Growing use of EVs: Good for economy and environment

By Laxman Kafle, Kathmandu, Sept. 17:The use of electric vehicles (EVs) has, of late, been gradually rising in Nepal thanks to the customs subsidies on the import of EVs, improvement in electricity supply and ever-soaring prices of petroleum products.

Because of their low operating and maintenance costs and environment-friendly nature, EVs have become the choice of the customers for the past few years. 

It is evident from the import of 6,100 four-wheeler electric vehicles in the last three years. 

According to the statistics of the Department of Customs, in the fiscal year 2020/21, a total of 249 four-wheel electric vehicles (cars, jeeps) were imported while 1,800 four-wheeler electric vehicles (car, jeep) were imported in the fiscal year 2021/22 and 4,050 in the fiscal year 2022/23.

Likewise, Nepal imported 9,790 electric two wheelers and 50 buses in the last three years. Around 6,914 assembled three-wheeler EVs and 459 unassembled three-wheeler EVs were imported in the fiscal year 2022/23. 

Similarly, around 6,400 three-wheeler EVs were imported in the fiscal year 2021/22 and 4,250 three-wheeler EVs in 2020/21.

The improved supply of electricity in the country and the concession on the tariff on charging EVs by the Nepal Electricity Authority have also contributed to the increase in the import and use of electric vehicles.

However, it took almost half a century since Nepal first brought the electric buses (trolley buses) into operation along the 13 km road from Tripureshowr in Kathmandu to Surya Binayak, Bhaktapur. 

For the first time, Nepal brought 22 trolley buses into operation commercially in 1975 with the help of China. Later, in 1997, 10 more electric trolley buses were added. But these buses could not survive the mismanagement and corruption that thrived in the country after the 1990s. They are now things of the past as no trolley bus is in operation any more. 

Similarly, Safa Temo, a battery-powered three-wheel public transport vehicle, was introduced in Kathmandu in the mid-1990s with the support of the Global Resources Institute (GRI) and the United States Agency of International Development (USAID). Later in 1996, Nepal started manufacturing and operating Safa Tempo on commercial level.

In 2000, more than 600 Safa Tempos used to ply along the Kathmandu roads, which was said to be the world’s largest electric vehicle service at that time.

After the shutdown of trolley bus service, Safa Tempos were the only electric vehicles in Kathmandu. 

However, of late, electric scooters, motorcycles and cars have started making their visible presence in the city roads. Outside the valley, City Safari, a three-wheeler, run by electricity is also on the rise in many towns.

President of Electric Vehicle Association of Nepal (EVAN) Shyam Sapkota said that the attraction of consumers towards the electric vehicles in the market is growing.

“The EV market is expanding and one new brand of EVs is being launched after another in the local market. There is a competition among the companies to introduce new brands,” he said.

“The operation cost of EVs is at least 10 times lower based on the brand and capacity than petrol/diesel powered vehicles. It is also highly beneficial in terms of the national economy as a huge amount for the import of fuel can be saved.

To further encourage the use of EVs, NADA Auto Show at Bhrikutimandap, which began on Tuesday, has put a large number of electric vehicles on display. 

EV, a means to save, nothing to lose

Laxman KC, who has started operating electric taxis for the past two and a half months, said that compared to petrol/diesel vehicles, electric vehicles are better in terms of operation and maintenance costs and environment.

According to him, the monthly income from an electric taxi is significantly higher than from a petrol-powered taxi.

“Driving an electric taxi for about 100 kilometres costs only Rs. 150-200 per day. When driving a petrol taxi, it costs over Rs. 1,500. Therefore, the operating cost of electric taxis is very low,” he told The Rising Nepal.

He said that he used to spend over Rs. 35,000 for fuel while operating a petrol-powered taxi monthly. But, now around Rs. 5,000-Rs. 6,000 is enough, he added.

“The company has arranged for free servicing for three years. It is also beneficial in terms of maintenance cost. However, we have to spend more while replacing the battery after a few years,” he said.

He, however, said that initial investment in electric vehicles is almost double the petrol-powered taxi.

He said that he purchased an electric taxi at Rs. 3.7 million. The cost of a petrol-powered taxi is around only Rs. 2 million.

EVAN President Sapkota said that a huge amount of money could be saved indirectly by using EVs as the road tax charged by the government is comparatively low for EVs. 

Depending on the capacity of the electric vehicle, maximum annual road tax is Rs. 10,000. However, consumers have to pay up to Rs. 50,000 annually for petrol-diesel vehicles based on their capacity.

However, high initial investment in EVs compared to other vehicles has discouraged consumers from purchasing them.

Experts argued that electric vehicles are 10-15 times cheaper than those running on petroleum products. 

If the private and public vehicles running on petroleum products can be replaced with electric vehicles, a large amount of foreign currency will be saved in fuel purchase in the future, and it will also help reduce the trade deficit. 

Nepal is currently importing petroleum products worth above Rs. 300 billion annually.

The NEA is also promoting EVs by constructing charging stations on its own to increase the domestic consumption of electricity, reduce the consumption and import of petroleum products and to develop an environment-friendly transportation system, said Managing 

Director of NEA Kul Man Ghsing.

Stating that the country has entered an encouraging phase to increase electricity consumption, Ghising said, “In the past, when there was load shedding, 

we could not even imagine of electric vehicles. We have reached the stage of exporting electricity now.’’

Govt facilities for EV promotion

In the past, consumers thought that electric cars were expensive. However, since the government has imposed only 10 per cent customs duty on the lower range of electric vehicles, costs of these vehicles have fallen.

The customs concession provided by the government for the import of EV is not enough for its promotion, said Sapkota.

“The higher the tax, the more expensive the EVs. Nowadays, people of all classes are attracted to electric vehicles,” he added.

The government is currently imposing only 10 per cent customs duty on the import of electric vehicles up to 50 kW capacity.

According to the new arrangement in the budget, the customs duty on electric vehicles between 50 and 100 kilowatts has been increased by 5 per cent to 15 per cent. Apart from that, 10 per cent excise duty has also been levied. The high customs duty charged for 50 to 100 kW EVs has affected the customers because EVs of this category are suitable for Nepali customers, Sapkota said.

The customs duty of relatively expensive 100 to 200 kW electric vehicles has been reduced to 20 per cent. Excise duty also remains at 20 per cent. Earlier, both customs and excise duty stood at 30 per cent.

According to the new arrangement, both the customs and excise duty for 200 to 300 kW electric vehicles have been reduced from 45 per cent to 40 per cent.

He asked the government to impose only 10 per cent customs for the EVs with capacity up to 100 KW as well if the government really wants to promote them.

Different charges for different capacities

Energy charges vary according to time and voltage capacity. The energy charge is low in off-peak (11 pm to 5 am) compared to peak (5 pm to 11 pm) and other (5 am to 5 pm) times. The lowest energy charge is around Rs. 5.45 per unit in off-peak time and the highest at around Rs. 8.50 per unit in peak time (5 pm to 11 pm). The energy charge in normal time is around Rs. 6-7 per unit.

There is a provision that charging station operators can charge an additional 20 per cent per unit for providing charging services to EVs, Ghising said, adding that the NEA is going to remove this provision to encourage the private sector to invest in charging stations.  

The charging will cost an average of 70 paisa per km for cars, 80 paisa for SUVs, 90 paisa for microbuses and 120 paisa for buses. 

Ghising said that preparations are being made to adjust the electricity tariff to encourage private sector investment in charging stations. 

Meanwhile, banks are providing hire purchase loans up to 80 per cent of the value of electric vehicles which is also directing people towards EVs.

Speed of EV charging station

There is still confusion among people who purchase EV due to the problem of charging stations while travelling long distances. Now, this problem is gradually being solved as the private sector and the NEA itself are constructing charging stations across the country.

The Authority has already constructed 51 charging stations in various places to further encourage EVs. The construction process of 11 more charging stations has been forwarded, said the NEA.

Out of the total charging stations constructed at a cost of around Rs. 400 million, big buses, micros, trucks and cars can be charged in 26 charging stations and small and big cars can be charged in 25 charging centres, said the NEA.

Similarly, according to the policy of promoting the private sector, more than 100 charging stations are installed in different places of the country. “We must encourage all petrol pump operators to install charging stations on their premises,” Ghising said.

The private sector should be gradually encouraged to operate charging stations, he said. 

The NEA said that arrangements have been made to build the electricity transmission line to the charging stations and to provide electricity up to 200 kVA from the Authority’s transformers.

The power utility has adopted a policy of buying only electric vehicles for urban areas. The NEA has forwarded the programme to convert even petrol and diesel vehicles into electric ones.

Promote big EVs for public transportation

Even though the demand for electric cars is growing, entrepreneurs are still reluctant towards operation of electric public vehicles, Sapkota said.

“Buying a big electric bus costs around Rs. 15 million to Rs. 20 million. Therefore, even though there are many benefits in operating big electric buses, businessmen are not able to operate such buses due to large volume of investment,” he said.

Around 400-450 electric public vehicles, including vans, are operating on Sindhuli road at present. Only a few big electric buses for public transportation are operating in the country. Sajha Yatayat is operating around 40 electric public vehicles and Sundar Yatayat is operating only five to seven public buses.