Muhammad Faisal Kaleem

The Pakistani government has decided to relax customs duty on new energy vehicles (NEVs) to make environmentally friendly transport more affordable for consumers. Under Pakistan's New Energy Vehicle Policy 2025-30, the Ministry of Industries and Production (MoI&P) will provide 1% incentivized customs duty on NEV specific parts to auto parts manufacturers in the country, according to a document available with Wealth Pakistan.

The policy provides a comprehensive national framework to transition Pakistan’s transport sector toward environmentally sustainable, energy efficient and technologically advanced mobility. “A policy roadmap for the local assembly/manufacturing of NEV vehicles and parts across 2-3 wheelers, cars, light commercial vehicles and buses is being readied,” mentions the document.

A senior official at the Industrial Infrastructure Section of the MoI&P said that the decision would help boost the auto manufacturing industry in the country. Wishing anonymity, he said, “The roadmap will focus on technology transfer, investment incentives, job creation, localization targets, supply chain development and long-term sustainability of the domestic automotive industry.”

He said the energy vehicle policy aims to minimize carbon emissions, reduce the foreign exchange spent on the import of oil, enhance the productive use of surplus electricity, establish a competitive local NEV manufacturing ecosystem, and create jobs.

The official explained that the strategy also aligns with Pakistan’s broader climate commitments and its efforts to access major international climate financing facilities. “By promoting NEVs, the government expects to strengthen its case for securing funds from global climate mechanisms aimed at reducing emissions and supporting green transitions in developing countries,” the official said.

According to experts, the initiative is also expected to encourage public-private partnerships and attract foreign direct investment in clean mobility solutions. Moreover, the provincial governments are likely to be engaged to ensure effective implementation through supportive regulations, charging infrastructure development and consumer awareness campaigns.

The gradual adoption of NEVs will help reduce urban air pollution and improve public health outcomes. The policy further envisages phased targets and periodic reviews to address market challenges and technological gaps. Industry stakeholders have welcomed the move, terming it a positive signal for long-term policy continuity, which is essential for building investor confidence and accelerating Pakistan’s shift toward a low-carbon and climate-resilient transport system.

Credit: INP-WealthPk