IMF Clears Auto Policy 2026-31: What It Means for EV Buyers

By ChargePK · 12 November 2026 · 5 min read · ChargePK Blog

The IMF has raised no objection to Pakistan’s Autos and Auto Parts Manufacturing Policy 2026-31, The Express Tribune and ProPakistani reported on 12 November 2026, citing government sources. Prime Minister Shehbaz Sharif has approved the final draft. It now goes to the federal cabinet, then to Parliament as a money bill, effectively a mini-budget.

No tax or duty has changed yet. The IMF has not issued a statement of its own, and neither report says whether its sign-off covers the 1 percent sales tax on electric cars that the government announced on 7 November, the point the two sides fought over in October. What the reports do add is the fine print on cheaper imported EVs and the local manufacturing rules every carmaker will have to meet.

Auto Policy 2026-31 at a glance

Did the IMF approve the auto policy?

In effect yes, on the government’s account. The Express Tribune reported that the policy draft was shared with the IMF, which raised no objection, and ProPakistani called it IMF clearance. Neither names an IMF official or document, and the Fund has not commented publicly.

It matters because the IMF was the hold up. Talks stalled in October when the Fund pushed for the full 18 percent sales tax on electric cars instead of the concessional 1 percent. The government turned that down and kept 1 percent in the version it announced on 7 November, subject to IMF approval. The new reports confirm the draft has cleared but do not list the sales tax rates in it, so treat 1, 6 and 9 percent as announced rather than final until the money bill is published. Our analysis of those rates shows what each would mean car by car.

The 5 percent duty on EVs up to USD 15,000, and the catch

The concession that matters most to EV buyers is for smaller, cheaper battery electric cars. Imported BEVs valued at up to USD 15,000 will pay 5 percent customs duty for the first two years. It was in the October draft, went unmentioned at the 7 November press conference, and is in the final draft. It is not open to every importer. To qualify, a company has to:

• set up assembly or manufacturing facilities in Pakistan;
• lodge a surety bond and an irrevocable bank guarantee covering the duty it saves;
• start commercial production of the same model in Pakistan by 30 September 2028.

Miss the deadline and the bank guarantee is cashed. In plain terms, the cut is a bridge for brands that commit to building here: they can sell imported cars at a low duty while the plant is set up, then switch to local production. Individual importers get nothing from it. The USD 15,000 limit applies to the declared import value, not the showroom price, which also carries other taxes. The cheapest EVs on sale now are on our electric cars under Rs 50 lakh list.

Local production rules for carmakers

Most of the policy is aimed at the assembly lines. Existing carmakers must raise local content by 2 percent a year, 8 percent over the policy period, and those already at 50 to 65 percent cannot go backwards. By 2030-31 the floors are 40 percent for petrol cars and SUVs and 45 percent for light commercial vehicles. For new energy vehicles they are 25 percent for cars and SUVs and 30 percent for motorcycles and rickshaws.

A maker that misses its local content target pays 3 extra percentage points of customs duty on non-localised assembly kits the following year. Shortfalls also carry penalties of 1 to 3 percent of annual factory gate sales, and two consecutive years of failure can cost a maker its manufacturing certificate. Carmakers that do not sign performance agreements with the Engineering Development Board lose concessional tariffs on imported parts altogether.

For buyers the direction is clear: more electrified cars assembled in Pakistan, as BYD is starting with the Sealion 6 plug-in hybrid and Jaecoo with the J5 EV. The 25 percent floor for electric cars is a lower bar than the 40 percent set for petrol cars.

When do the new auto policy rates take effect?

Not yet, and no date has been given. Three steps remain:

1. The federal cabinet approves the policy.
2. Parliament passes the money bill carrying the tax and duty changes.
3. The new rates are notified, and the State Bank issues rules for the larger EV loans announced on 7 November.

Until then, today’s taxes apply. Battery EVs already pay 1 percent sales tax, so their price does not hinge on the timing. Plug-in hybrids stand to get cheaper when 9 percent replaces the 18 to 25 percent they pay now, and range extenders dearer as they move from about 1 to 6 percent. If you are choosing between them, the day the money bill passes is the one to watch. We will update every car page when it does.

What it means for EV charging

Neither report revisits charging, so the 7 November terms stand: no customs duty on charging station equipment and 1 percent sales tax on charging machinery. That cuts the largest cost of opening a station. The network it lands on is still thin. The ChargePK map lists 178 public charging stations today, against a government target of 3,000 by 2030. If you are planning one, our guide to the NEECA process covers the paperwork.

Sources: The Express Tribune and ProPakistani, both 12 November 2026, and Profit, the same day. Earlier figures are from the 7 November announcement.

Frequently asked questions