On May 28, the Government of Nepal (GON) announced a 10 percent increase in customs and excise duty on the import of electric vehicles. The rise in customs duty was expected to dissuade prospective importers, but instead, the number of EVs imported increased significantly.

Before the tax increase, nearly 3,000 units of electric vehicles were imported in May. According to the Department of Customs, a total of 11,466 units of electric vehicles (cars, jeeps, vans) arrived in Nepal by mid-June of the current fiscal year.

In the 10th month (i.e., Baisakh) of the current FY, a total of 8,417 units of EVs were imported into Nepal, and within the next month, 969 units of electric vehicles were imported.

Out of the total number of electric vehicles that arrived in the current fiscal year, the number increased by 25 percent in June. In Baisakh, 1,404 units of electric vehicles were imported. In June and July, Nepal imported a total of 4,000 units of electric vehicles, according to the Statistics of the Customs Department.

The government also increased the tax on entry-level vehicles through the economic bill introduced on June 15, 2080. The bill arranged for a 10 percent customs duty on vehicles up to 50 kilowatts.

For EVs from 50 to 100 kilowatts, the customs duty was increased from 10 percent to 15 percent. A 10 percent excise duty was also imposed on vehicles of the same range.

The customs duty has been increased while reducing the excise duty for capacities above 100 kilowatts. The tax on EVs was further increased through the economic bill that came into effect on June 15, 2081. For EVs with 50 kW and 51 to 100 kW capacities, customs and excise duties increased by 5 percent each.

For EVs from 101 to 200 kilowatts, the customs duty increased by 10 percent, while the excise duty remained the same. For EVs from 201 to 300 kilowatts, excise duty was reduced, but customs duty was increased.

Imports of entry-level EVs were high before the tax hike. Among the EVs imported till May, 4,344 units were up to 50 kW, and 6,885 units were between 51 and 100 kW.

Additionally, 209 EV units in the range of 100 to 200 kilowatts were imported, while only 27 EVs in the range of 201 to 300 kW were imported, and one unit above 300 kW arrived.

According to the Customs Department, vehicles worth Rs 80 billion have been imported in the current fiscal year, of which EVs (cars, jeeps, vans) worth Rs 29 billion were imported. The government received revenue of Rs 13.6 billion from the import of electric vehicles.

Monthly Import Figures:

- July: 110
- August: 788
- September: 1,237
- October: 652
- November: 899
- December: 1,421
- January: 1,052
- February: 276
- March: 658
- May: 1,404
- June: 2,969