Limited charging stations have emerged as a prime concern in promoting electric vehicles in the country whose demand is on the rise amid high operational costs for the fossil fuel-driven vehicles.

Stakeholders said that the promotion of electric vehicles could help increase domestic consumption of electricity at a time when the country has been forced to spill power in the wet season due to limited domestic consumption and limited exports to India.

With India allowing Nepal to sell only over 450 megawatts, Nepal had to face spillage of power in the last wet season. But potential growth in the adoption of electric vehicles has been hindered by a lack of charging stations and inconsistent government policy regarding electric vehicles, the stakeholders said.

“Demand for electric vehicles is on the rise but there are not enough charging stations that match the demand for electric vehicles,” said Sameer Shrestha, project and marketing manager, Cimex Inc Pvt, Ltd, the authorised distributor of the Chinese multinational BYD Auto Industry.” “Not only in Kathmandu, the adoption of electric vehicles is also growing outside the Valley.”

According to Shrestha, Cimex Inc has opened 21 charging stations across the country. Out of them, 14 are accessible to all electric vehicles, regardless of brand.

Likewise, the other Electric Vehicle (EVs) dealers have also installed their own charging stations in different parts of the country.

Nepal Electricity Authority has taken the biggest initiative with the state-owned power utility body setting up 51 charging stations across the country. “Construction of 30 charging stations has already been completed. Of them, 25 are already in operation, including five in Kathmandu Valley,” said Sagarmani Gyawali, head of the charging station construction project at the NEA. “Installation work is undergoing at the remaining 21 charging stations.”

In March 2021, the Chinese Company—Jiangsu Jingdao New Energy Co Ltd, was awarded the contract of installing 501 charging stations across the country, including seven in the Kathmandu Valley. The Chinese company is required to be around for another five years for the repairs as well as maintenance of the stations.

“Our charging stations that have come into operation have remained busy for around 12 hours a day, charging the vehicles. Chargers installed on the highways have remained fully packed,” said Gyawali.

However, the NEA does not have any plans to add charging stations with its own resources in the near future. “Our policy is to encourage the private sector to set up the charging stations after we build certain charging stations, initially, to pave the way for the private sector to come into the business,” said Suresh Bhattarai, spokesperson at the NEA.

A private-sector investor has to take the approval of the NEA to establish a charging station because the NEA has to install electric meters at the charging stations so that the NEA could charge tariffs on the electricity consumed by the charging stations.

Gyawali said the NEA has a policy to facilitate the private sector to open their own charging stations, as far as possible. “We have already given the approval for setting up 37 charging stations across the country,” he said.

The inadequacy of charging stations has not stopped the growth in the adoption of electric vehicles in the country.

According to the Department of Customs, the country imported a total of 1,749 four-wheeler electric vehicles valued at Rs4.92 billion during the first six months of the current fiscal year, 2022-23. During the same period last fiscal year, as many as 1,103 such vehicles valued at Rs3.24 billion were imported.

A total of 1,804 electric four-wheelers cars and vans were imported in the last fiscal year. When it comes to electric three-wheelers, a total of 3,848 of them were imported during the first-half of the current fiscal year, compared to 2,951 during the same period in the last fiscal. Nepal imported 5,455 electric motorcycles worth Rs481.32 million in 2021-22.

With the government imposing a complete ban on the import of fossil fuel-based vehicles from April 2022 to December 2022 amid a decline in its foreign exchange reserves, electric vehicles got a bigger chance to make inroads in Nepal. The government has since lifted the import ban on fuel-based vehicles.

However, Shrestha believes that growth in the demand for electric vehicles won’t come down even with the lifting of the import ban. “Adoption of electric vehicles is growing globally and Nepal will follow the trend because of the high cost of operating fuel-based vehicles amid rising fuel costs,” he said. “We have already got a booking for around 130 cars.”

Nepal has adopted an inconsistent policy when it comes to electric vehicles though globally, adoption of electric vehicles is being promoted.

For example, Nepal’s neighbours—India and China—have announced dates to phase out vehicles that run on non-renewable resources.

The Indian government aims to make India a 100 percent electric vehicle nation by 2030. It has proposed that two-wheelers below the engine capacity of 150cc sold in the country after March 31, 2025, and three-wheelers sold after March 31, 2023, should run on electricity.

China has announced an ambitious plan under which all new car sales in 2035 will be either hybrids or new-energy vehicles. Driven by strong growth in China and Europe, EV sales crossed a critical milestone in 2022 with their total sales accounting for 10 percent of the global vehicle sales, according to reports.

Nepal also aims to increase the presence of electric vehicles in the country.

Presenting the budget for the fiscal year 2021-22, Bishnu Paudel, who was then the finance minister, said that Nepal plans to shift from light vehicles that run on petroleum products to electric ones, by 2031.

“For the manufacture and assembly of electric vehicles, companies of the world's top ten brands will be attracted to set up their plants,” said Paudel at the time who has once again become the finance minister in the new government. “Tax subsidies would be offered and land on the lease would be provided to make Nepal attractive for such companies.”

He had rolled back higher duties imposed by previous finance minister Yuba Raj Khatiwada, removing excise duty and reducing customs duty to 10 percent.

Then, former finance minister Janardan Sharma decided to levy excise duty again on top of the customs duty on high-performance electric vehicles.

The budget presented by Sharma slapped a 30 percent excise duty on vehicles fitted with 100-200 kW motors. A 45 percent excise duty was levied on the import of EVs equipped with motors of 201-300 kW capacity and 60 percent excise duty was slapped on EVs with a motor capacity of more than 300 kW.

“Because of higher duty, our newly-launched electric SUV, Atto 3, has become expensive because it is fitted with a 150kW motor,” said Shrestha Cimex Inc. “Still, we have got an order for 40 such cars.”

With the country having a limited number of electric vehicles plying its roads, they have not made any significant contribution to the power consumption in the country. “Our current focus is on increasing industrial loads,” said Bhattarai, the NEA spokesperson. “Growing adoption of electric vehicles will not significantly contribute to the increased power consumption. The biggest impact of adopting electric vehicles will be on the environment because they are based on clean energy.”