ELECTRIC VEHICLES STILL TOO EXPENSIVE

By Rebati Adhikari

Nepal has a long history of electric means of transportation. Dhorsing-Matatirtha ropeway, Hetauda-Kathmandu ropeway, Kathmandu-Bhaktapur trolley bus are some examples from years ago, however rendered dysfunctional now. However, today Nepal moves on oil imported from across its borders. A heavy reliance that finds the country in throes of fuel crisis every now and then. The answer would be to turn to electric vehicles, but such is not the case.

In the fiscal budget 2016-17, custom duty on electric vehicles went down to one percent and excise duty was exempted on large electric vehicles used for public transportation. Private electric vehicles are also exempt from paying excise duty and need to pay only 10% custom duty against 30% in the past years. Electric vehicles need not pay vehicle tax either. They also get 50% waiver on road maintenance tax. But in spite of these subsidies offered by the government, electric vehicles have not gained popular use in Nepal.

Experts point to cost competitiveness, lack of required infrastructure for electric vehicles like charging stations and product appeal. General Manager of Hulas Motors, Prafulla Chandra Das says, “To promote the use of electric vehicles, the market demand needs to be higher, and collaboration between auto companies and government needs to sit well.” Marketing Manager of Agni Inc. Sijan Neupane says, “EVs can’t give more mileage and people are yet to get used to it. The price range is still beyond the purchasing power of people”.

The environment-friendly vehicle and transport policy 2071 states that the government will promote the development of infrastructure like charging stations in collaboration with private partners. It has also promised to formulate plans on management of eco friendly batteries and promote the use of eco friendly vehicles. Among many plans, conversion of unused government vehicles to electric vehicles, making environment-friendly vehicles 20% of the total transportation by 2020 are on the cards. But its implementation is moving at a tardy pace. “The government just gives rhetoric, they have made policies but the action plan, directives necessary for its implementation has not yet been devised, neither is there any infrastructure. Our government lacks long term vision and homework. There are vehicles which cover maximum distance of 400 kms but there is no infrastructure for its promotion,” states Umesh Shrestha, President of Electric Vehicles Association of Nepal. To this, Rajendra Raj Sharma, Joint Secretary of Ministry of Physical Infrastructure and Transport informs, “Under the Ministry of Environment and Population, an INGO is studying the prospects of EVs. Further tasks will begin only after we receive the report”.

India has planned to emerge as a 100% e-vehicle nation by 2030 and is working towards it. Likewise, our northern neighbour, China is leading the e-mobility index in global electric vehicle development. Other countries like US, Norway, Germany are also introducing various plans to promote mass adoption of electric vehicles. “The government says EVs need to be promoted but execution is lacking. Ministry of Finance holds rupees four billion in its reserve, the amount collected as pollution tax, why don’t they mobilize it to develop the infrastructure for EVs?”questions Shrestha.

Government incentives are available and loan limit for electric vehicles is set at 80% against non-electric vehicles (65%); nevertheless, EVs have failed to lure masses. Here environment factor is the only strong determinant that could drive the growth of electric vehicles. They are still dearer than other mainstream vehicles. “Although operation cost turns out to be very much cheaper; EVs only need to gain trust from customers. Vehicle cost can come down only when there is more demand and more production,” opines Neupane. Bloomberg New Energy Finance has reported that the cost of lithium-ion battery, which is the top battery choice in EVs, has been halved in the past six years.

“Until now the discussion has been confined to infrastructure and mobility, but we need to be aware of self sustainability as well. It has been reported that a 700 fleet of safa tempos saved Rs 23 billion on fuel and reduced Rs 120 million tons of carbon emission,” states Shrestha.

Electric Vehicles Association of Nepal is doing a number of things to pave the way for EVs. It is lobbying with the government to provide subsidy on batteries. The life time of electric vehicle is requested to be extended to 30 years. “The market holds a promising future for EVs. With several incentives from the government and easy loan financing, the EV market will witness a surge in the future,” explains Das.

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