Pakistan’s proposed Auto Policy 2026–31, designed to accelerate the adoption of electric vehicles (EVs), has reportedly been shelved after local car manufacturers raised objections, forcing the government to restart the policy-making process.

The Ministry of Industries and Production had prepared a new auto policy after consulting stakeholders, with a strong focus on promoting electric mobility to reduce Pakistan’s heavy reliance on imported petroleum products. As a net importer, Pakistan currently imports around 80% of its petroleum requirements, making the shift towards EVs a key part of the government’s long-term energy strategy.

However, major automobile manufacturers reportedly expressed concerns that the draft policy gave electric vehicles significant advantages over conventional petrol and diesel vehicles. Following their objections, Prime Minister Shehbaz Sharif directed officials to review the proposal, and a new committee has now been tasked with preparing a revised policy.

The delay has already affected the auto industry. With the Auto Industry Development and Export Policy 2021–26 expiring on June 30, tax concessions on hybrid vehicles also ended. As a result, the general sales tax (GST) on hybrid and plug-in hybrid vehicles reverted from 8.5% to 25%, prompting several manufacturers, including Toyota and Honda, to increase hybrid vehicle prices by more than Rs1.3 million in some cases. Some companies also temporarily suspended vehicle invoicing and deliveries amid the uncertainty.

Industry representatives have urged the government to adopt a balanced transition towards electric mobility by supporting local manufacturing, technology transfer, and the development of EV charging infrastructure, while protecting existing investments and jobs in Pakistan’s automotive sector.