Topics
In 1975, Nepal launched a trolley bus system with a Rs 40-million grant from China, aiming to modernise Kathmandu's transport and offer a cleaner alternative to diesel buses. The system, run by the Nepal Transportation Corporation, served over 10,000 passengers daily along the Kathmandu-Suryabinayak route. However, it shut down in 2009 due to high maintenance costs and an aging fleet, leaving the city reliant on fossil fuel-powered vehicles.
Fast forward to April 9, 2025, Kathmandu's Air Quality Index (AQI) hit 179 ("poor"), with PM2.5 levels 8.6 times higher than WHO's guideline. In 2019, air pollution caused an estimated 42,100 deaths in Nepal.
Although EV imports are rising – with 11,701 EVs (cars, jeeps, vans) imported in 2023/24 – progress is stalled by inconsistent policies, limited charging infrastructure and unreliable electricity. Loadshedding has further weakened public confidence in EVs amid worsening air pollution.
While the government offers customs duty reductions for EVs (10%–60% based on battery capacity), the cost gap with internal combustion engine vehicles (ICEVs) remains wide. A recent Nepal Rastra Bank policy has added to the challenge – reducing EV loan financing from 80 per cent to 60 per cent, while increasing it for ICEVs from 50 per cent to 60 per cent, citing liquidity concerns.
On top of the financial constraints presented, Nepal lacks sufficient charging stations, with 2024 reports showing that there are only around 400 such stations across the country, with the highest concentration in the capital, leaving the rural areas underserved. Road infrastructure is another vital factor that is inhibiting the adoption of EVs, with most EVs having lower ground clearance and sensitive battery systems.
According to the Nationally Determined Contributions (NDCs) under the Paris Agreement, Nepal made a commitment to have 20 per cent of all public transport vehicles to be electric by 2025, and 60 per cent of public transport vehicles and 90 per cent of private transport vehicles to be electric by 2030. However, we are lagging behind as investments and subsidies are lacking in the private sector-dominated public transport system where ICEVs dominate.
The government has attempted to incentivise EVs by allowing a nominal road tax for them and subsidised electricity rates for charging stations. However, with the inconsistencies in the policy frameworks from the NRB relating to the financing of EVs coupled with the quality of road infrastructure in the country, EV suppliers and enthusiasts have less to be optimistic about for the future.
