Pakistan Unveils New Auto Policy to Boost Localisation, EVs and Vehicle Safety
Haroon Akhtar Unveils Draft Auto Policy, Focuses on Localisation, Vehicle Safety and EV Promotion
New policy aims to boost local manufacturing, promote electric vehicles, improve road safety and curb excessive advance payments.
ISLAMABAD, November 7, 2026 : Adviser to the Prime Minister on Industries and Production Haroon Akhtar Khan on Saturday unveiled the final draft of Pakistan’s Automotive Industry Policy, aimed at boosting local manufacturing, improving vehicle safety standards and promoting electric vehicle (EV) adoption.
The announcement was made at a press conference alongside Federal Minister for Information and Broadcasting Attaullah Tarar. Haroon Akhtar said Prime Minister Shehbaz Sharif had approved the final draft, which would now be submitted to the Federal Cabinet for consideration.
He said the policy marked an important step towards addressing structural challenges in Pakistan’s automotive sector and transforming it into a competitive, export-oriented and locally integrated industry.
Focus on Local Manufacturing and Exports
Haroon Akhtar said Pakistan had introduced several automotive policies over the past decade but had failed to achieve the desired growth in exports.
He stressed that localisation remained one of the government’s top priorities, as it could generate employment, strengthen industrial development and promote economic self-reliance.
The government does not want the automotive industry to remain dependent on imported completely built units (CBUs) or limited to assembling completely knocked-down (CKD) kits.
Instead, manufacturers are being encouraged to increase local content, develop domestic vendor industries and strengthen Pakistan’s manufacturing ecosystem.
Vehicle Safety Standards to Improve
Highlighting consumer safety, the Adviser said inadequate safety standards, particularly in imported used vehicles, remained a serious concern.
He pointed to recurring road accidents involving defective brakes, tyre failures and inadequate safety features, including non-functional seat belts.
He said the new policy would place greater emphasis on ensuring the safety of vehicle users and passengers.
Government to Promote Electric Vehicles
The promotion of electric vehicles is another major priority under the policy.
Haroon Akhtar said Pakistan’s dependence on imported petroleum products made its economy vulnerable to fluctuations in international oil prices, increasing the import bill and putting pressure on the current account.
He said encouraging EV adoption would help reduce dependence on imported fuel, ease external economic pressures and support cleaner transportation.
He also recalled that Prime Minister Shehbaz Sharif had launched the National Electric Vehicle Policy last year, adding that progress on its implementation would also be shared.
Third-Party Audits and Consumer Protection
Emphasising transparency, the Adviser said the Prime Minister had directed that government schemes and initiatives should ensure accountability and public confidence.
He highlighted the inclusion of third-party audits as an important feature of the new automotive policy.
Regarding additional charges, commonly known as on-money, in vehicle bookings, Haroon Akhtar said the policy would make it mandatory for manufacturers not to demand advance payments exceeding 20 per cent of a vehicle’s price at the time of booking.
The measure aims to protect consumers against excessive advance payment demands and improve transparency in the automobile market.
National Tariff Policy to Reduce Production Costs
The Adviser also highlighted the role of the National Tariff Policy in reducing manufacturing costs by making imported raw materials and intermediate goods more affordable.
He said lower production costs would help domestic manufacturers offer competitively priced vehicles and other finished products while improving Pakistan’s position in international markets.
Haroon Akhtar reiterated that the government’s objective was to transform the country’s automotive sector from an import-dependent and assembly-oriented industry into a competitive manufacturing and export hub.
He said the draft policy would now move to the Federal Cabinet and subsequent approval stages before its implementation.
