NEV Levy - The Tax on Petrol Cars Explained

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Key Takeaways

• The NEV Levy imposes a 1% to 3% tax surcharge on traditional petrol and diesel combustion engine cars in Pakistan.
• Levy revenue funds federal electric vehicle subsidies and public charging station infrastructure development.
• Petrol passenger cars face price increases ranging from Rs 30,000 to Rs 300,000 (July 2026).
• Pure electric vehicles (EVs) remain 100% exempt from NEV Levy surcharges.
• The tax policy creates a strong financial incentive for consumers to switch from petrol to electric cars.

What is the NEV Levy and why was it introduced in Pakistan?

The New Energy Vehicle (NEV) Levy is a targeted environmental tax introduced under the National EV Policy 2025-30 and implemented via Federal Board of Revenue (FBR) tax schedules. The levy taxes carbon-emitting petrol and diesel vehicles to fund electric mobility subsidies.

By collecting a small percentage surcharge on petrol car sales, the government generates dedicated funding for charging infrastructure, battery localization, and e-bike subsidies. The table below details NEV Levy tax slabs based on engine displacement.

Figures as of July 2026.

Exempting EVs from the levy creates an immediate price advantage for green vehicles.

Frequently Asked Questions

What is the NEV Levy in Pakistan?

The NEV Levy is a 1% to 3% tax levied on petrol and diesel combustion engine vehicles to fund electric vehicle infrastructure and consumer subsidies.

How much tax does the NEV Levy add to petrol cars?

The NEV Levy adds Rs 30,000 to Rs 300,000 (July 2026) to petrol car prices depending on engine capacity.

Which vehicles are exempt from the NEV Levy in Pakistan?

Fully electric vehicles (EVs) and localized green transit buses are completely exempt from the NEV Levy.

References

• FBR
• Solar Citizen
• PakWheels
• NEPRA