The surge in gasoline prices has become a catalyst for the remarkable growth of electric vehicles (EVs) in Nepal's market. Despite the recent decline in fuel prices, EVs continue to gain popularity and market share in the country.
Among the EV models capturing significant attention is the Tata Nexon EV, regarded as a major attraction by industry insiders. Nirmal Khatri, the product manager of Nexon EVs, noted that an increasing number of consumers, businesses, and offices are embracing electric-powered vehicles as the future of transportation.
Import data reinforces this trend. According to the Department of Customs, the import of EVs during the first seven months of the current fiscal year has witnessed a substantial increase of 60.95 percent compared to the same period last year. In this period, Nepal imported 2,009 EV units valued at Rs5.62 billion, whereas the previous year saw imports of 1,191 units totaling Rs3.49 billion.
Auto dealers attribute this surge in EV imports primarily to the availability of easy financing services provided by banks. With financial institutions lending up to 90 percent of the vehicle cost, customers find it more feasible to shift from traditional diesel and petrol vehicles to electric ones.
In the last fiscal year, Nepal imported 1,807 EVs worth Rs5.32 billion, with India emerging as the largest supplier, followed by China.
Khatri shared that their sales of Nexon EVs have been impressive, with over 600 units sold from April 2021 to March 2022. Since March 2022 alone, more than 2,000 units of EVs have been sold, with the Nexon accounting for 90 percent of the market share. Out of the total imports made in the first seven months of the current fiscal year, they have imported and sold 1,800 units.
Rising fuel prices, which reached Rs180 per liter last year, have played a pivotal role in the boom of EV sales. The price range for the Nexon EV in Nepal is between Rs3.89 million and Rs4.39 million. India remains the top supplier of EVs to Nepal, with 1,435 units worth Rs3.89 billion imported from India during the first seven months of the current fiscal year. China and South korea followed, with Nepal importing 294 EVs worth Rs643.59 million from China and 227 EVs worth Rs861.41 million from South Korea in the same period.
Sandeep Sharma, the marketing manager of Laxmi Intercontinental, the authorized distributor of Hyundai cars in Nepal, stated that inquiries for EVs are consistently growing, prompting them to increase their supply accordingly. They sell approximately 50 units of Hyundai's Kona and around 10 units of Ioniq every month. The Kona is priced at Rs6 million, while the Ioniq costs Rs16 million.
Sharma added that the ban on importing fuel-powered vehicles for eight months, coupled with the availability of easy bank financing for EVs, has significantly contributed to their increased sales.
Although challenges such as a lack of charging stations, high-interest rates, and inflation persist, the demand for EVs in Nepal continues to rise. Sharma believes this is due to mobility needs, lifestyle preferences, favorable tax policies, and liberal banking finance services.
To promote the use of electric vehicles, the Nepalese government announced plans to establish 50 charging stations, operated by the Nepal Electricity Authority (NEA), and encourage the private sector to set up charging stations at petrol pumps. The current fiscal year's budget also includes a provision exempting newly established four-wheel electrical passenger vehicle industries from 40 percent income tax for five years from the start of production.