“Since transportation contributes a significant amount of Nepal’s total greenhouse emissions, a shift to electric is essential to achieve the country’s goal of being carbon-neutral by 2050,” says Radha Wagle, Chief of the Climate Change Management Division under the Ministry of Forests and Environment.
Electric Vehicles are initially more expensive, but in the long run not are not just less-polluting, but will also help improve Nepal’s balance of trade deficit with India. While production and battery cost of electric bus makes them more expensive than a new diesel bus of the same capacity, running costs, maintenance and repairs means that for every kilometer travelled, an electric bus will be Rs14 cheaper to run.
“The operational cost of a diesel bus is high,” says Tuladhar, who is also a board member of Sajha Yatayat, where 40% of the running cost is diesel. “If we switch to an all-electric fleet, we will have significantly lower costs that will let us provide better service. But because of the higher initial investment necessary, a government subsidy is necessary for the purchase of electric vehicles.”
In this year’s budget, the government reinstated tax rebates on electric vehicles which now makes their cost comparable to 4- and 2-wheelers of the same capacity. However, the capital cost of electric buses is still more than double the cost of diesel-run buses, which is why further subsidies are needed. The government can easily recoup the lost tax revenue from reduced petroleum import bills, experts say.
NEVI’s Shrestha agrees that government subsidies would inventivise buyers for electric vehicles, and also setting up charging stations across the country.
Among all registered vehicles in Nepal, nearly 80% are privately owned two-wheelers, but they contribute only 8% to total emissions from transportation. Trucks and public buses emit 57% of CO2.
The demand for electric vehicles is highly sensitive to government policies. With the taxes imposed in 2020, the import of electric vehicles in the first 5 months of the fiscal year at the start of 2021, declined by 88% compared to the previous year. However, sales are expected to pick up again after the tax reversal. Electric rickshaws are gaining popularity in the Tarai, with over 26,000 registered –- making up 0.82% of all vehicles in the country.