Pakistan's federal government plans to release a new auto policy in August 2026 that includes incentives for electric, plug-in hybrid, and hybrid vehicles. The policy aims to attract investment, expand local manufacturing, and introduce international safety standards for vehicles assembled in the country. A carbon tax on petrol and hybrid vehicles is also under consideration, though final tax details will be worked out with the IMF. If implemented, the EV incentives could help reduce transport emissions in Pakistan, a sector that contributes significantly to urban air pollution and carbon output. The proposed carbon tax would add a price on emissions from conventional vehicles, potentially shifting consumer demand toward cleaner options. The policy's success will depend on how quickly charging infrastructure is built and whether the tax structure is strong enough to change buying behavior without stalling the auto market.
