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In this small country, 76% of new cars are electric, and it’s not in Europe

Published by Vadym Karpus

While the focus is on the development of electric vehicles in the United States, Europe, and China, Nepal has quietly overtaken almost all other countries in terms of the pace of transition to electric transportation.

In the last year alone, 76% of new passenger cars and 50% of light commercial vehicles sold in Nepal were electric. For comparison, the global average is about 20%.

The New York Times published a detailed study on how the country achieved this breakthrough. The key factors are a large share of hydropower, sound tax policy, the development of charging infrastructure, and the influx of affordable Chinese electric vehicles.

Energy and government policy

Electricity in Nepal is mainly generated from the rivers of the Himalayas, so it is not only clean but also local. After the fuel crisis with India in 2015, the country decided to rely on hydropower. This helped to overcome the constant rolling blackouts that had been plaguing the country for years. Today, there is a surplus of electricity — it is cheaper to use it for transportation than to continue importing fuel. Many countries have similar energy resources but have not utilized them as effectively as Nepal.

To accelerate the transition to electric transportation, the Nepalese government has significantly reduced import taxes electric vehicles — up to 40% (compared to 180% for cars with an internal combustion engine). As a result, Hyundai’s electric crossover in Nepal costs less than its gasoline version.

The infrastructure is also developing rapidly. The government has installed 62 charging stations, and hundreds more have been opened by private companies and households. Today, charging an electric car is about 15 times cheaper than refueling a car with gasoline.

Wide range of electric vehicles

Chinese manufacturers, in particular BYDquickly conquered the Nepalese market. Yamuna Shrestha — a former solar equipment distributor — became the exclusive representative of BYD in Nepal and has already opened 18 dealerships. She plans to sell 4000 electric vehicles in 2025.

«People are getting Tesla-level cars for half the money», — says the local Suzuki dealer.

He adds that Indian brands cannot compete in terms of price or equipment. Today, dozens of Chinese companies are competing for market share in Nepal, further accelerating the transition to electric cars. This has given a significant boost to the country’s automotive sector, which has remained quite small until now.

Although Nepal is a fairly small country, it is still impressive that a few Chinese automakers can change the entire automotive market in less than 5 years. From no electric vehicles to almost exclusively electric vehicles in about 5 years.

The effect of the transition to electric cars has already been felt by ordinary residents. For example, former police officer Jit Bahadur Shahi bought an electric minibus for about $33 thousand. He only needs to make 10 trips a month between Kathmandu and his hometown to pay off the loan. In 4 years, the vehicle will be fully owned by him.

Risks of electrification

Despite the rapid development, challenges remain: charging infrastructure is not yet widespread. But the government not only creates the conditions for its development, but also actively invests in infrastructure expansion.

Progress towards transport electrification may be slowed down by political instability. The country has had three prime ministers in the last 5 years. This year, import duties have started to rise, and there is no clear state plan for battery recycling or safety standards.

«If the incentives disappear, the market will return to gasoline», — warns Rajan Babu Shrestha, distributor of Tata Motors in Nepal.

Despite the active adoption of electric vehicles among private owners, the majority of Nepal’s population uses public transportation and motorcycles, which remain mostly gasoline-powered.

The state-owned operator Sajha Yatayat operates 41 electric buses and plans to expand. China has even offered to donate another 100 vehicles. However, experts estimate that at least 800 electric buses are needed to upgrade Kathmandu’s transportation system.

Nevertheless, Nepal demonstrates that even a small country with the right energy balance, smart government policies, and openness to the foreign market can make a leap into the future of electric mobility. Its example can serve as a model for many other countries that have access to clean energy but have not yet stepped up their efforts to switch their transportation to electricity.

Source: electrek

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