ISLAMABAD – Hybrid car buyers in Pakistan have been handed price relief, with Hyundai cutting prices by up to Rs1.403 million after the government dramatically reduced the sales tax on eligible locally assembled hybrid vehicles.
The price cuts come after Federal Board of Revenue (FBR) lowered sales tax on locally assembled hybrid vehicles with engine capacities of up to 2,000cc from 25% to 18%, effective September 13, 2026. Hyundai has now passed on a significant portion of the tax relief to customers, cutting prices across five hybrid variants from its Elantra, Tucson and Santa Fe lineups.
Santa Fe Signature price plunged by Rs1.403 million, from Rs16.123 million to Rs14.720 million. Santa Fe Smart has also received a seven-figure price cut, dropping by Rs1.316 million from Rs14.574 million to Rs13.258 million. The reductions are not limited to Hyundai’s larger SUVs. Tucson Hybrid Signature is now Rs801,000 cheaper at Rs13.300 million, compared with its previous price of Rs14.101 million.
Tucson Hybrid Smart has fallen by Rs724,000 to Rs12.202 million, while the Elantra Hybrid has been reduced by Rs639,000 to Rs10.761 million. Hyundai’s announcement comes as the government’s revised tax policy begins to reshape Pakistan’s hybrid vehicle market.
FBR’s decision to bring the sales tax down to 18% from 25% applies to locally assembled hybrid vehicles with engine capacities of up to 2,000cc. The move could potentially benefit buyers of several popular hybrid models, including the Toyota Corolla Cross, Haval H6, Haval Jolion, Hyundai Elantra Hybrid, Kia Sportage L HEV, Honda HR-V e:HEV, MG HS and Jaecoo J7 PHEV.
But the tax relief comes with clear limits. The reduced rate is restricted to qualifying locally assembled vehicles. Hybrids with engines above 2,000cc and fully imported CBU vehicles do not qualify, meaning buyers of larger-engine or imported hybrids should not expect the same tax-driven price relief.
The latest reduction follows a turbulent period for hybrid vehicle taxation in Pakistan. An earlier 8.5% concessional tax rate was withdrawn, pushing the applicable sales tax on hybrid vehicles to 25%. The increase contributed to substantial price pressures across the hybrid market and made several models significantly more expensive for consumers. The new 18% rate reverses part of that increase and gives automakers room to reassess their prices.
However, the tax reduction does not automatically guarantee an identical price cut across every brand. Manufacturers ultimately decide how much of the saving is passed on to customers, meaning the actual benefit can vary from one model to another.
Hyundai’s latest price list shows what that relief can look like in practice, with reductions ranging from Rs639,000 to Rs1.403 million.
Which Cars in Pakistan will get cheaper after FBR’s Hybrid Tax Cut?
