The Pakistan Association of Automotive Parts & Accessories Manufacturers (PAAPAM) has raised serious concerns over proposals in Pakistan’s upcoming Auto Policy 2026-31 that may extend fiscal and regulatory incentives to Plug-in Hybrid Electric Vehicles (PHEVs) and Range Extended Electric Vehicles (REEVs) on par with pure Battery Electric Vehicles (BEVs).
The association stated that PHEV and REEV technologies cannot be categorized as zero-emission vehicles as they continue to rely on internal combustion engines, fuel tanks and exhaust systems alongside electric powertrains. PAAPAM noted that many such vehicles contain up to 1500cc VVTi engines and continue to consume fossil fuels, making them fundamentally different from fully electric BEVs.
PAAPAM warned that reducing the sales tax rate on PHEV and REEV vehicles from 18 percent to 1 percent would result in substantial revenue losses for the Federal Board of Revenue (FBR) while offering limited environmental benefits compared to fully electric vehicles.
The association highlighted that major regional automotive manufacturing economies including Thailand, Malaysia and Indonesia maintain a clear distinction between pure Battery Electric Vehicles and transitional hybrid technologies such as PHEVs and REEVs. According to PAAPAM, these countries provide extensive fiscal incentives, industrial support and localization-linked benefits specifically for BEVs, while hybrid technologies continue to receive comparatively limited support as transitional solutions.