Traders complain of policy uncertainty, poor infrastructure in EV market

Nepal's burgeoning electric vehicle (EV) market faces significant hurdles, including policy uncertainty, inadequate infrastructure, and a thriving grey market for spare parts, according to automobile traders. These challenges are undermining the sector's growth despite increasing consumer interest and the expansion of charging facilities.

Traders point to the instability of EV taxes over the past four to five years, which has led consumers to anticipate and book vehicles early to avoid potential policy changes. Sahil Shrestha, CEO of Cimex Inc., noted that EVs now constitute 80-85 percent of passenger vehicle sales, partly influenced by disruptions in West Asia. The supporting ecosystem, with nearly 52 public and over 1,000 private charging stations, has grown considerably.

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EV taxes have been unstable over the past four to five years. Customers have now started to understand the pattern of changes in EV tax policy and have begun making early bookings to avoid possible tax changes.

However, infrastructure development has not kept pace with the increase in vehicle numbers. Ramhari Pokharel from the Ministry of Physical Infrastructure and Transport highlighted that only about 21,000 km of Nepal's 104,000 km road network is paved, with maintenance hampered by resource constraints and contracting issues. Problems are particularly acute on the northern trade routes used for imports from China, such as the Tatopani and Kerung routes, which face disruptions during the monsoon. Ritu Singh Vaidya of the Nepal Automobile Importers and Manufacturers Association stressed the need for government intervention to address systematic problems in customs clearance and transportation. Additionally, traders are concerned about illegal spare parts imports impacting legitimate businesses and government revenue.

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Problems on the Tatopani and Kerung routes emerge as soon as the monsoon begins. There are systematic problems in importing vehicles, from customs clearance to transporting them to warehouses. These problems need to be addressed by the government.