The federal government’s 2025–26 budget has jolted Pakistan’s auto industry with a proposed increase in GST on hybrid vehicles from 8.5% to 18%. This drastic tax increase will push prices of popular hybrid models up by over Rs 1.4 million, making eco-friendly vehicles significantly less affordable for consumers.
Why Are Hybrid Cars Getting More Expensive?
Previously, hybrid vehicles enjoyed a reduced GST rate of 8.5% to encourage fuel-efficient and low-emission transportation1. However, the new budget introduces a uniform 18% GST on all vehicles—petrol, diesel, and hybrids—removing the tax incentive previously offered for eco-friendlier options.
Also read this Budget 2025-2026 Here’s the detail!
Expected Price Hikes on Popular Hybrid Models
| Model | Old Price (8.5% GST) | New Price (18% GST) | Increase |
|---|---|---|---|
| Kia Sorento 1.6T HEV AWD | ₨ 15,999,000 | ₨ 17,399,834 | ₨ 1,400,834 |
| Hyundai Santa Fe Signature | ₨ 13,899,000 | ₨ 15,115,963 | ₨ 1,216,963 |
| Haval H6 HEV 1.5L | ₨ 11,749,000 | ₨ 12,777,714 | ₨ 1,028,714 |
| Toyota Corolla Cross HEV X | ₨ 9,449,000 | ₨ 10,276,332 | ₨ 827,332 |
These price surges could deter buyers from choosing hybrids, pushing them back toward conventional petrol or diesel vehicles.
Industry Backlash: Will This Hurt Green Mobility?
Automakers and environmental advocates have strongly criticized the move, arguing that it will:
- Slow Pakistan’s shift toward sustainable transport
- Increase reliance on fossil fuels, worsening pollution and fuel imports
- Make hybrids a luxury, pricing out middle-class buyers
Experts caution that although the government intends to increase tax revenue, this policy could have unintended consequences by deterring the adoption of cleaner vehicles.
What’s Next for Hybrid Cars in Pakistan?
With the new GST structure, hybrid cars—once seen as a bridge to full electrification—may become unaffordable for most consumers. If the policy goes into effect, potential outcomes may include:
- Declining hybrid sales, as buyers opt for cheaper petrol/diesel alternatives
- Delayed EV transition, since hybrids help prepare the market for electric mobility
- Increased air pollution, as fewer eco-friendly vehicles hit the roads
Final Thoughts: A Step Back for Green Mobility?
While tax reforms are necessary, penalizing hybrid vehicles contradicts global trends where countries incentivize low-emission transport. If Pakistan wants to reduce pollution and fuel dependency, it should reconsider this budget bombshell before it derails progress toward sustainable mobility.
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