Latest News: Auto Policy 2026-31 Approved, What Changes for Car and EV Buyers
The federal government has finally approved the Auto Policy 2026-31, closing months of talks with carmakers, parts makers and other stakeholders. The new framework puts cheaper cars, electric vehicles and buyer protection at the centre of Pakistan’s auto sector for the next five years.
The policy was announced at a press conference in Islamabad on Saturday by Federal Information Minister Attaullah Tarar and Haroon Akhtar Khan, Adviser to the Prime Minister on Industries and Production. According to the government, Prime Minister Shehbaz Sharif was personally involved in shaping the final draft.
Auto Policy 2026-31 at a Glance: Six Key Pillars
Haroon Akhtar Khan said the new policy stands on six priorities. Here is a simple breakdown of each one:
| Policy Pillar | What It Aims For |
|---|---|
| Affordable vehicles | Lower prices for middle and lower-middle income families |
| Exports | More Pakistani-made vehicles sold abroad |
| Localisation | More parts made inside Pakistan |
| Vehicle safety | Stronger testing and certification standards |
| Electric vehicles | EVs kept as a core priority |
| Transparency | Booking amount capped at 20% of vehicle price |
Will Car Prices Come Down?
Affordability is the clearest goal of the Auto Policy 2026-31, especially for middle-class and lower-middle-class buyers. Earlier drafts talked about cutting import tariffs step by step and opening the market to more competition, with incentives tied to local manufacturing and exports.
However, the full tariff and tax schedule has not been made public yet. Until it is notified, no one can say exactly how much prices of petrol cars, hybrids, plug-in hybrids or EVs will change. Buyers planning a purchase should wait for the official notification before assuming a price cut.
What the New Auto Policy Means for Electric Vehicles
The government has confirmed that electric vehicles remain a core part of the new policy. This works alongside the separate National Electric Vehicle Policy 2025-30, which targets 30% EV share in new vehicle sales by 2030.
- Earlier drafts proposed lower tariffs for New Energy Vehicles (NEVs).
- Easier financing for EV buyers was also part of previous proposals.
- Final EV incentives will only be confirmed through official notifications.
For e-bike buyers, the existing PAVE Phase 2 scheme continues separately. You can also check the latest electric bike prices in Pakistan and EV prices in Pakistan while the new policy details are finalised.
Big Relief for Buyers: 20% Booking Amount Cap
Under the transparency pillar, automakers and assemblers should not take more than 20% of a vehicle’s total price as booking money. This is meant to stop companies from collecting heavy advance payments and then delaying deliveries. Full enforcement rules for this cap are still to be announced.
Localisation, Exports and Safety
Previous versions of the policy suggested export targets for car companies and stronger local value-addition rules, with incentives linked to performance. The final announcement keeps both exports and localisation as central goals.
On safety, earlier proposals included better testing, certification, third-party audits and wider use of international safety standards for both local and imported vehicles.
What Should Buyers Do Now?
- Do not rush into booking a car expecting an instant price drop.
- Never pay more than 20% of the vehicle price as booking amount.
- Wait for the official tariff and tax notification before comparing new prices.
- EV and e-bike buyers should follow official PAVE and EV policy updates.
Frequently Asked Questions
Has the Auto Policy 2026-31 been approved?
Yes. The federal government announced the approved Auto Policy 2026-31 at a press conference in Islamabad on Saturday, 7 November 2026.
Will car prices in Pakistan come down now?
Making cars cheaper is a main goal of the policy, but the final tariff and tax schedule has not been published yet, so the exact price impact on any model is still unknown.
What does the new auto policy say about electric vehicles?
Electric vehicles are one of the six pillars. EV-specific incentives will be confirmed through official notifications, while the National EV Policy 2025-30 targets a 30% EV share in new sales by 2030.
How much booking amount can a car company take?
Under the transparency pillar, automakers should not charge more than 20% of the vehicle price as booking amount.
Does the auto policy change the PAVE e-bike scheme?
No change to the PAVE scheme has been announced. Applicants should keep following official PAVE updates for registration and delivery.
Source: Federal government announcement (Islamabad press conference) as reported by PakWheels. This post will be updated when the official Auto Policy 2026-31 notification is released.
