Toyota Indus Motor Company raises concerns over the classification of range-extended electric vehicles, while expecting the FBR to resolve the issue and ensure a level playing field for automakers.
Indus Motor Company, the assembler of Toyota vehicles in Pakistan, has raised concerns over the classification of range-extended electric vehicles (REEVs) by competing automakers, alleging that certain companies are presenting these vehicles under different categories to benefit from lower General Sales Tax (GST) rates.
The development was highlighted in key takeaways shared by Arif Habib Limited following Indus Motor Company’s 37th Annual General Meeting (AGM), held after the company announced its financial results for FY2026.
According to the analyst’s report, Indus Motor’s management believes that some competitors are misclassifying their REEV products to qualify for lower sales tax rates. The company expects the matter to be resolved soon, as the issue is currently under review by the Federal Board of Revenue (FBR).
REEV Classification Under Review by FBR
Range-extended electric vehicles combine an electric drivetrain with an onboard combustion engine that generates electricity to recharge the battery or support the electric powertrain. Unlike conventional hybrids, the engine in a REEV primarily serves as a generator rather than directly driving the wheels.
According to the automotive analysts, certain automakers are classifying their REEV models as hybrids to benefit from a lower applicable GST rate. The company expects the FBR’s review to address the classification issue and establish a more consistent tax framework for the automotive sector.
The outcome could have implications for automakers introducing electrified vehicles in Pakistan, particularly as manufacturers expand their hybrid and electric vehicle portfolios.
Indus Motor Plans Further Investment
During the AGM, management also outlined plans to invest in an expanded product range and introduce additional models. The company has indicated a capital expenditure commitment of approximately Rs4.5 billion over the next 12 months, compared with around Rs1 billion previously.
The planned investment will focus on product localization and expanding the company’s offerings in Pakistan.
Management also said that Toyota has access to major vehicle technologies globally. However, decisions regarding upcoming electric vehicle (EV) and plug-in hybrid electric vehicle (PHEV) launches will depend on the finalized government auto policy, which is expected to provide greater clarity on tariffs and incentives.
The company declined to disclose specific models or launch timelines until the policy is formally announced.