Buying an electric car on bank finance in Pakistan could get much easier. The draft Auto Policy 2026 to 2031, which Prime Minister Shehbaz Sharif approved on Tuesday 20 October 2026, asks the State Bank of Pakistan to raise the car financing limit for new energy vehicles from Rs 3 million to Rs 10 million and to stretch the maximum repayment period from three years to five.
For a buyer, that could mean a far smaller cash payment upfront and a lower monthly instalment on cars such as the BYD Atto 2, MG4 EV or Chery Q. It is still a proposal, though, so here is what has been approved, what still has to happen, and what the change could look like on real prices.
What the draft policy proposes
According to the final draft shared by federal government sources, the financing measure has three parts.
- The overall car financing limit for new energy vehicles would rise from Rs 3 million to Rs 10 million
- The maximum loan tenor would rise from three years to five years
- The change is meant for new energy vehicles, a group that covers battery electric cars, plug in hybrids and range extended electric cars
The draft says the State Bank should favourably consider the change, and it is framed as a way to make smaller electric cars more affordable for lower income buyers. Petrol, diesel and conventional hybrid cars are not part of this proposal.
What the rules allow today
Car loans in Pakistan are governed by the State Bank's prudential regulations for consumer financing, which were tightened in 2021 and 2022 to cool demand and imports. The main limits are these.
- One person can borrow no more than Rs 3 million for cars across all banks combined
- The minimum down payment is 30 percent of the car's value
- The maximum tenor is three years for a car above 1000cc and five years for a locally made car up to 1000cc
- Total monthly loan repayments should not exceed 40 percent of the borrower's net income
- New and used imported cars are not eligible for bank car finance under the 2021 rules
That Rs 3 million cap is the real problem for EV buyers. Most electric cars on sale in Pakistan cost well above Rs 5 million, so a buyer who wants a loan has to find most of the price in cash.
How the change could look on real EV prices
The figures below are a worked example, not a bank quote. They use ex factory prices listed on AutoWheels, assume the 30 percent minimum down payment stays in place and use an illustrative markup of 15 percent a year. Real rates are set by each bank as KIBOR plus a margin, and registration, insurance and freight are extra.
- Chery Q at Rs 5,554,000. Today you could borrow Rs 3 million and pay Rs 2,554,000 upfront, with about Rs 104,000 a month over three years. Under the draft you could borrow about Rs 3,888,000, pay about Rs 1,666,000 upfront and repay about Rs 92,500 a month over five years
- MG Binguo EV at Rs 5,699,000. Today Rs 2,699,000 upfront and about Rs 104,000 a month. Under the draft about Rs 1,710,000 upfront and about Rs 94,900 a month
- MG4 EV at Rs 6,949,000. Today Rs 3,949,000 upfront and about Rs 104,000 a month. Under the draft about Rs 2,085,000 upfront and about Rs 115,700 a month
- BYD Atto 2 at Rs 7,290,000. Today Rs 4,290,000 upfront and about Rs 104,000 a month. Under the draft about Rs 2,187,000 upfront and about Rs 121,400 a month
- BYD Atto 3 at Rs 8,990,000. Today Rs 5,990,000 upfront and about Rs 104,000 a month. Under the draft about Rs 2,697,000 upfront and about Rs 149,700 a month
The pattern is clear. Today the loan is stuck at Rs 3 million whatever the car costs, so the cash you need rises almost one for one with the price. Under the draft, the cash you need would fall to the 30 percent down payment for any EV up to about Rs 14.3 million, because that is the point where 70 percent of the price reaches the new Rs 10 million cap.
The catch with a longer loan
A five year loan lowers the monthly bill, but you pay markup for longer. On the same Rs 3 million at the illustrative 15 percent rate, total markup is about Rs 744,000 over three years and about Rs 1,282,000 over five years. Borrowing more also means more markup in rupees. On the Atto 2 example above, five years of markup on about Rs 5.1 million would come to roughly Rs 2.18 million.
The 40 percent income test also still applies. An instalment of about Rs 121,400 a month would need a net monthly income of roughly Rs 303,500 if you have no other loans. So the higher limit helps most people who earn enough to service a bigger loan but do not have Rs 4 million or more in savings.
Who would actually benefit
- Buyers of locally assembled electric and plug in cars, because the 2021 rules bar bank finance on imported new and used cars. Unless the State Bank also changes that rule, fully imported EVs may stay outside the higher limit
- Salaried buyers with steady incomes who can pass the debt burden test
- Buyers of cars priced from about Rs 5 million to Rs 14 million, where the old Rs 3 million cap bites hardest
Ask the dealer whether your chosen car is locally assembled or imported fully built, and ask the bank directly whether it will finance it.
What still has to happen
None of this is in force yet. The draft now goes to the IMF and the federal cabinet, and parts of the policy will need a bill in parliament. The financing change itself has to come from the State Bank through an amendment to its prudential regulations, and banks then set their own terms. The draft does not guarantee that every borrower will qualify for Rs 10 million.
The same draft also proposes lower sales tax of 1 percent on battery electric cars, 6 percent on range extended cars and 9 percent on plug in hybrids, plus a new levy on bigger petrol and diesel cars. We break down those price effects in our guide to the Auto Policy 2026 to 2031 levy and EV tax, and explain which tax rules apply today in what is law now and what is still draft.
Should you wait for the new limit
If you can already afford the down payment under today's rules, waiting carries its own risk, because prices, tax rates and the rupee can all move before the State Bank acts. If the cash gap is what is stopping you, it makes sense to shortlist now and watch for a State Bank circular. Compare running costs with the current petrol price in Pakistan, look at options in new cars under 70 lacs, read our Chery Q vs MG Binguo EV comparison and put your shortlist side by side in the car comparison tool. If you are waiting for a locally built BYD, our BYD plant update tracks the factory's progress.
We will update this story when the State Bank issues any change to its car financing rules.