Nepal’s EV Imports Decline as Fuel Vehicle Demand Rebounds

Nepal's automobile market witnessed a significant shift in the last fiscal year, with imports of electric four-wheelers declining even as demand for internal combustion engine (ICE) vehicles rebounded. According to the Department of Customs, the country imported vehicles worth Rs. 103.64 billion, highlighting the transport sector's continued dependence on foreign imports. Imports of electric four-wheelers fell by nearly 12%, dropping from 17,381 units in the previous fiscal year to 15,171 units. Industry stakeholders attribute the slowdown to frequent revisions in EV tax policies and the slow expansion of charging infrastructure, which have affected consumer confidence. Despite the decline in volume, EV imports worth Rs. 34.24 billion generated Rs. 21.61 billion in customs revenue. In contrast, Nepal saw a strong recovery in the market for fuel-powered vehicles. Imports of petrol and diesel-powered motorcycles and scooters increased by around 50,000 units, with more than 250,000 two-wheelers entering the country during the fiscal year at a cost of Rs. 33.07 billion. Electric two-wheeler imports also nearly doubled, rising from 14,000 to 27,000 units, although they still account for only a small share of the overall market. The government collected Rs. 72.83 billion in customs revenue from vehicle imports during the year. While rising imports of commercial vehicles suggest improving activity in the construction and transportation sectors, economists note that Nepal's growing reliance on imported vehicles continues to widen the trade deficit and underscores the need for more stable EV policies and greater investment in sustainable transport infrastructure.