Nepal’s Electric Vehicle Dilemma: A Call for Consistency and Vision

As the world commemorated World Health Day on April 7th, the grim reality of air pollution in Kathmandu stood starkly evident. With the Air Quality Index (AQI) breaching the 300 mark, the city found itself among the most polluted urban centers globally. For residents, the air became not just a concern but a clear threat to their well-being, with each breath potentially carrying lethal consequences.

The immediate culprit this time was the smoke billowing from rampant brushfires raging across the nation. However, this acute episode underscores a chronic issue: the year-round menace posed by emissions from diesel and petrol vehicles. These vehicular emissions constitute a significant source of hazardous particles and noxious gases, contributing substantially to the air pollution crisis.

Yet, amidst these challenges, glimmers of hope emerge from the transition towards electric vehicles (EVs). The surge in sales of electric four-wheelers, now comprising one-third of Nepal’s total car imports, signals a promising shift. Particularly outside Kathmandu, where vans, microbuses, and three-wheelers are increasingly embracing electric propulsion, the momentum for change is palpable.

However, impediments loom large on the path to sustainable mobility. Despite the burgeoning demand for EVs, a hefty tax burden persists, hindering their widespread adoption. Last year witnessed a puzzling decision by the then Finance Minister Prakash Mahat to increase taxes on smaller EVs while reducing levies on luxury SUVs—an inexplicable move contrary to the imperative of combating pollution and promoting sustainable transportation.

As the baton passes to the new Finance Minister Barsha Man Pun, expectations soar, but so do apprehensions. With government revenues dwindling amidst import slowdowns, there’s mounting pressure to shore up finances, potentially at the expense of EV incentives. Yet, such short-term fiscal fixes risk derailing long-term sustainability goals, exacerbating rather than alleviating the environmental crisis.

Key stakeholders, including air pollution activists and industry leaders, emphasize the imperative for a coherent and science-guided approach to EV taxation. Bhushan Tuladhar, an eminent voice in the field, underscores the need for consistency and foresight, cautioning against knee-jerk reactions devoid of strategic planning.

Indeed, the benefits of electrification extend beyond environmental dividends to encompass economic and social gains. The electrification of mass transit, exemplified by initiatives like Sajha Yatayat’s electric bus fleet, holds immense promise. Yet, prohibitive taxes impede progress, rendering battery-powered buses significantly costlier than their diesel counterparts.

Moreover, the electrification drive presents a unique opportunity to curb Nepal’s dependence on petroleum imports—a fiscal and environmental imperative. Reducing petroleum consumption, even by a modest margin, could yield substantial savings, redirecting resources towards domestic priorities and green initiatives.

In this context, the role of policy coherence cannot be overstated. The erratic fluctuations in EV taxation undermine investor confidence and send conflicting signals to the business community. Ahead of the Nepal Investment Summit, such inconsistencies risk deterring much-needed investments in the burgeoning EV sector, perpetuating the status quo of pollution and dependence on fossil fuels.

At the heart of the matter lies a fundamental question of vision and political will. Nepal’s policymakers must transcend short-term revenue concerns to embrace a holistic strategy that prioritizes sustainability and economic resilience. As Manjeet Dhakal, a prominent climate expert, asserts, incentivizing electric buses is paramount—a strategic intervention capable of catalyzing systemic change.

Yet, the EV ecosystem extends beyond vehicles to encompass charging infrastructure, human capital, and supportive policies. Addressing these multifaceted challenges demands a concerted effort, with the public and private sectors collaborating to realize Nepal’s green mobility aspirations.

Moreover, the plight of electric taxis and two-wheelers underscores the urgency for comprehensive reform. Anomalies in registration and taxation undermine the viability of EVs, perpetuating a vicious cycle of market uncertainty and consumer reluctance.

In conclusion, Nepal stands at a critical juncture in its quest for sustainable development. The electrification of transportation offers a beacon of hope amidst the smog of pollution and economic uncertainty. However, realizing this vision demands not just rhetoric but decisive action—a commitment to consistency, coherence, and a future where clean air is not a luxury but a fundamental right.