May 24, 2022, Tuesday
Nepal 1:37:26 pm

Promotion of EVs in Nepal and private sector engagement

The Nepal Weekly
January 18, 2022

By Purna N. Ranjitkar

Electric transportation was started in Nepal in 1922 with introduction of Dhorsing – Chisapaini-Chandragiri Ropeway (22 km). This was later extended with US assistance to Hetauda- Kathmandu stretch(42 km) in 1964. The Hetauda – Kathmandu system was stopped since 4 decades. Halchok to Lainchaur Ropeway (1924) in Kathmandu was another ropeway system constructed to transport stones from quarry to build palaces. That did not existed longer. Later many short of ropeway systems for industries and local goods transportation were installed. Similarly, Manakamana Cable Car, Chandragiri Cable Car and Kuri Cable were also introduced for human transfer. Some including Annapurna Cable Car in Pokhara are under construction.

The Tripurshwar – Suryabinayak Trolley Bus system (13 km) was another electric transportation in Nepal. The Chinese government gift to Nepal was started in December 1975. Its operation was completely stopped despite of some efforts of the municipalities concerned.

Safa Tempo is yet another contribution in electrical transportation (1995). This was invented to phase out heavy smoke belching three wheelers from the Kathmandu Valley. The campaigners and environment activists successfully made 700 plus Safa Tempos for operation. These are still in operation.

BhairajaSthapit converted a small Subaru Car into electric drive in 1981 to tackle the shortage of fossil fuel. Similarly, Bikash Raj Pandey, Kiran Raj Joshi, Sanjeev Rajbhandari and Girish Kharel converted a Volkswagen Beetle car into electric drive. Another enthusiast Umesh Raj Shrestha also converted a Mitsubishi L100 van into electric drive. Lately Santosh Praja converted one Perodua car into electric drive. Following to that Navaraj Paudel’s team also converted a WagonR car into electric drive. Recently, the Kathmandu University students also had successfully converted an old Maruti car to drive by electricity. National Innovation Centre led by Dr. Mahabir Pun is also working on converting fossil fuel vehicles to electric drive. Likewise the center is also looking for super capacitors to run vehicles. 

Reva car were first introduced as 4 wheeler electric drive in Nepal. Due to lack of government rules and legal provisions the importers suffered a lot to clear for entrance of the vehicles in the country. These cars were seen as environment friendly vehicles for a longtime while some of them are still in run. Similarly Bijuli cars and school vans were brought in from China to Nepal market in around 2012.

The budget of the Fiscal Year2016 -17 was a turning point for the electric vehicles to import. The new rule allowed a total of 28% taxes for importing electric vehicles against a 248% for fossil fuel vehicles excluding public transportation vehicles.  

Finding better climate, private parties started looking for products suitable to Nepal. Some cars like Hao You and JS were brought into Nepal market. In this run, Made in India Mahindra Reva e2O entered in a good quantity. Later, BYD also entered in Nepal market. Around the same time, KIA Soul were also introduced. Later, Hyundai Kona and Mahindra eVerito were brought in. A few Peugeot electric vans were also were also worth to mention.

The budget of 2020-21 rolled back tax rule on electric vehicles which made electric vehicle highly expensive. As a result, imports and users stayed away from thinking of electric vehicles. The slight relaxing of tax rule in the October thee same year could not make any difference.

The budget of 2021-22 has again brought the easy rules, almost similar to the tax rule applied earlier. This made electric vehicle market vibrant again. BYD, Tata Nexon, Kia Nero, Hyundai Kona, MG, Theego, City Smart and Derry have been shined as the tax rules worked better. Moreover, Tesla and Nissan Leaf are also brought into Nepal market. Some other most sold electric vehicles in the global market are expected to arrive to Nepal soon as well.  The market for electric 3 wheelers, escooters and motorcycles are at their original spirits too.

However, electric vehicles for public transportation are yet to be appeared.

On the ground environment to conserve and reduce air pollution, the government of Nepal had formulated policies and plans since 3 decade back. 

•      National Transport Policy, 2001

•      Pollution Tax on Fuel

•      National Energy Strategy, 2013

•      Environment-Friendly Vehicle and Transport Policy, 2014

•      Financial Incentives for Import of EV

•      Road, Rail and Transport Development for Prosperous Nepal – Five Year Strategic Plan (2073-2078)

•      National Action Plan for Electric Mobility, 2018

•      Ministry of Energy Water Resources and Irrigation’s White Paper, 2018

•      Reduced Tariff for Charging of EV

•      National Climate Change Policy, 2019

•      National Environment Policy, 2019

•      Kathmandu Valley Air Quality Management Action Plan, 2076 [2020]

•      Nationally Determined Contributions (II) 2020

The private sector engaged in promotion of electric vehicles in Nepal had struggles in the early times i.e. before the budget made electric vehicle import easy and less expensive.

Following to the budget of FY 2016-17, private sector started looking for good electric vehicles for Nepal as stated above. So as FY 2016-17, FY 2017-18, FY 2019-20 were comfortable for importing EVs. On the contrary, FY 2020-21 was a worst year while FY 2021-22 is regaining the spirit.

Now a days the importers and distributors are working to install charging stations in the cities and in the log route travelling sectors. Their aim is to increase sales of their products primarily. Nepal Electricity Authority (NEA) is also installing and extending technical supports to those who intend to run charging stations.

The importers and distributors of small cars, crossovers, suvs for private uses are getting good sales these days. But, electric vehicles for public transportation is just a nominal in number.

Recently elected executive team of Nepal Automobile Dealers Association (NADA) lead by Dhruba Thapa had committed that NADA will work jointly with stakeholders in electric vehicle promotion in the country and coordination of private sector including importers and distributors will be worked out. That may be one good thing as private sector engagement in promotion of EVs in the country. The association will also influence government sector in formulating favourable policies and programmes which pave ways for private sector and the users will get benefits.

Sundar Yatayat is operating a few electric buses in the Kathmandu Valley and planning to extent in the valley and some cities like Butwal – Bhairahawa. The buses and cars purchased for Bhairahawa International Airport to Lumbini tourist service are not operated yet. Similarly, SajhaYatayat is purchasing 40 electric buses to extend service in Kathmandu Valley and other linking cities is still at a wait. The Bagmati Province government had decided to purchase 30 electric buses has been stayed for more reviews on purchase methodology and operational modalities.    

Similarly, only one taxi company had said that it has an electric car for hire. A few small vans are operated in Kathmandu – Bardibas – Kathmandu and Kathmandu -Manthali- Kathmandu routes. However, institutional entrepreneurship in electric public transportation could not have been promoted so far. The government and other agencies need to consider on the root causes and have to act without delay to address the gaps. 

Moreover, conversion of fossil fuel vehicles (vehicles with internal combustion engine or ICE) into electric drive should be another important aspect the government has to take seriously. The provision for formulating legal background for conversion was clearly mentioned in the Environment-Friendly Vehicle and Transport Policy, 2014.

Similarly, the fund collected as Pollution Control Tax by the government on sale of each litre of petrol and diesel since many years has been swelled to around 15 billion rupees. This fund may be utilised for developing infrastructure and entrepreneurship for electric public transport systems like city bus service, city to city bus service, electric bus service for East – West Highway and also BRTs in the heavy movement sectors.

The development partners, multilateral and bilateral agencies engaged in Nepal are working with the government, non-government agencies and private sector on the ground that electric vehicle is needed for contributing to reduce climate change effects, reduce air-pollution to support public health improvement activities, utilise the electricity generated in the country and to utilise to reduce use of fossil fuel which could support narrowing the trade deficit ratio. Their activities focus more on policy dialogues linked to global activities to reduce climate change effects and policies and plans. Actually, need of the hour is generating technical and financial support to entrepreneurs who intend to operate electric vehicle business for public transportation which ultimately contribute to lessen use of private vehicles and reduce road uses. That means buses and such big passenger capacity vehicles can replace road uses. Therefore, the government, development agencies, activists and private sector need to work on conducive environment to create. So, stakeholders including the government sector, development partners, INGOs, NGOs need to work jointly to find out gaps and recommend way outs and easier solutions.