EV sector in dire need of policy stability

Kathmandu, May 4

Although there is an annual growth of 69 per cent in two-wheelers and growth of 43 per cent in private passenger vehicles in Nepal, there is no policy for charging infrastructure and promotion of electric vehicles.

About 1540 passenger vehicles were sold in 2021/22 which grew to 2416 in 2022/23. Likewise, the number of two-wheelers sold increased to 7296 this year from 2721 last year.

“Despite the current economic challenges faced by various businesses, the electric vehicle (EV) sector has exhibited growth. One of the major reasons for this growth is the duty benefit,” Vice President of NADA Automobile Association of Nepal, Rajan Babu Shrestha, said at an interaction on ‘Electric Mobility: Suggestions for policy and budget of FY 2022/23’ organised by Nepal Association of Financial Journalists (NAFIJ) in collaboration with NADA. 

Meanwhile, there is a growing demand for infrastructure like charging stations across the country to promote the use of EV which has the potential of reducing the trade deficit by decreasing the import of fossil fuel. As per the recent statistics of the Department of Customs, the country’s total exports are enough just to cover 45 per cent of fuel import.

By the end of the ninth month of the current Fiscal Year 2022/23, Nepal exported goods worth Rs. 118.27 billion and imported petroleum fuel including diesel, petrol and liquified petroleum gas worth Rs. 261.09 billion.

Therefore, businessmen have emphasised that the government should adopt a stable policy to promote and develop electric vehicles in Nepal. They said that there should be policy stability to encourage electric vehicles.

Shrestha said that the government should take a clear policy on this issue as e-mobility is the future. "The government has set a target of increasing the number of electric vehicles to 25 per cent of the total number of private vehicles plying in Nepal by 2025.”

"However, due to the fluctuations in customs duty on electric vehicles in each year's budget, the consumers couldn’t be assured. Similarly, this up and down in tax rate has also created confusion on the part of businesspeople as well,” he said.

Shrestha emphasized that the next budget should have an electric vehicle-friendly policy. According to him, currently there are DC chargers at 58 locations and AC chargers at 300 locations in Nepal to charge electric vehicles.

Meanwhile, Nepal Electricity Authority (NEA) has put 40 DC chargers into operation. Even though the highway has a station at a distance of 100 km, it is still insufficient. Electric vehicles should be used more to increase the consumption of electricity which is being wasted, said Yamuna Shrestha, central member of NADA. She said that the government policy on EV should be stable for at least 3 years in order to promote the use of it.

According to experts, the battery and range anxiety among consumers is also decreasing in Nepal recently. "Until a few years ago, it was compared to fuel-powered vehicles, but now the trust of EVs is increasing among consumers," said Sagar Gyawali, an engineer of the NEA. According to him, the electric vehicle market will grow if the customs rate were reduced even though there is not a clear policy for the time being.

Similarly, Nepal Oil Corporation’s Deputy Director Manoj Kumar Thakur said there is a need for more coordination with the NEA to have charging stations at petrol pumps.

"There should be a standard for placing charging stations at petrol pumps. NOC is for whatever support is required for placing charging stations," he said.

Similarly, the Director of Internal Revenue Department, Raju Pyakurel, said that although the tax is being collected as prescribed by the government, reducing the tax rate on EVs will also benefit the country's economy and the environment. "Following the global trend, Nepal should also need to adopt a policy to encourage electric vehicles," he said.

Director of the Department of Transport Management, engineer Ram Chandra Poudel, said that the government should invest and subsidise electric public transportation system. According to him, the department would recommend the government for the same as well as to create battery recycling policy.

Poudel also said that the fare of EV could come down in future.

 

Minister Jwala commits to prioritise EV

Minister for Physical Infrastructure and Transport, Prakash Jwala, said that he would give priority to the promotion and development of electric vehicle (EV) in the upcoming budget.

“It is the responsibility of the government to promote the EV in order to have benefits in environmental, economic and trade aspects. I will try to give it a priority in the budget of the Fiscal Year 2023/24,” he said while addressing the programme.

Charging stations are being built at 60 to 70 kilometers of the national highway in joint collaboration between the Nepal Electricity Authority and the private sector.

In this situation, the government is committed to promoting the use of EVs. According to Minister Jwala, the government will make future policies and programmes and budget by keeping electric vehicles and immobility as a priority.

Meanwhile, he also expressed concerns about the decreasing budget in the infrastructure projects and committed to end the current impasse in the construction sector. “There is a situation where neither progress is achieved nor contract with the contractor is scrapped. This indecision should be ended,” he said.

Stating that the construction sector has become ‘sick’ due to various reasons, he vows to address it through policy, improved process and staff deployment. 

Published in The Rising Nepal daily on 5 May 2023.