This country quietly became an electric haven with EVs now having 76% market shares
While most headlines focus on EV adoption in the US, Europe, and China, Nepal is quietly outpacing almost every country on Earth when it comes to electrifying its roads.
In the last year alone, 76% of new passenger vehicles and 50% of light commercial vehicles sold in Nepal were electric compared to a 20% global average.
How did we all miss Nepal’s electrification story?
TL;DR: The New York Times has released a fascinating new report that tells the little-known story of Nepal’s electrification. The country’s aggressive EV shift is the result of a perfect storm: abundant hydropower, smart import tax policy, growing infrastructure, and a wave of affordable EVs from China. Advertisement - scroll for more content
Cars powered by rivers, not oil
Nepal’s power grid is fed by rivers flowing from the Himalayas, making electricity clean and locally sourced. A 2015 fuel crisis with India prompted a national pivot to hydropower, helping to end the rolling blackouts that plagued the country for years. Now, electricity is abundant—and it makes more economic sense to use it for transport than to keep importing petroleum.
There are many countries in somewhat similar situations, but most of them have not embraced electric transport as much as Nepal.
To accelerate the transition, the government slashed import taxes for EVs to as low as 40% (vs. 180% for ICE vehicles). The result? A Hyundai electric SUV now costs less than its gas-powered counterpart.
Charging infrastructure is growing fast too: 62 public stations installed by the government, with hundreds more by businesses and homes. At current electricity rates, charging an EV costs roughly 15x less than refueling a gas car.
China dominates EV surge as dealers pivot
Chinese automakers like BYD are rapidly taking over the market. Originally a solar equipment distributor, Yamuna Shrestha became Nepal’s exclusive BYD dealer and now operates 18 dealerships. She expects to sell 4,000 vehicles in 2025.
“Consumers are getting Tesla-tier vehicles at half the price,” said one local Suzuki dealer, noting that Indian brands can’t keep up on cost or features. Dozens of Chinese brands are now competing in Nepal’s EV market, pushing the transition faster.
The electric transition created a lot of opportunities in the country’s relatively small automotive.
EVs work for everyday drivers in Nepal
EVs are already paying off for everyday Nepalese. Jit Bahadur Shahi, a retired police officer, purchased an electric minibus for approximately $33,000. Just 10 round trips a month between Kathmandu and his hometown cover the loan payments. He expects to own it outright in four years.
Still, challenges remain: charging infrastructure isn’t everywhere, but the government is investing in expansions to make sure the infrastructure grows with the rapidly growing EV fleet.
Political instability could slow things down.
While a success story, especially for a developing country, Nepal could find it difficult to reach near 100% EV sales in Norway amid some political instability.
Despite the momentum, policy backsliding could derail progress. Nepal has had three prime ministers in five years. This year, tariffs are creeping back up. Meanwhile, there’s no national plan yet for battery recycling or vehicle safety standards.
“If incentives disappear, the market could shift back to gas,” warned Rajan Babu Shrestha, Nepal’s Tata Motors distributor.
Public transit is the next step
While private EV adoption is booming, most of Nepal’s population relies on buses and motorbikes, which remain mostly fossil-fueled.
State-backed bus operator Sajha Yatayat runs 41 electric buses and plans to expand. China recently offered to donate 100 more, helping to build a clean transit backbone. However, experts say that at least 800 electric buses are needed to truly shift mobility in the Kathmandu Valley.
Scooters and two-wheelers also need to go electric, but adoption there lags behind neighboring India.
“We are trying to reduce fossil fuel vehicles in my town,” said Lalitpur mayor Chiri Babu Maharjan in the NYT story. “This is very difficult, but we must do something.”
Electrek’s Take
Nepal’s EV story is unique, but there are also many similarities with other markets, making it potentially replicable. By tapping into its clean energy, embracing Chinese EV supply, and creating the right incentives, the country has leapfrogged most markets in EV adoption.
Again, I understand that it is a fairly small market, but it’s still impressive that a few Chinese automakers can change the entire auto market of a country in less than 5 years.
From no EVs to almost only EVs in about 5 years.
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