Electric vehicles (EVs) accounted for just 1% of the total vehicle fleet in Nepal in 2020. However, its growing popularity presents a significant opportunity for the private sector to invest in electric vehicles and create a favorable environment for electric vehicles. This includes installing sufficient charging stations, enforcing vehicle standards and, above all, ensuring a barrier-free financial system.
Data showed that EV imports in the first 10 months of the year totaled Rs 8.41 billion, with government tariff revenues at Rs 2 billion. In contrast, the annual import cost of petroleum vehicles is reported at Rs 100 billion.
While the use of electric vehicles is gaining momentum, their integration in public transportation remains low in Nepal.
“Anyone who has tried public transport in Nepal knows it can be difficult, that’s why many people in the country use private vehicles. That creates its own issues like traffic congestion, accidents and not to mention more use of fossil fuels to power vehicles,” says Martin Holtmann, IFC Country Manager for Nepal, Bangladesh and Bhutan. “The problem has worsened over the years, with vehicle emissions being one of the three main sources of air pollution in Kathmandu Valley.”
The transport sector is also the largest contributor to Nepal’s greenhouse gas emissions. So, it’s time to think of electric mass transit as a means of helping people get around cities in a way that’s better for the environment. “Nepal has the advantage of hydropower—a renewable energy source to meet its energy needs and what better way to use that natural resource than to power mass transit?” adds Holtmann.
Various companies, including TheeGo, Mahindra, BYD, Kia, MG, Hyundai, Tata, and Nissan, are selling electric vehicles in Nepal. However, to reduce imports and enhance self-sufficiency, it is crucial to establish domestic production of electric vehicles.
Electrification of commercial vehicles is the need of the hour, says Rajan Rayamajhi, MD of TheeGo. “A 11-seater commercial vehicle runs around 300 kilometers daily and consumes around 40 liters of diesel. It could easily be displaced by an EV,” he says the commercial EVs give a larger profit margin to the bus owners. “The private sector is doing well to support electrification drives but the government policy, banks and lawmakers only see private passenger vehicles as EV.”
Mulkot, where TheeGo has installed charging stations, became the second largest electricity consumption of Sindhuli district. “Due to the lack of stability in our policies and plans, commercial EVs are ignored,” Rayamajhi adds.
The recent budget has imposed tighter customs duties on electric vehicles compared to the previous year. The exemption on excise duty for vehicles up to 100 kW provided in the previous budget has been reduced to vehicles up to 50 kW. Additionally, a 15 percent customs duty and a 10 percent excise duty have been levied on vehicles ranging from 50 kW to 100 kW. These changes resulted in a surge of electric vehicle imports up to 100 kW in the past year.
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