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Budget 2026-27: Luxury Cars to Cost 41% More – But Great News for EV Buyers!
Budget 2026-27 imposes 41% FED on luxury cars while extending EV incentives until June 2027. Petrol prices have also been cut. Here is the full breakdown of what this means for car buyers in Pakistan.
Pakistan’s Budget 2026-27 has delivered two very different outcomes for car buyers. One segment gets great news, the other takes a significant hit. If you have been eyeing a luxury imported car, buy now. If you are interested in an electric vehicle, the budget has given you more time and more savings.
Luxury Cars: 41% FED – A Heavy Blow
The government has imposed a Federal Excise Duty (FED) of 41% on high-end and premium imported vehicles. This duty applies to both locally assembled and imported luxury vehicles. In simple terms, the premium SUVs, sedans, and sports cars available in Pakistan are about to get more expensive.
Specifically, imported vehicles above 2000cc now face a higher duty structure. At 86% for 2000cc-3000cc and 92% for above 3000cc, this directly increases the landed cost of vehicles like the Land Cruiser, Mercedes, BMW, and Audi.
The used imported car market in Lahore will also feel the impact. When new imports become more expensive, demand and values for existing used vehicles naturally go up.
Electric Vehicles: Cheaper – And Incentives Extended!
For EV enthusiasts, the news is excellent. The government has extended tax incentives on electric vehicles until June 2027. This means:
- Lower customs duty on EVs
- Reduced taxes on EV parts and batteries
- Continued investment in EV charging infrastructure
EV adoption in Pakistan is still in its early stages, but charging stations are growing in Lahore and Karachi. If you are planning to buy a car in the next 2-3 years and primarily drive within the city, an EV deserves serious consideration.
Petrol Prices Also Reduced – Double Relief!
Alongside the budget, the government has also reduced petrol and diesel prices, providing immediate relief to car owners. Households running smaller petrol cars will feel this benefit directly.
The Overall Picture
The message from Budget 2026-27 is clear. The government wants to make small and medium cars more affordable through import duty cuts, collect more tax from the luxury segment, and actively promote electric vehicles across Pakistan.
At Rachna Motors, we keep you updated with the latest prices and market analysis. Whether you are looking to buy or sell in Lahore, whether it is imported, luxury, or EV, contact us for the right advice at the right time.