Electric vehicle imports in Nepal have surpassed traditional gas-powered vehicles, marking a significant milestone in the country's transition toward cleaner transportation.

In the first half of the current fiscal year, which ended in mid-January, Nepal imported 12,974 four-wheelers—including passenger buses, microbuses, and private vehicles.

Of these, 7,349 units were EVs, putting Nepal on track to replacing petroleum-based light vehicle imports with EVs by 2031, which aligns with its international commitments.

The rise in EV adoption in Nepal comes with numerous benefits.

EVs are environment-friendly, emitting zero tailpipe emissions, which helps reduce air pollution—a major issue in Nepal’s urban centres. They also contribute to lower greenhouse gas emissions, aligning with the country’s commitment to combating climate change.

From an economic perspective, EVs reduce dependency on expensive fossil fuel imports, which can help improve Nepal’s trade balance over time.

The cost of operating and maintaining EVs is significantly lower than traditional internal combustion engine vehicles, offering long-term consumer savings. Additionally, the growing EV market has the potential to create new business opportunities, such as charging infrastructure development and EV maintenance services.

According to auto dealers, EVs also provide a quieter and smoother driving experience, making them increasingly popular among consumers seeking modern, eco-friendly transportation options.

EV imports from China have grown rapidly, accounting for most of Nepal's EV purchases.

According to the Department of Customs, Nepal imported EVs worth Rs17.45 billion during the review period, with Rs14.36 billion attributed to Chinese imports. EVs from India totalled Rs2.93 billion, while South Korea, Germany, and the US collectively accounted for Rs162 million.

Customs data shows that 5,434 EVs were imported from China, including passenger buses, microbuses, and private vehicles. Meanwhile, 1,890 EVs came from India.

Overall, Nepal’s automobile imports grew by 32 percent in the first six months of the fiscal year, reflecting a recovery in the auto sector.

“The decline in bank interest rates has spurred the import of private and commercial vehicles, especially in the passenger-carrying segment,” said Rajan Babu Shrestha, vice-president of the Nepal Automobile Dealers Association.

Bank interest rates, which previously hovered at 12–13 percent, have dropped to 6–7 percent, attracting more buyers. However, Shrestha noted that sales of construction vehicles, like trucks and tippers, have lagged due to reduced government infrastructure spending.

Nepal’s EV market has seen remarkable growth, with a 149 percent rise in imports last fiscal year ended mid-July. During that period, the country imported 11,701 EVs worth Rs29.48 billion. Currently, EVs account for roughly 85 percent of the passenger vehicle market in Nepal.

Traders attribute the surge in EV sales to factors such as tax waivers, lower financing costs, and various models catering to different customer needs. Popular EVs are priced between Rs4 million and Rs5.5 million, though higher-end models also see a strong demand.

Despite the government increasing EV import duties by 10 percent in the current fiscal year’s budget, sales have remained robust as banks finance up to 90 percent of the vehicle's cost.

Economist Govinda Nepal cautioned against viewing the rise in automobile imports as an indicator of economic recovery. “EVs largely drive the current boost in imports due to favourable tax policies and bank financing, not an increase in income or employment,” he said.

Nepal also imported 38,501 motorcycles worth Rs3.97 billion in the same period and 64,416 unassembled motorcycles worth Rs8.25 billion. Electric two-wheelers are gaining traction, with 5,143 units worth Rs486.10 million imported during the review period.

While the growing adoption of EVs contributes to reduced environmental impact and helps meet Nepal's climate goals, Govinda Nepal highlighted that it has yet to activate the broader economy. "Importing EVs generates revenue for the government, but their impact on economic activity remains limited," he said.

Liquidity in banks has increased as consumers save more, partly due to the recent embezzlement scandals in cooperatives. However, this money remains largely idle, he added.

As EVs dominate the market, Nepal’s shift toward sustainable transportation is evident.

The country’s embrace of EVs aligns with global trends and signals a cleaner, more sustainable future for its transportation sector, said Nepal.