A Sunrise Sector in the Making
Last year was a milestone for the EV dealers in Nepal after securing a staggering 50 percent share of passenger vehicle sales indicating that EVs are becoming the mainstay in the domestic automobile business.
the HRM
Over the past two years, the Nepali electric vehicle (EV) market has witnessed a remarkable growth trajectory. Official data shows a substantial increase in the import of EVs in the passenger vehicle segment as 4,050 units of such vehicles worth Rs 11.83 billion were imported in the last fiscal year 2022/23 compared to 1,807 in FY 2021/22 and a mere 200 units in FY 2020/21. The EV import figure in the last fiscal year is a staggering 124.12 percent increase from FY 2021/22.
The automobile import data of the last fiscal year suggests that EVs accounted for 50 percent of passenger vehicle sales underscoring the popularity and potential of EVs in the country. As the Nepali automotive business traverses through various ups and down stemming from changes in policy directions of the government and the central bank as well as the market grappling with economic uncertainties, the EV business has become a new sunrise sector that is fueled by innovations and disruptions the world over.
The annual foreign trade statistics issued by the Department of Customs show Nepal imported electric cars and SUVs mainly from six countries, namely India, China, South Korea, the United States, the United Kingdom, and Indonesia.
In FY 2022/23, India topped the list of EV source countries for Nepal. Nepal imported 2277 units of electric vehicles from its southern neighbor. Similarly, the country imported 1371 electric vehicles from China.
Nepali automobile dealers have been importing EVs of US brand Tesla, European brands Audi, Jaguar, MG (now Chinese owned), Citroen and Peugeot, Korean brands Hyundai and Kia, Japanese brand Nissan, Chinese brands BYD, Great Wall Motors, and Indian brand Tata.
The popularity of electric cars is evident from the fact that major business conglomerates in Nepal are competing with each other to become authorized distributors for prominent electric car manufacturers.
The upward growth momentum
According to automobile dealers, the shift to EVs from internal combustion engine (ICE) vehicles has been swift in Nepal as acceptance of EVs is increasing rapidly. Sabita Chhetry, Business Head at thee GO, the distributor of thee GO passenger and commercial EVs, says that EVs have gained acceptance from the government as well as consumers and the automobile market is undergoing a transformation significantly. “With limited foreign exchange reserves, embracing EVs offers substantial savings on petroleum products, making it a viable solution for the country. This shift has benefitted both general consumers and the government as EVs offer significantly lower operating costs. It reduces fuel cost and petroleum imports,” she said.
Rupesh Sharma Bhatta, Vice President at V. G. Impex Pvt. Ltd., the importer and distributor of Great Wall Motors in Nepal, attributes the popularity of EVs in Nepal to cost-effectiveness, eco-friendliness, and low operational expenses offered by such vehicles. “However, to accelerate the transition to greener transportation, it is important to make affordable EV alternatives available in the market. While reduction of taxes on EVs have been implemented, the high cost of batteries remains a significant obstacle to the market growth,” he opined.
The soaring fuel prices have made EVs an appealing choice for Nepali consumers who are seeking more sustainable and greener transportation options. The increasing acceptance of EVs in Nepal is evident from the substantial influx of electric cars, jeeps, and vans in the capacity range of up to 50 KW.
Dhruba Thapa, President of NADA Automobiles Association of Nepal, says the EV brands have established themselves as a frontrunner in sustainable transportation particularly in the last two years. “The Nepali automobile market is unique in terms of offering EVs at the same price as ICE vehicles. It is a rarity compared to other countries where EVs are significantly cheaper due to lower tax rates,” he said.
Unfair tax policies
Analysts and experts say that despite the growth, the EV market in Nepal faces challenges due to contradictory government policies, inadequate infrastructure, complex taxing mechanisms, lack of trust in EVs, poor road conditions, and irregular electricity supply. According to them, these issues pose significant hurdles in the widespread adoption of electric vehicles, necessitating focused efforts and cohesive strategies to overcome the barriers and foster a sustainable and successful EV ecosystem.
The recent increase in customs and excise duty on entry-level electric cars, jeeps, and vans in Nepal is an unfair taxing policy that could hamper the general consumers who are willing to buy electric vehicles, they say.
According to environmentalist Bhusan Tuladhar who is also the Board Member of Sajha Yatayat, this decision is concerning because it goes against the government’s own policy of increasing electricity consumption and moving towards zero carbon emissions. “The government’s approach to reducing taxes on mid-range EVs while increasing taxes on entry-level vehicles seems counter-intuitive. Entry-level electric vehicles are often more affordable and accessible to a wider range of consumers, which could have encouraged more people to adopt green vehicles and contribute to reducing carbon emissions,” he said, adding, “By imposing higher taxes on the very segment of electric vehicles that is in high demand and actively being used in Nepal, the government risks deterring potential buyers and hindering the growth of the EV market.”
The government has increased customs and excise tax on electric cars between 50 to 100 kilowatts by 5 and 10 percent, respectively. The vehicles in that bracket will now have to pay 15 percent customs tax and 10 percent excise duty. Earlier, electric vehicles between 50-100 KW did not have to pay excise duty. This tax hike has increased the price of up to 100 KW electric vehicles by up to 20 percent, say businesses.
In the budget for the current fiscal year, the government has reduced taxes on vehicles with motor capacity of 100-200 kW from 30 percent to 20 percent (both customs and excise duty). For vehicles with a capacity of 200-300 kW, customs duty has been maintained at 40 percent (previously 45 percent), with a constant excise duty of 45 percent. Meanwhile, vehicles with a capacity of over 300 kW continue to face customs rates of 60 to 80 percent (previously 60 percent), along with a 60 percent excise duty.
According to EV dealers, tax hikes will create a substantial barrier for budget-conscious consumers and may result in many opting for ICE vehicles instead of EVs. The tax reductions for mid-range EVs and high-end EVs do not fully compensate for the negative impact on entry-level EVs, they say.
Bhatta of VG Impex thinks the existing taxing system in Nepal presents a hurdle to the growth of EVs. “The unscientific approach, with high-end vehicles enjoying lower tax rates while mid-range and low-end vehicles are subjected to higher taxes, discourages EV adoption,” he mentioned. “Implementing a fair and progressive taxing system that incentivizes green and sustainable transportation options, such as EVs, will promote their widespread acceptance.”
The infrastructure hurdle
The EV culture in Nepal is still in a nascent stage and the market growth is obstructed by poor roads and other essential infrastructure. According to Pramod Bhandari, Executive Senior Manager at Agni Energy Pvt. Ltd., the authorized distributor of Mahindra electric vehicles EVs in Nepal, the absence of fast charging stations in major cities is a major roadblock for the EV market’s growth. “Building a comprehensive charging infrastructure is capital-intensive, requiring collective efforts from both the private and public sectors. The government must play a pivotal role in establishing fast charging stations to foster consumer confidence and facilitate intercity travel with EVs,” he said.
NADA President Thapa shares a similar view that areas with off-road terrains present a challenge for EV adoption, as charging stations are scarce in such regions. “This limitation hampers the widespread use of EVs in areas where proper infrastructure is lacking. Developing a robust charging infrastructure in these locations is essential for promoting EV adoption,” he suggested.
According to EV dealers, currently just over 60 DC fast chargers and 300 AC chargers are available across the country which is way below the number needed to expand the EV market.
Chhetry of thee GO says that while the numbers are simply not enough, Nepal is in a nascent stage of EV adoption and the number of charging stations will rise with time as the private sector invests more in infrastructure development. “Talking about Thegoo, we have charging stations at our dealer outlets. And we plan to add charging stations where new dealerships are opened,” she said, adding, “We’ve charging stations placed strategically in areas where EV adoption is growing to cater to the increasing number of vehicles. This approach enables continuous investment and support for the expanding EV market.”
Apart from the investment from the private sector in building charging stations, the government, lately, has shown some seriousness about building infrastructure for promoting EVs. Nepal Electricity Authority (NEA), the state-owned power utility, aims to install one charging station at every 60 km stretch of the main highways across the country. In collaboration with the private sector, NEA has already installed 45 charging stations across the country.
“In total, we will be developing 51 charging stations in the initial phase. Six stations will come into operation in a month or so. Likewise, we are also planning to collaborate with the private sector to install more charging stations by the end of this fiscal year,” said Sagarmani Gyawali, Head of the Charging Stations Construction Project at NEA. “The authority has already approved to set up 40 charging stations across Nepal in the current fiscal year.”
Shawant Jung Sijapati, General Manager of Passenger Vehicle Business Unit at Sipradi Trading Pvt. Ltd., the authorized distributor of TATA EVs in Nepal, sees NEA’s commitment to building charging infrastructure as commendable. According to him, Sipradi Trading has also been setting up its own charging stations. “With 30KW DC super-fast chargers installed in 20 locations and fast chargers available in 100 places, range anxiety is alleviated, and consumers gain the confidence to switch to Tata EVs. This growing network of charging stations is vital for promoting intercity travel with EVs, encouraging more people to embrace this eco-friendly mode of transportation,” he said.
Government’s green plan set to flop
In 2016, Nepal submitted its first Nationally Determined Contributions (NDC), aiming to achieve a 20 percent share of EVs in all passenger vehicles by 2020. However, only around one percent of the total vehicle fleet became electric and the plan failed miserably.
In its second NDC, the government set ambitious targets for EV adoption: 25 percent of all private passenger vehicle sales to be EVs by 2025 and 90 percent by 2030. Also, it aimed for 20 percent of four-wheeler public passenger vehicles to be EVs by 2025 and 60 percent by 2030.
Also, during the COP26 in Glasgow in 2021, the then Prime Minister Sher Bahadur Deuba committed to achieving net zero by 2045 and increasing the sales of private electric vehicles to 25 percent by 2025 and 90 percent by 2030.
However, all these plans are set to flop due to contradictory government policies, say experts. “First, the government’s decision to raise taxes on entry-level battery-powered vehicles has discouraged the public from adopting clean energy, despite Nepal’s upcoming year-round electricity surplus. Moreover, this move contradicts the government’s decarbonization objectives,” mentioned Tuladhar.
During Prime Minister Pushpa Kamal Dahal’s recent visit to India, the signing of two petroleum pipeline deals showcased contradictory policies. “On one hand, Nepal is aiming at becoming carbon neutral, but on the other hand, it is signing deals to import fuel and investing a huge amount in pipelines worth INRs 17 billion,” he said.
Commenting on the tax changes, Finance Minister Dr. Prakash Sharan Mahat dismissed the notion that the general public was affected by the tax increment on electric vehicles. He claimed that the tax on EVs had been logically maintained and not increased. “The lower-capacity EVs were taxed at lower rates, while higher-capacity EVs incurred higher tax rates. The taxation rate on EVs is much lower compared to petroleum-based vehicles, ensuring that the revenue remained reasonable and the promotion of EVs is not hindered,” he said addressing a session of the House of Representatives on June 9.
Contrary to the fears that the price of entry-level EVs will spike after the government hiked customs and excise duties, the market prices of EVs with up to 100 kW motor capacity have not increased only by 5-10 percent as dealers are avoiding losing the market share of this segment which is biggest in the overall EV market.
The savings
While EVs may have higher upfront costs during purchase or lease, the potential tax benefits and incentives have significant savings for consumers. The expenses of maintaining EVs are notably cheaper due to fewer parts, reduced fluid usage, and gentler wear on brake systems.
Consistent electricity rates further contribute to up to 50 percent lower operation and maintenance costs compared to fluctuating fuel prices. With advancements in battery technology, the cost per mile for driving electric cars becomes much more affordable than traditional automobiles, especially as average EVs can cover 100 miles on just 30 kilowatt-hours (kWh) of charge, say importers.
According to Chhetry, ICE vehicles travel approximately 150 kilometers with a cost of at least Rs 20 per kilometer, whereas EVs cover the same distance for just Rs 2, providing significant savings for consumers and operators alike.
Nepal spent Rs 292.77 billion to import petroleum products in the first 11 months of the last fiscal year, which was 88.7 percent more than the imported amount of fossil fuels during the review period last year. The records with Nepal Rastra Bank (NRB) show that Nepal imported petroleum products of Rs 155.14 billion during mid-July and mid-May of the fiscal year 2020/21.
In the same period this year, petroleum imports went up by Rs 137.63 billion. Despite the government’s announcement to reduce the consumption of petroleum products through various measures, the government’s effort has not been effective to yield the desired result.
“The imports of petroleum products will be reduced by a huge amount if the government focuses on electric vehicles. However, its contradictory policies and lack of investment in infrastructure pose a threat, and the future, it seems, doesn’t look promising as expected,” said Tuladhar.
According to analysts, Nepal stands to gain economically from this transition as petroleum products currently represent more than 17 percent of the country’s import expenditure. By decreasing dependence on imported fuels through the adoption of electric vehicles, Nepal can free up these financial resources, channeling them into essential sectors to bolster economic growth and foster overall development, they say.
Lack of focus on commercial EVs
Despite the growing acceptance and investment in EVs in Nepal’s public transportation system, there are still several challenges hindering their widespread adoption. While many public transport companies have switched to EVs lately in various cities Nepalgunj, Surkhet, Birgunj, Dhangadi, and Mahendranagar, Kathmandu, Pokhara, and Butwal, the use of electric buses is limited.
Tuladhar of Sajha Yatayat says that electric buses are undoubtedly the most advantageous category within the realm of EVs for any country. “By providing a dependable and accessible mode of travel for the majority of people, such buses effectively discourage unnecessary consumerism and significantly alleviate traffic congestion on roads. The positive impact of electric buses extends far beyond just environmental benefits, making them a key solution for sustainable and efficient urban mobility,” he said.
Bhandari of Agni Energy says while EVs have gained popularity for shorter commutes within cities, people’s hesitancy to travel long distances with EVs remains a challenge. “Many still prefer ICE vehicles for intercity travel due to concerns about limited charging infrastructure and range anxiety. Addressing this reluctance is crucial for the government to achieve its green vision for the country,” he opined.
According to Thapa, despite a favorable one percent tax rate on public buses, the mass transportation sector struggles with EV adoption due to road infrastructure limitations. “The difficult terrain, especially in rural areas, poses challenges for EV operations, impacting sales even with tax incentives,” he said.
12 companies have applied to conduct a feasibility study for operating electric buses on Kathmandu Valley’s ring road. The Investment Board Nepal (IBN) called for proposals on February 5, with a deadline of March 23. The estimated cost for the project is Rs 20.19 billion, and it will be implemented under the public-private-partnership (PPP) model. The plan includes operating 75 electric buses on the 27.30 km long ring road, with 27 bus stations and various planned infrastructures such as smart card fare collection, GPS system, charging stations, and more. IBN is said to be currently conducting technical assessments of the applicant firms.
Earlier in February, Sundar Yatayat Pvt. Ltd. decided to halt its electric bus service due to the lack of cooperation from the government. An official of the company said that NEA announced a year ago that they would not collect the demand fee from EV charging stations, but the decision had not been implemented. As a result, Sundar Yatayat decided to stop its services.
Challenges in after sales services
The after-sales support for EVs is another challenge in Nepal as limited technicians are available, say stakeholders. For example, if a vehicle encounters issues while traveling from Kathmandu to Pokhara, there are few service centers along the route. In such cases, individuals have to either bring technicians from major cities or arrange for the vehicle to be transported back on a truck, highlighting the lack of accessible support infrastructure for EVs in remote areas.
According to Chhetry, despite the challenges, the initial phase of after-sales service for EVs has shown promising results, as the number of complaints is considerably lower compared to ICE vehicles. “The simpler design of EVs, mainly comprising batteries and controllers, contributes to fewer mechanical issues, leading to increased reliability. However, the focus remains on continuous improvement to enhance after-sales support for customers. As the EV market flourishes, the network of service centers will expand, and more skilled technicians will join the industry, ensuring top-notch service for EV owners,” she said.
Sijapati of Sipradi Trading says there are 15 service centers of TATA dedicated to EVs. “The after sales support for EVs is well-established, and we are working to expand the network further. This network ensures that EV owners receive timely and efficient service, enhancing customer satisfaction and trust in the technology,” he mentioned.
According to Bhandari, the lack of sufficient service centers on highways poses challenges for EV owners facing malfunctions or technical issues during long-distance journeys. In such cases, vehicle owners often encounter inconvenience and additional expenses, making after-sales services a crucial aspect to address. “Training and developing a skilled technician team is essential to provide efficient assistance to EV owners, even in remote locations,” he said. Bhandari is of the view that to overcome these hurdles and ensure a successful transition to EVs, the government must play a proactive role. “Collaboration with the private sector to establish fast charging infrastructure, offering incentives to encourage intercity EV travel, and prioritizing the expansion of service centers on highways are critical steps,” he concluded.
“The government needs to play a pivotal role in establishing fast charging stations”
Pramod Bhandari, Executive Senior Manager, Agni Energy Pvt. Ltd.
The EV movement in Nepal is gaining momentum as consumers become increasingly aware of electric vehicles’ benefits and show genuine interest in adopting them. Three-wheelers have been successfully introduced outside the valley, with a thriving market driven by their exceptionally low operational costs. However, several significant hurdles challenge the EV market’s expansion in Nepal. The lack of fast charging stations in major cities hampers ecosystem growth, necessitating government intervention.
The reluctance of people to travel outside cities with EVs poses a barrier to the green future envisioned by the government. Moreover, inadequate after sales services and the scarcity of service centers on highways demand further attention to support the EV ecosystem. The absence of fast charging stations in cities is a major roadblock to the EV market’s growth. Building a comprehensive charging infrastructure is capital-intensive, requiring collective efforts from both the private and public sectors. The government needs to play a pivotal role in establishing fast charging stations to foster consumer confidence and facilitate intercity travel with EVs.
The lack of sufficient service centers on highways poses challenges for EV owners facing malfunctions or technical issues during long-distance journeys. In such cases, vehicle owners often encounter inconvenience and additional expenses, making after-sales services a crucial aspect to address. Training and developing skilled technical teams is essential to provide efficient assistance to EV owners, even in remote locations. To overcome these hurdles and ensure a successful transition to EVs, the government must play a proactive role. Collaboration with the private sector to establish fast charging infrastructure, offering incentives to encourage intercity EV travel, and prioritizing the expansion of service centers on highways are critical steps. Supporting technician training and development will further enhance after sales services, increasing customer satisfaction and confidence in EVs.
“EVs have gained acceptance from the government as well as consumers”
Sabita Chhetry, Business Head, thee GO
EVs have gained acceptance from the government as well as consumers and the automobile market is undergoing a transformation significantly. With limited foreign exchange reserves, embracing EVs offers substantial savings on petroleum products, making it a viable solution for the country.
This shift is particularly evident in the commercial vehicle segment, where EVs offer significantly lower operating costs, benefitting both consumers and operators. Additionally, the after-sales service for EVs shows promise, with fewer complaints compared to internal combustion engine (ICE) vehicles.
As the EV market continues to expand, the establishment of more service centers and charging stations will further facilitate the growth of this sustainable transportation ecosystem. In the commercial vehicle segment, EVs have emerged as a cost-effective alternative. An ICE vehicle travels approximately 150 kilometers with a cost of at least Rs 20 per kilometer, whereas an EV covers the same distance for just Rs 2, providing significant savings for consumers and operators alike.
thee Go’s commitment to EVs in Nepal’s commercial vehicle segment is evident from the opening of 12 service centers this year, along with the establishment of several charging stations. Charging stations are strategically placed in areas where EV adoption is growing to cater to the increasing number of vehicles. This approach enables continuous investment and support for the expanding EV market.
Our company’s dedication to commercial EVs is evident through the successful sales of 180 units across the country. This year, the company aims to sell 500-600 EVs, demonstrating its preparedness to meet the increasing demand with a diverse range of models. The existing 11-seater microbus has proven its versatility in various applications, from school transportation to intercity routes, while the company also plans to introduce pickups which will broaden our EV portfolio.
“The current adoption rates paint a promising picture of Nepal EV market’s growth”
Shawant Jung Sijapati, General Manager, Passenger Vehicle Business Unit, Sipradi Trading Pvt. Ltd.
Nepal has witnessed a remarkable adoption of EVs surpassing even the global trends. Last year, EVs accounted for 50 percent of passenger vehicle sales, underscoring the popularity and potential of EVs in the country. The government’s commitment to promoting EVs is evident through the reduction of taxes on EVs, making them more attractive than ICE vehicles that face higher taxation. The Nepal Electricity Authority (NEA) is also actively involved in establishing charging stations, further bolstering consumer and industry confidence in the EV market. TATA’s success in the EV segment, particularly with the Tata Nexon, is a testament to the growing acceptance and trust in EVs. As the market is still in its nascent stage, the current adoption rates paint a promising picture of the growth of the Nepali EV market.
Sipradi has 30KW DC super-fast chargers installed in 20 locations and fast chargers available in 100 places. Because of this, consumers gain the confidence to switch to EVs. This growing network of charging stations is vital for promoting intercity travel with EVs, encouraging more people to embrace this eco-friendly mode of transportation.
For Sipradi, Tata Nexon has been a success story. It is in both the EV and ICE segments. With 55 percent of parts shared between the EV and ICE variants, Tata’s approach showcases cost-effective and sustainable manufacturing practices, further strengthening the EV market’s position in Nepal.
Sipradi has 15 service centers dedicated to electric vehicles, and the after sales support for EVs is well-established. This network ensures that EV owners receive timely and efficient service, enhancing customer satisfaction and trust in the technology.
“Existing tax system presents a hurdle to the growth of EVs”
Rupesh Sharma Bhatta, Vice President, V. G. Impex Pvt. Ltd.
EVs have gained popularity among consumers in Nepal due to their cost-effectiveness, eco-friendliness, and low operational expenses. However, to accelerate the transition to greener transportation, it is crucial to make affordable EV options available in the market. While the reduction of taxes on EVs has been implemented, the high cost of batteries remains a significant obstacle. The current urban-centric nature of EV usage in Nepal, coupled with poor road conditions and limited charging stations outside cities, hinder intercity travel with EVs. Addressing these challenges and reforming the taxing system can foster the widespread adoption of EVs and promote a sustainable future.
Encouraging more affordable EV models will incentivize people to choose electric vehicles, leading to substantial savings in petroleum expenses for the government. As battery prices account for at least 30-35 percent of the vehicle’s cost, exploring strategies to lower battery prices or providing incentives can make EVs more accessible to a wider audience.
Many people still perceive EVs as secondary cars, primarily using ICE vehicles as their primary mode of transportation. This hesitance is largely due to concerns about the poor road conditions on highways, making long-distance travel with EVs difficult. Improving road infrastructure and creating charging stations along major highways will instill confidence in EV users and encourage intercity EV travel.
The existing tax system presents a hurdle to the growth of EVs. The unscientific approach, with high-end vehicles enjoying lower tax rates while mid-range and low-end vehicles are subjected to higher taxes, discourages the adoption of EVs. Implementing a fair and progressive taxing system that incentivizes green and sustainable transportation options, such as EVs, will promote their wider acceptance.
“Clear vision and supportive policies are essential to driving EV acceptance and sales”
Bhusan Tuladhar, Board Member, Sajha Yatayat
The lack of a clear government policy on EVs for 2025-2030 hampers the progress of the EV market in Nepal. Clear vision and supportive policies are essential to driving EV acceptance and sales. However, the government’s current stance, with increased taxes on low and mid-range vehicles while reducing taxes on high-end vehicles, creates uncertainty and impedes EV adoption. The absence of subsidies on public buses and insufficient focus on electrifying two-wheelers are additional obstacles.
The unavailability of charging stations, especially for large public buses, and inadequate road infrastructure further hinder the widespread adoption of EVs. Addressing these challenges requires government intervention, supportive policies, and infrastructure improvements.
The government must establish a clear and comprehensive policy framework for EVs in the coming years. This will provide a stable and supportive environment for businesses and consumers to invest in and adopt EVs confidently. A consistent tax structure, with incentives for lower-end vehicles, will encourage more people to choose electric over traditional vehicles.
To promote the electrification of public buses, the government should introduce subsidies in the form of special loans or capital support. These incentives will enable bus operators to afford electric buses, contributing to a greener public transportation system. As two-wheelers dominate Nepal’s private vehicle market, it is crucial to shift focus towards electrifying this segment. Encouraging private companies to invest in electric two-wheelers, with possible incentives, will play a significant role in reducing emissions and enhancing sustainable mobility.
The government needs to take the lead in establishing an extensive and accessible charging infrastructure for both public and private EVs. Identifying suitable locations for fast charging stations, such as repurposing old trolley bus stations, can ensure the efficient operation of electric buses and encourage private sector investment in charging stations.
As low-floor EV buses are not suitable for rural areas with poor road conditions, the government needs to prioritize upgrading road infrastructure to accommodate electric buses. Improved roads will not only facilitate EV travel but also enhance overall transportation in the country.
“Nepali market is unique in offering EVs at the same price as ICE vehicles”
Dhruba Thapa, President, NADA Automobiles Association of Nepal
The EV market in Nepal has shown remarkable growth over the past two years, establishing itself as a frontrunner in sustainable transportation. The Nepali market is unique in offering EVs at the same price as ICE vehicles. This is a rarity compared to other countries where EVs are significantly cheaper due to lower tax rates.
While the EV market’s progress is commendable, challenges remain, especially in off-road areas with limited charging infrastructure. Mass transportation with EVs faces difficulties due to the lack of proper road infrastructure, hindering sales even with a favorable tax rate. The government’s growing recognition of the importance of EVs has led to initiatives to develop charging stations, although further efforts are required to drive the EV revolution in the country.
Nepal’s EV market’s rapid growth is partly attributed to the unique pricing approach, with EVs being competitively priced compared to ICE vehicles. While other nations face high taxes on ICE vehicles, Nepal applies a maximum tax of 25 percent on EVs, making them an economically attractive option for consumers.
But, the off-road terrain areas present challenges for EV adoption, as charging stations are scarce in such regions. This limitation hampers the widespread use of EVs in areas where traditional infrastructure is lacking. Developing a robust charging infrastructure in these locations is essential for promoting EV adoption. Despite a favorable one percent tax rate levied on the import of buses for public transport, the mass transportation sector struggles with EV adoption due to road infrastructure limitations.
The government has recently recognized the significance of EVs in Nepal’s sustainable development and has begun initiatives to develop charging stations. While commendable, more comprehensive planning and investment are needed to establish a widespread and efficient charging network.
