Govt Proposes 1% NEV Levy on Petrol Cars in Budget 2025–26
In the 2025–26 federal budget, the government has introduced a new 1% NEV (New Energy Vehicle) Adoption Levy, targeting petrol-powered vehicles with engine capacities between 660cc and 1300cc. This initiative aims to raise funds for the development of electric vehicle (EV) infrastructure and encourage a gradual transition away from internal combustion engine (ICE) vehicles.
Slight Price Hikes for Popular Models
The 1% levy will be applied to the ex-factory prices of eligible vehicles, leading to minor—but noticeable—increases in prices for several commonly purchased cars in Pakistan. Below are the updated prices based on the proposed levy:
| Vehicle Model | Current Price (₨) | Expected Price (₨) |
|---|---|---|
| Suzuki Alto VXR | 2,827,000 | 2,855,270 |
| Suzuki Alto VXR AGS | 2,989,000 | 3,018,890 |
| Suzuki Alto VXL AGS | 3,140,000 | 3,171,400 |
| Suzuki Cultus VXR | 4,230,000 | 4,272,300 |
| Suzuki Cultus VXL | 4,316,000 | 4,359,160 |
| Suzuki Cultus AGS | 4,618,000 | 4,664,180 |
| KIA Picanto 1.0 AT | 3,940,000 | 3,979,400 |
| Honda City 1.2L M/T | 4,649,000 | 4,695,490 |
| Honda City 1.2L CVT | 4,689,000 | 4,735,890 |
| Peugeot 2008 Active | 6,600,000 | 6,666,000 |
| Peugeot 2008 Allure | 7,250,000 | 7,322,500 |
Green Transition Goals
Government officials describe the levy as a strategic move to support EV adoption and environmental sustainability. By imposing a small tax on ICE vehicles, the goal is to both discourage fuel dependency and generate resources to invest in EV infrastructure development—such as charging stations and related facilities.
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While the impact on car prices is relatively mild, the NEV levy marks a shift in policy direction toward a cleaner, more sustainable automotive future in Pakistan.
