Yamaha Increases Prices of Its Hike Motorcycles in Pakistan After Implementing the New Electric Vehicle Tax
In a significant shift for the Pakistani market, major motorcycle manufacturers have raised prices across their product lineups, following the introduction of the New Energy Vehicle (NEV) levy targeting internal combustion engine (ICE) vehicles.
### Post-NEV Levy Price Revisions
Effective July 1, 2025, Pak Suzuki Motor Company (PSMC) increased prices with new rates including freight:
- GD110S: Rs. 362,600 - GS150: Rs. 392,900 - GSX125: Rs. 504,900 - GR150: Rs. 552,900 - INAZUMA GW250JP: Rs. 1,252,400
These hikes reflect the additional costs passed on from the NEV levy and increased sales tax (now 18%).
Yamaha Motor Pakistan and Unique Motorcycles have also raised prices for all models, incorporating an 18% sales tax plus a 1% NEV levy:
| Model | Base Price (PKR) | Sales Tax (18%) | NEV Levy (1%) | New Retail Price (PKR) | |----------------|------------------|-----------------|---------------|------------------------| | YB125Z | 359,502 | 65,441 | 4,057 | 429,000 | | YB125Z DX | 385,063 | 73,093 | 4,544 | 459,500 | | YBR125 | 395,114 | 71,924 | 4,462 | 471,500 | | YBR125G (Black) | 411,037 | 74,822 | 4,541 | 490,500 | | YBR125G (Matt) | 413,541 | 77,280 | 4,679 | 493,500 |
These increases are attributable to the new taxation framework, including the NEV levy and higher sales tax rates introduced in the Federal Budget 2025-26.
### Affordability and Market Demand Impact
- **Affordability**: The price hikes have considerably raised the entry cost for consumers, particularly affecting budget-conscious buyers who dominate the motorcycle market in Pakistan. Models like the Suzuki GD110S and Yamaha YB125Z now cost well over Rs. 350,000, a significant rise compared to pre-levy rates.
- **Market Demand**: The higher prices are expected to dampen demand for ICE-powered motorcycles to some degree as purchasing power is constrained. This tax-induced cost inflation serves the government's objective to discourage reliance on fossil fuel vehicles and promote a shift toward more environmentally friendly alternatives, such as electric and hybrid motorcycles which are exempt from the NEV levy.
- **Industry Response**: Motorcycle manufacturers are adjusting their strategies, with some possibly focusing more on electric models or lobbying for adjustments to the levy structure to balance environmental goals and market sustainability.
In conclusion, the NEV levy has decisively increased motorcycle prices in Pakistan across brands like Suzuki and Yamaha by adding an extra 1% tax on top of a higher sales tax of 18%. This has reduced affordability and is likely to suppress demand for conventional gasoline-powered motorcycles, incentivizing a market shift towards electric and hybrid vehicles exempt from the levy.
- The industry response to the increase in motorcycle prices includes some motorcycle manufacturers potentially focusing more on the production of electric models.
- The implementation of the NEV levy has contributed to additional costs in the finance of motorcycle manufacturers, as seen with the price hikes in various models from Pak Suzuki Motor Company and Yamaha Motor Pakistan.
- The escalating prices of motorcycles due to the NEV levy and higher sales tax may lead to a decrease in the demand for internal combustion engine (ICE) vehicles in the transportation industry.
- With the increase in taxes due to the NEV levy, the finance sector may experience a shift as motorcycle manufacturers and consumers adapt to the new financial landscape, potentially impacting the automotive industry as a whole in Pakistan.
