bill — a major driver of inflation and fiscal strain. Customs duties on EV charging station equipment have been eliminated, and sales tax on such infrastructure has been slashed to encourage private investment in the charging network.
Tarar pointed to the growing use of electric scooters and motorcycles, especially among young women commuting to schools and workplaces, as proof that Pakistanis are ready for the transition. He likened the policy to the country’s recent solar energy boom, calling it a “revolutionary step” that could deliver similar economic and environmental benefits.
“Just as solar power transformed our energy landscape, this policy will transform how Pakistanis move,” he said. “Lower oil imports mean more money for health, education, and infrastructure.”
Haroon Akhtar outlined six core pillars of the policy: affordability, export promotion, electric vehicle adoption, increased localization of parts, improved safety standards, and greater transparency in the sector. He stressed that Prime Minister Shehbaz Sharif personally directed officials to prioritize the needs of middle and lower-middle-income families.
Crucially, the policy leaves existing incentives for petrol-powered vehicles under 800cc untouched, ensuring that the most budget-conscious buyers are not disrupted.
The government is also inviting global EV manufacturers to set up production facilities in Pakistan, with the promise of a large domestic market and export potential. Officials hope the policy will create jobs, boost industrial output, and position Pakistan as a regional hub for electric vehicle manufacturing.
But questions remain. Critics have long accused Pakistan’s auto sector of underperforming despite heavy protection, and skeptics wonder whether lower duties alone will be enough to break entrenched habits. The success of the policy may hinge on whether new players actually enter the market — and whether existing manufacturers respond with genuine innovation rather than cosmetic changes.
Still, for millions of Pakistanis squeezed by inflation and rising fuel costs, the promise of cheaper, cleaner cars is a welcome development. Whether that promise becomes reality will depend on execution, competition, and the willingness of both government and industry to follow through.
