Pakistan's New Auto Policy Raises Export Targets for Vehicles and Parts
The draft auto policy lifts car export targets to 4% by 2026 and 20% by 2030, while auto‑parts export goals jump to 15%, and introduces tax incentives for electric vehicles and lower duties on conventional cars.
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How This Affects the Exchange
Sector Effect
Positive · Buy bias
Higher export targets and tax incentives boost Automobile and Auto Parts sectors; Buy bias on related tickers.
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Desk call: Buy bias · Positively affected
- AutomobilePositively affected
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Sectors: Automobile — Positive · Buy bias. PSX tickers: HUBC, GADI. Higher export targets and tax incentives boost Automobile and Auto Parts sectors; Buy bias on related tickers.
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Open on ProPakistani## Overview of the Draft Auto Policy
The government has released a draft Auto Policy aimed at boosting the automotive sector’s contribution to exports. The plan sets a new car‑export target of 4% of total exports in 2026, rising to 20% by 2030. For auto‑parts manufacturers, the export share target is increased from the current 5% to 15% within the same period.
## Linking Local Parts Makers to Global Supply Chains
To achieve these goals, the policy proposes the creation of an Auto Parts Export Council and a Duty and Tax Remission scheme for exporters. The council will facilitate connections between Pakistani parts producers and international OEM supply chains, providing a structured platform for market access.
## Incentives for Electric Vehicles (EVs)
The draft also focuses on accelerating EV adoption. It proposes full exemption from federal excise duty, capital value tax, and withholding tax for EVs, plug‑in hybrids, and range‑extended EVs. Customs duty on EV charging‑station equipment will be capped at 1%.
## Financing and Consumer Measures
Financing limits for EV purchases are to be raised to PKR 10 million, with loan tenures extended from three to five years. For conventional vehicles, customs duties could be cut by up to 80% over the next five years to make them more affordable.
## Consumer Protection and Performance Rules
New consumer‑protection rules will hold manufacturers accountable for price hikes after a booking and require a guaranteed delivery date at the time of booking. The policy also outlines six principles for manufacturers, attaching penalties for missed performance targets and incentives for those that meet or exceed them.
## Next Steps
The draft will be discussed with the International Monetary Fund through online consultations and will be reviewed during the upcoming economic review before final approval.