The federal government has proposed significant reductions in duties and taxes on hybrid vehicles under the draft of the new Auto Policy 2026–31, according to official documents and sources.
The final draft of the new auto policy has been presented to Prime Minister Shehbaz Sharif for consideration. The proposed policy will remain in effect from 2026 to 2031.
Under the draft, the government has proposed a phased reduction in duties on imported hybrid vehicles over the next five years.
For hybrid vehicles with engine capacities above 1,800cc, taxes on imports are proposed to be reduced by 20% over the next five years. Meanwhile, the duty on hybrid vehicles above 1,801cc could be gradually reduced from 50% to 30%.
For hybrid vehicles with engine capacities between 1,501cc and 1,800cc, the draft proposes a phased reduction in duties over five years, with the rate potentially falling from 50% to 30%.
Similarly, the duty on hybrid vehicles with engine capacities between 851cc and 1,000cc is proposed to be reduced gradually from 50% to 30% over five years.
