Budget 2026-27: EV Parts and CKD Imports Continue to Receive Tax Relief

While much of the budget debate has focused on potential tax changes for electric vehicles, official documents suggest that EV assembly remains a policy priority.

The government continues to provide customs duty concessions worth nearly Rs. 24 billion on CKD and EV-specific parts. The concessions are designed to support local assembly and reduce the cost of importing critical EV components.

Combined with the recently announced Pakistan Accelerated Vehicle Electrification (PAVE) initiative, the figures suggest that policymakers continue to view electrification as an important long-term objective.

The Key Takeaways

• Rs. 23.86 Billion in Concessions: Allocated for importing completely knocked-down (CKD) kits and EV components such as local battery packs of up to 50kWh to shield local assembly from high costs.
• No New Tax Shocks: Tax rates on local eco-friendly passenger vehicles remain unchanged, preventing immediate price hikes.
• Commercial EV Push: A low 1% tax on imported electric trucks signals a long-term plan to green the logistics and freight sector.

Manufacturing Over Importing

The clear focus of Budget 2026-27 is shifting Pakistan from a trading hub to a manufacturing ecosystem. True electric mobility cannot survive on expensive finished imports (CBUs). By keeping CKD incentives intact, the state is pushing for the domestic production of:

• Electric cars, SUVs, and bikes
• Local battery packs up to 50 kWh
• Charging infrastructure components

Why It Matters

The Measure	The Impact
Policy Continuity	Gives automakers the confidence to invest in local assembly lines and vendor training ahead of the Auto Policy 2026-31.
Targeted Subsidies	Reduces the cost of high-tech imports, keeping locally assembled EVs more competitive against traditional fuel cars.
Market Stability	Protects consumers from sudden, policy-driven price jumps, keeping buyer interest alive.

The Bottom Line

Budget 2026-27 successfully balances immediate revenue needs with long-term green goals. While the upcoming Auto Policy 2026-31 will outline the final roadmap, this budget sends a powerful signal: domestic EV manufacturing remains a strategic national priority.

The exact implementation and final impact will become clearer after the final Finance Bill, FBR notifications, and the upcoming Auto Policy 2026-31 are announced.