Government moves to support EV manufacturing and control production costs
ISLAMABAD, June 12, 2026 — Pakistan extends CKD kit tax exemption for electric vehicles until June 30, 2027 under the Budget 2026–27, in a move aimed at supporting local EV assembly and maintaining investment momentum in the sector.
The extension was announced on Friday as several existing tax concessions for electric vehicle manufacturers were set to expire at the end of June 2026.
Support for Local EV Assembly
Under the revised policy, the exemption applies to Completely Knocked Down (CKD) kits used in the local assembly of electric vehicles.
The relief covers small cars and SUVs with battery capacities of up to 50 kWh, ensuring continued support for the most commonly assembled electric vehicle categories in Pakistan.
Light commercial vehicles with battery capacities of up to 150 kWh are also included, expanding coverage for manufacturers operating in the country’s growing EV segment.
CKD Kits Key to Local Manufacturing
CKD kits are imported in dismantled form and assembled locally, allowing manufacturers to reduce production costs compared with fully built imported vehicles.
Industry participants say the exemption plays a critical role in maintaining price competitiveness and encouraging domestic assembly operations.
Preventing Cost Pressures on Industry
Officials said the extension is intended to prevent a sharp rise in production costs that local EV assemblers would have faced if the exemption had expired.
The policy is expected to provide stability for manufacturers and support ongoing investment in Pakistan’s electric mobility ecosystem.
Part of Broader EV Policy Push
The measure forms part of the government’s wider strategy to promote electric vehicle adoption, reduce reliance on fossil fuels, and strengthen local manufacturing capacity.
Industry stakeholders have welcomed the decision, saying policy continuity is essential for sustaining long-term investment in the EV sector and supporting its gradual expansion in Pakistan.
