Clearing Air In Nepal Through Promotion of Electric Vehicles

The transport and industry sectors of Nepal principally rely on fossil fuel for meeting energy demand. The usage of fossil fuel has various environmental and economic implications- contributes to the net CO2 emissions in Nepal, pollutes ambient air quality, billion of rupees lost to the nation on importing fossil fuel and rising energy insecurity for the country.

In this connection, the promotion and use of electric vehicles (EVs) appears as a convincing option to reduce transport sector emissions and dependency on imported fossil fuel because of obvious reasons - EVs utilizes locally produced clean and renewable hydropower and it’s totally emission free, environment friendly technology.

The government and other relevant stakeholders such as I/NGOs, donors and private sector have taken some positive steps to boost EVs sector in Nepal. However, more actions are needed if we are really committed to promote sustainable transport system in the country.

Electric vehicles are one of the most suitable means of transportation for Nepal. With a little bit of government support the EV industry can flourish and become a model for clean urban and rural transportation. There are already good government policies but it needs to be translated into real actions. We urge the government to take the following steps to promote EVs in Nepal:

Recommended medium/long policy guidance to reduce dependence on fossil fuel in the Transport sector
· Revive and Operate the existing trolley bus system in partnership with the private sector;
· Construct the necessary infrastructure to expand the trolley bus system around Ring Road and other parts of country;
· Focus on electric based transport system such as electric train, ropeway, trolley bus;
· Support research and development in the field of EVs to make them more competitive and expand niche markets.

Recommended Immediate Changes in the policy
· Reduce night time tariff on electricity for EVs;
· Provide special routes to EVs in Kathmandu Valley and encourage local government to introduce EVs as means of city public transport system;
· Government should allow to convert old gasoline vehicles into electric system and for this purpose devise standards and guidelines;
· Ease the procedures of registration for two wheeler electric cycle and e-bike;

Recommended Changes in the upcoming Budget
· Zero excise duty, Zero Vat on retail price and 10 percent import duty for imported EVs (two, three, four wheelers) for private use;
· Zero excise duty, Zero Vat on retail price and 5 percent import duty for imported EVs (two, three, four wheelers) for public use;
· Zero excise duty on locally manufactured EVs (two, three, four wheelers);
· Currently, the local EVs manufactures are provided with custom duty and other tax exemption on production of three wheelers but these facilities are not applicable for production of four wheelers. The government should provide similar tax exemption to four wheelers as well.
· Four wheeler electric vehicles should not be required to pay annual vehicle tax.