Urdu Report Desk
Indus Motor Company has raised concerns that some competitors are allegedly misclassifying vehicles as range-extended electric vehicles (REEVs) to benefit from lower GST rates.
The company’s management said the issue is under review by the Federal Board of Revenue (FBR) and other relevant regulatory authorities. It expects the matter to be resolved soon, creating a more level playing field for automakers.
The comments were made during Indus Motor Company’s 37th Annual General Meeting, held after the company released its FY2026 results.
What Is a Range-Extended Electric Vehicle?
A range-extended electric vehicle is powered by an electric motor, while an internal combustion engine works as a generator to recharge the battery.
Customs Classification Dispute
The Customs Classification Committee classified REEVs under the same HS code as battery electric vehicles because their wheels are driven solely by an electric motor.
The Pakistan Automotive Manufacturers Association had earlier challenged the classification, arguing that REEVs are essentially series hybrids because they still use an onboard internal combustion engine and fuel.
Toyota’s EV and PHEV Strategy
Indus Motor Company said Toyota offers technologically advanced models across vehicle categories globally, including electric and plug-in hybrid vehicles.
The company said its strategy for launching these models in Pakistan will be finalized following government approval, ratification and the announcement of the new auto policy.
FY2026 Margins and Investment Plans
Indus Motor Company’s gross margin fell to 10.3% in the fourth quarter of FY2026, compared with 13.3% in the same period a year earlier and 15.5% in the third quarter of FY2026.
The company attributed the decline to strategic pricing and higher dealer incentives to support marketing. It plans to invest Rs. 4 billion to Rs. 5 billion in FY2027 to increase the localization of parts and components.
The management also said the company increased inventory to manage shipment delays caused by the ongoing geopolitical situation and reduce the risk of production disruptions.
Hilux Sales Decline
Hilux sales declined in FY2026, partly due to lower government purchases amid the ongoing war.
The company expects the regulatory review of REEV classification to help address differences in tax treatment between competing products.
