With government policies favoring the sales of 100kW electric vehicles (EVs) in the market, Nepali EV dealers are now importing more vehicles of this motor capacity. The success of NETA V in the market along with the government tax policy has forced EV dealers to go for 100 kW vehicles. First, Paramount Motors, the authorized dealer of MG Motors in Nepal, recently requested the Chinese manufacturer of MG to manufacture EVs below 100 kW. Now, Cimex Inc, the authorized dealer of BYD in Nepal has also started the process to import Atto-3. Paramount Motors, which logged strong sales in the last fiscal year, has been struggling to maintain that position following the government’s decision to change the customs tariff on electric vehicles (EVs) import. The company has been selling two variants of MG EV – 114 kW and 124 kW in the domestic market. With the new tariff structure, which came into effect in mid-July this year, importers of EVs above 100 kW capacity have struggled to sell the EVs.

The government levied excise duty on top of the existing customs duty on electric vehicles above 100 kW capacity. This, according to automobile importers, has made electric vehicles costlier for buyers. In the Finance Bill for the current fiscal year, the government has imposed a 30 percent excise duty on vehicles with 100-200 kW motors. Similarly, the government has imposed a 45 percent excise duty on importing electric vehicles with electric motors of 201-300 kW capacity. For vehicles with more than 300 KW motor capacity, excise duty has been maintained at 60 percent.

The data from the Department of Customs shows the import of up to 100kW EVs has increased by a whopping 371.42 percent in the current fiscal year. Nepali EV dealers have imported 990 units of 100kW EVs in the first four months of the current fiscal year. However, there has been a sharp decline in imports above 100kW. The overall market share of EVs was 3-4 percent in the fiscal year 2019/2020. It dropped significantly to one percent in FY2020/2021, due to the Covid-19 pandemic and revision in the taxation by the government. In FY2021/2022, the market share of EVs bounced to 7-8 percent. Automobile dealers predict that the overall market share of EVs by the end of the current fiscal year would be 20 percent.