Electric Mobility in Nepal
In this paper, we examine how electric transportation has grown in Nepal over time. We look back at history to understand how it has evolved and consider the challenges making it more widespread faces. Looking at the current trend of people adopting cleaner transportation to reduce pollution across the world, electric transportation has a bright future in Nepal. But before we draw conclusion, it is equally important to examine how making the shift to electric transportation will affect everything involved in transportation. Lately, people across the globe are realizing the importance of switching to renewable energy sources such as wind and solar power and, if it is generated by hydropower, electricity, which can then be used to charge vehicles such as electric cars and buses. Indeed, clean electricity is increasingly being used to power trains, cable cars, cars, buses, motorcycles, and even bicycles, a trend reflecting growing environmental friendliness.ISET-Nepal
Electric Vehicles in Kathmandu
Air pollution is a major problem in Kathmandu, primarily because of the increasing number of vehicles on narrow and congested streets. Over the past five years, the number of vehicles in Kathmandu Valley has been increasing at approximately 17 percent per year. Therefore an efficient transport system with clean vehicles is urgently required to combat Kathmandu’s air pollution. In this context, electric vehicles (EV), which use domestic fuel and has zero emission, has proven to be the one of the most suitable means of transportation in Kathmandu, and there is a clear need to further promote these environment friendly vehicles.Clean Energy Nepal
No emission.
Low noise level.
Appropriate for Kathmandu where streets are narrow, traffic speed is low and travel distances are short.
Batteries can be recycled.
They use off peak electricity because the batteries are charged at night.
Government gets revenue from the sale of electricity.
Being a local industry, it provides jobs to the local people.Clean Energy Nepal
Key benefits (selected excerpts)
EVs have zero emission in final energy consumption. They reduce air pollution and vehicular tailpipe emissions among the chief cause of air pollution. EVs produce zero tailpipe emissions, reducing air pollution, and as Nepal increasingly relies on renewable energy sources like hydropower, the environmental benefits grow.ISET-Nepal
The EV industry in Nepal provides jobs to local people and supports a domestic value chain. Establishing an EV ecosystem would contribute to meeting Sustainable Development Goals (SDGs), particularly SDGs 3, 7, 11, and 13.Clean Energy Nepal
Operational cost advantages: The NEA dashboard indicates an average cost per unit used for charging and shows saved CO2 amounts from charging stations; electric microbuses and safa tempos report lower running costs and high profits for operators on short routes due to reduced fossil fuel consumption and relatively low maintenance costs.ISET-Nepal
Government incentives and policy excerpts
Government policies are in general favourable towards EVs. The government does not charge any Value Added Tax (VAT) and only one percent custom duty for import of Safa Tempo’s chassis, engine, motor, battery, and battery charger. Similarly electric vehicles are not required to pay annual vehicle tax (historical policy point). The government has also included some policies favourable to EVs in its budget, including exemption of custom duty for the import of trolley buses and parts and reduction of electricity tariff (as recorded historically by CEN).Clean Energy Nepal
The tax system vacillates according to the government’s need for revenue. The custom duty set by the Nepal government on EVs range depending upon capacity; changes have been introduced since 2019 and the rates have been revised multiple times. The revised tariffs and budget changes are documented in government and sector reports and summarized in policy briefs (see ISET and related GoN documents).ISET-Nepal
Financial support and loans: Policies have included bank loan facilitation (up to 80% finance for EVs in some policy provisions) and longer auto loan tenures for EVs in certain directives, aimed at supporting uptake.ISET-Nepal
Charging infrastructure (facts)
The NEA has established 51 EV charging stations countrywide utilizing demand charge fast-charging technology and is currently constructing another 11. Private dealers and firms (for example BYD dealers, Cimex Inc, Laxmi-Hyundai, and others) have installed additional fast-charging stations and plan further expansion. Sajha Yatayat added 40 electric buses and installed 20 charging stations (1.1 MW capacity) in April 2024. The expansion of chargers includes Level 2 stations (4–6 hours full charge) and strategically placed Level 3 DC fast-charging stations (30 minutes full charge) to support longer trips along major highways.ISET-Nepal
Challenges and lifecycle considerations
Managing used batteries presents challenges to an already stressed municipal waste management system. The reuse and recycling market for lithium batteries has yet to mature and Nepal must plan for battery recycling, extended producer responsibility, and safe disposal to minimize environmental impacts.ISET-Nepal
Policy implementation gaps: While policies and plans exist (Environment-Friendly Vehicle and Transport Policy, National Action Plan for Electric Mobility, NDC targets), implementation has been uneven. Barriers include institutional coordination, financing for large e-buses and mass transit, and insufficient charging infrastructure in rural/intercity corridors.ISET-Nepal
The way ahead (policy recommendations, selected)
Operate the trolley bus between Tripureshwor and Suryabinayak in partnership with the private sector; construct necessary infrastructure to expand trolley bus systems; reduce night time electricity tariff for EVs; provide special routes to EVs; reduce custom duty and other tax on EVs; support research and development to make EVs more competitive and expand niche markets.Clean Energy Nepal
A more systemic analysis of the cost-benefits of EV use — factoring in reduced air-polluting particulate matter, use of in-country hydropower, and replacement of imported petroleum products — is needed to inform tax incentives and policy design.ISET-Nepal
Join the Discussion
- What impact could wider EV adoption have on air quality in your city or town?
- Do you think current tax and tariff changes strike the right balance between revenue and promoting clean transport?
- How should policymakers prioritise charging infrastructure expansion (urban vs highways vs provincial hubs)?
- What practical steps can local communities take to support safe battery recycling and end-of-life management?