Electric Vehicles Imports Surge in Nepal: A Booming Trend, But Challenges Loom

So, let’s talk about something buzzing in Nepal’s automotive world—Electric Vehicles (EVs)! I would bet you to walk a minute on Kathmandu roads without seeing one. BYD, MG, Hyundai, Deepal, Nissan, TATA and even Tesla. At times, it feels like everyone owns an EV these days. Why wouldn’t they, right? Afterall banks lend up to 80% in case of EVs while the financing is around 60% for non EV vehicles in Nepal. So, we could easily say Nepal is bullish on EVs.??

Let’s look into the latest data. Over just two months, 1,602 EVs worth a whopping Rs 3.82 billion have been imported into the country. That’s right! According to the Department of Customs, this marks a staggering 78% jump in EV imports compared to last year. Impressive, isn’t it? The government also raked in Rs 2.31 billion in revenue from these imports. Looks like EVs are not just a fad, but a sign of a growing trend.

But wait—while we’re charging up to the future, there’s a twist in the road! Despite this promising rise, challenges lie ahead in the full-scale transition to electric mobility in Nepal. Let's dive into what’s driving this surge and what bumps still need smoothing.

Nepal's Electric Dreams

Nepal is really charging ahead with its clean energy goals, especially when it comes to electric mobility in public transport. The plan? They want 20% of all four-wheeled public vehicle sales to be electric by 2025, ramping it up to 60% by 2030. And for private vehicles, the targets are 25% by 2025 and a staggering 90% by 2030. Why all this excitement? It’s part of Nepal's big dream to go carbon-neutral by 2045 and to ditch those pricey fossil fuels in favor of our own hydropower.

To help make this switch easier, the government has rolled out some really appealing incentives. Think lower customs duties and excise taxes for electric vehicles (EVs), plus a "green tax" aimed at those gas guzzlers. For the fiscal year 2024-2025, customs duties on EVs are between 10% and 40%, which is a breeze compared to the hefty 50% to 80% on fossil fuel vehicles. As for excise taxes, EVs get the sweet end of the deal, with rates from 0% to 30%, while fuel-based cars face much steeper charges ranging from 60% to 100%. Plus, there's a green tax of Rs. 1 on every litre of fuel, all aimed at encouraging folks to choose EVs over traditional cars. It’s a win-win for both the wallet and the planet! But wait—there’s more to the story than just rising EV imports.

The EV vs. Fuel Paradox

Now here’s where it gets interesting. Even with all those shiny new EVs, fuel consumption hasn’t taken a nosedive. In fact, alongside the EVs, 1,225 gas-powered vehicles were also imported in just two months. Why? Well, EVs are still seen as a luxury for city dwellers, and outside urban centers, charging stations are rare. So, fossil fuels aren’t going anywhere just yet.

And about Nepal’s 4.35% drop in the oil import bill? It’s more about falling global oil prices than an EV revolution. Diesel imports cost 6.36% less, but the actual fuel quantity barely dipped, and petrol imports even increased by over 7,000 kiloliters! We’re still burning a lot of fuel, just paying less for it.

Now, electricity! Nepal’s gone from load-shedding to exporting Rs 16.93 billion worth of electricity last year. Sounds great, right? But here’s the kicker: we waste surplus electricity in the wet season, and in the dry season, we’re forced to import it at higher prices. It’s like selling power for cheap in summer and buying it back at a premium in winter. The solution? Use that extra power domestically—hello, more EVs! That way, we cut down on fuel and keep the electricity flowing at home.

Shifting Gears: What Needs to Happen?

So, what’s the road forward? Sure, tax cuts and subsidies are great, but they’re just the starting point. To truly rev up the EV market, Nepal needs to invest in a broader charging infrastructure. Imagine a network of charging stations across the country—especially in rural areas. That could make owning an EV a viable option for more people.

There’s also a case to be made for expanding electric public transport. This could drastically reduce the number of gasoline-powered vehicles on the road and drive up demand for locally generated electricity. Currently, most of the imported EVs are jeeps, cars, and vans—mainly from China. Popular brands like BYD, MG, and Omoda are making waves in Nepal, but they remain out of reach for many.

Here’s where the government could step in again—how about negotiating with manufacturers to produce more affordable electric options? A greater variety of budget-friendly EVs could bring in a whole new wave of buyers. And wouldn’t that be a win-win for both the economy and the environment?

What’s Next?

Nepal’s ambition to become carbon-neutral by 2045 is inspiring, and the rise in EV imports shows that we’re on the right track. But the journey is just beginning. For EVs to become mainstream, we need more than just incentives—we need infrastructure, affordability, and policy shifts that make electric mobility a no-brainer for everyone.

So yes, the EV wave is growing, but to truly ride it, Nepal needs to tackle these challenges head-on. With the right moves, the country could easily become a regional leader in clean energy. And wouldn’t that be electrifying?

Hope that gives you a clearer view of Nepal’s electric vehicle boom—there’s so much potential, but still a lot to be done to make EVs a true alternative for all Nepalis. Keep an eye out; things are getting exciting!