EV Adoption in Nepal: Is Infrastructure Keeping Up With It?

When I'm on the road these days, I appreciate electric vehicles and occasionally try to count them, which is beyond my abilities. The proportion of private electric vehicles appears to be quite high within the valley, but the four-wheeled passenger electric vehicles fascinate me throughout the country. Transport companies and vehicle owners are transitioning to four-wheeler EVs from the eastern Koshi to the western Sudurpashchim, connecting Nepal's remote areas to nearby economic centers. One of my journeys along National Highways H14 and H15 from Dhangadhi to Dipayal and Dadeldhura is what I am sharing as an example here.

The scenic beauty along the way was captivating, but what stood out most was the presence of public electric vehicles (EVs) on this route. Dhangadhi, a key hub in the far west, is where 14-16-seater EVs are increasingly replacing traditional internal combustion engine (ICE) vans. Based on my observations, approximately 60% of four-wheeler public passenger vehicles traveling from Dhangadhi to nearby major cities are now EVs, and nearly 80% of newly purchased vans are electric. The Government of Nepal has set a target to have 20% of all four-wheeler public passenger vehicle sales electrified by 2025 in the Second NDC, which is expected to rise to 60% by 2030. This shows that the target for four-wheeler public passenger vehicles by 2030 has already been achieved, especially along this highway, where this category of transport is transitioning rapidly. However, significant changes are still needed, and substantial challenges remain ahead.

Figure 1: Charging facility at Budar, Doti

Charging Infrastructure Challenges

The availability of charging stations remains limited. EV operators often have to wait at least 30 minutes to hours to recharge, with charging stations being overcrowded. This shortage of charging infrastructure could become a significant obstacle to wider EV adoption, especially as the majority of vehicles have yet to transition to electric. This raises the question: What is the government doing, and where is the private sector?

Figure 2: NEA Charging Facility at Dhangadhi (One connector was not working)

The Nepal Electricity Authority (NEA), the government agency in charge of overseeing charging facilities, has established 51 fast-charging stations nationwide. In addition to setting up charging stations, it extends the grid line to facilities developed by the private sector and supports transformers of up to 200kVA. This means that if a private sector facility requires a larger transformer, the facility must purchase it independently.

Figure 3: PK Charging Station at Chatakpur, Dhangadhi (Private)

The private sector has established more charging stations than the NEA, though these are still limited in number. The economic advantages of electric vehicles for operators indicate a growing market and overuse of existing facilities. This presents an opportunity for the private sector to profit, but the question remains: If there is demand and a viable business opportunity, why isn't the private sector stepping in? Are we failing to connect the dots here?

Financial Challenges for Charging Stations

In Nepal, the Consumer Protection Act limits businesses to a maximum profit margin of 20%, and this regulation also applies to electricity sales by charging stations. Since electricity sales are the primary and only source of income for these facilities, the question arises: Is it financially sustainable for charging stations to operate under this restriction?

The simple answer is "NO." Relying solely on that margin leads to significant losses. That's why we often find charging stations located near restaurants along highways, where they charge higher prices. From my experience, they charge almost twice the government-set price, as vehicles are billed based on the percentage of the battery charged, rather than the units consumed. This creates a problem. If we expect these facilities to adhere to government regulations, they may be forced to close. So, what could be the solution?

Proposed Solutions

One solution is to allow charging stations to charge a nominal service fee, but this would increase the burden on EV operators. Therefore, the government needs to step in. It could remove the 10% customs duty and subsidize VAT on EV charging units. Additionally, the NEA should lift the 200kVA transformer limit, as there is a clear need for larger and more advanced charging facilities, along with a centralized CMS. Development partners could collaborate with the government and NEA to support these facilities through project grants.

Electric mobility is the need of the country, and to ensure a smooth transition to it while meeting our net-zero emission goals, comprehensive government planning and support are essential.

Mr. Subedi is a renewable energy engineer at Quasar Energy Consultants Pvt. Ltd. and oversees the EV charging station projects.