The government has announced a reduction in the customs duty (CD) on the import of hybrid electric vehicles (HEVs) in the fiscal budget 2023-24, which is expected to lower the prices of hybrid cars in Pakistan.
According to the budget document, the CD on the import of HEVs in a completely built-up (CBU) form has been slashed to 1%, from the previous rate of 10%. This means that the importers of hybrid cars will have to pay less duty on bringing them into the country.
The CD on the import of completely knocked down (CKD) kits of HEVs has also been reduced to 4%, from the previous rate of 5%. The CD on the import of plugin hybrid electric vehicle (PHEV) CKDs has been reduced to 3%, from the previous rate of 5%. This means that the local assemblers of hybrid cars will have to pay less duty on importing the parts and components of hybrid cars.
The budget document also states that the CD on lithium-ion batteries, which are essential for powering EVs, has been reduced to 0%, from the previous rate of 1%. This means that the importers and assemblers of hybrid cars will have to pay no duty on importing the batteries, which are costly and complex.
The reduction in CD for hybrid cars and batteries is likely to have a positive impact on the hybrid car segment in Pakistan, which currently has limited options and high prices. The lower duty rates may encourage more importers and assemblers to invest in this segment and offer more choices and affordability to the buyers.
The government has taken this step to promote the use of environment-friendly and fuel-efficient vehicles in the country, which can help reduce pollution and greenhouse gas emissions. The government has also expressed its commitment to implement the National Electric Vehicle Policy, which aims to increase the share of EVs in the transport sector.