Pakistan’s hybrid vehicle market gets price relief as Honda and Toyota pass on savings
ISLAMABAD: Hybrid electric vehicle (HEV) buyers in Pakistan have started receiving price relief after major automakers reduced prices following the government’s decision to lower the sales tax on eligible locally manufactured hybrid vehicles.
The government reduced the sales tax on locally manufactured HEVs with engine capacities of up to 2,000cc from 25% to 18%, effective Sept. 13, 2026. The change followed the expiry of earlier tax concessions on June 30 and has now prompted automakers to revise prices.
Honda Atlas Cars Ltd. has reduced the price of its HR-V e from Rs10.369 million to Rs9.299 million, a reduction of Rs1.07 million. The company said the revised prices are available for limited stock and apply to orders invoiced on or after Sept. 25.
Honda has also reduced the price of the HR-V VTi-S from Rs7.799 million to Rs7.299 million, representing a reduction of Rs500,000. The company’s revised prices are subject to the stated limited-stock and limited-period conditions.
Indus Motor Company has also reduced prices for its Toyota Corolla Cross hybrid variants. The Corolla Cross HEV X is now priced at Rs9.729 million after a Rs570,000 reduction, while the Corolla Cross HEV is available for Rs9.299 million following a Rs550,000 cut.
The latest reductions follow a sharp increase in hybrid vehicle prices after the expiry of earlier tax concessions. The Corolla Cross HEV X, for example, had risen from Rs8.935 million to Rs10.299 million after the sales tax increased from 8.5% to 25% in July. Its latest price remains higher than the pre-July level despite the new reduction.
The tax change is part of a broader period of uncertainty for Pakistan’s automotive industry following the expiry of the Automotive Development Policy 2021-26 on June 30. The government is also working on the framework for its next automotive policy, while manufacturers have been adjusting prices in response to changes in taxes and duties.
Industry representatives have said the 25% sales tax had contributed to weaker demand as consumers delayed purchases while waiting for clarity on government policy. The reduction to 18% is expected to ease some of that pressure, although the impact on overall sales will depend on pricing decisions by manufacturers and broader market conditions.
For prospective buyers, the latest price revisions provide immediate relief on several locally manufactured hybrid models. However, buyers should confirm the applicable price, stock availability and invoice conditions with the relevant authorized dealer before booking.
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