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EV policy cudgels Nepal's Economy, Climate and Reputation



A wise man once said "I am looking forward to the day when Nepal gains reputation as the country of clean energy.". The wise man was Nepal's PM KP Sharma Oli in 2018. It's 2020 and the wisdom seems to have withered away.

Nepal’s 2020-2021 budget and its policies turned out to be the talk of the town. The decision to levy heavy taxes on Electric Vehicles (EV) was a revelation in the truest sense. This comes in sharp contrast to the commitment made by PM Oli in 2018 where he vowed to convert 20% of Nepal’s public vehicles to Electric. The heavy increase in taxes on the EV will only dissuade potential EV buyers and the already stale EV market of Nepal will unlikely see any bustling.

However, the concerns are not limited to sales of EVs. The government’s decision has implications unfavorable to Nepal’s economy and the climate. It is also going to jeopardize Nepal’s reputation at the global stage and you will see why as we present you with our arguments.


 Unfavorable to Economy

Nepal imports petroleum fuel from India in a huge quantity and it has only increased in recent years. According to the Department of Customs, Nepal imported petroleum fuel worth NRs. 215 billion in 2018-2019 which amounts to a little over 14 % of Nepal’s total expenditure on Imports. This astronomical figure has only contributed to an ever increasing trade deficit. We could bring this dismal figure down if we switch from petroleum based fuel to Electricity. That’s where EVs play an important role.

Since EVs consume electricity, an increase in its number would gradually replace the petrol and diesel run vehicles. This in turn would decrease the demand of petroleum fuel and subsequently its supply will falter as well which would result Nepal spending less on imports.

Concurrently, Nepal’s growing Electricity production needs a market and placing a large number of EVs on Nepal’s roads will generate a huge revenue for the country. Nepal is set to add about 1600 MW to its electric grid and this has to be capitalized. If Nepal doesn’t lay the groundwork for a market favorable to consumption of Electricity, adding additional Mega Watts to its National Electricity grid would be of little use.


Unfavorable to the Climate

Much ink has been spilled on why we need to reduce the carbon footprints.  World is witnessing a climate change detrimental to humans and other livings and the usual suspects are the greenhouse gases. The air is polluted to a level far beyond recommended standard. The burning of fossil fuel is the major source of the inconvenience being caused. If we clamp down our fossil fuel consumption, we are bound to reduce emission of the greenhouse gases. It is the petroleum based vehicles which forms the majority of the machines consuming fossil fuel. The lesser we use them the better we get but compromising mobility would offer no solution and this is where EV presents an alternative as it produces zero emission.

Let us first see how the use of fossil fuel based cars, bikes, and buses have deteriorated the air quality of the Kathmandu Valley. The average concentration of PM2.5 for the Kathmandu Valley was 135.4 micrograms/m3 whereas for PM10 it was 54.6 micrograms/m3 before the lockdown. The lockdown due to the pandemic necessitated the closure of almost all the transport system. The roads which were previously jammed up with cars were close to empty but at the same time the quality of air increased dramatically inside the Kathmandu valley.  The PM2.5 level and the PM10 levels registered sharp decline after the commencement of the lockdown. The average concentration of PM2.5 was 108.3 micrograms/m3 and for the PM10 it was 42.2 micrograms/m3.

EV produces no greenhouse gases nor leaves any harmful impurities in the air. Therefore, for people to breathe fresh and clean air, it is necessary to get rid of fossil fuel run vehicles by replacing them with the zero emission EVs.


Jeopardizing Nepal’s reputation at Global stage.

At the Paris Climate conference of 2015, Nepal agreed to commit to its Nationally Determined Contribution (NDC). Converting 20% of Nepal’s Public Vehicle into electric was one of its policies in a larger aim to reduce the carbon footprints.

Coincidently, the present Prime Minister KP Sharma Oli was heading the government at the time of Paris Climate Conference and it was he who vowed to fulfill its NDC goals in 2018.

However, the action speaks louder than words and the present policy is bound to besmirch Nepal’s image internationally. What has been done is exactly opposite of what  was promised.


Probable Cause for the Government’s U turn

Notwithstanding the Government's defense of its policies, it would be safe to assume that Political parties have had strong ties with more established business communities and often decisions have been made to bring monopoly to a particular established business. To put into clear words, a nexus between the bureaucrats, politicians and the business community exists.

Any policy to prop up the sales of EVs would have put the dealers of fossil fuel vehicles at peril and therefore our suspicion runs high on them. As the use of zero emission vehicles was gradually emerging into a fashion, the fossil fuel run vehicles were slowly put down for no use. People were realizing the importance of a zero emission vehicle as the campaign to go green has gained momentum worldwide. Therefore, to save itself from incurring any heavy losses the lobbying must have gone at depth and it is precisely because of this reason we believe the government has gone for a U turn.  

Though we are just conjecturing on purely a circumstantial evidence, we fail to find other justifications believable.



Even though the government has met with a very harsh criticism for formulating policies, it has shown no remorse. The government has run backwards on its commitments and put the future of the Economy, the Climate and Nepal’s reputation at stake.

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