The Nepal Automobile Dealers’ Association (NADA) has expressed serious concern over the Nepal Rastra Bank’s (NRB) decision to cap the loan-to-value (LTV) ratio at 60% for all types of personal and electric vehicles in its mid-term review of the Monetary Policy for FY 2081/82.

NADA has been lobbying for an increase in the LTV ratio for petrol and diesel vehicles from 50% to 75% to revitalize Nepal’s struggling automobile sector.

While NRB’s revised policy is seen as a positive step for conventional vehicles, the association believes it will significantly impact the electric vehicle (EV) industry.

The government has long prioritized green energy, providing special incentives for EVs.

However, the latest monetary policy review appears to contradict this approach. NADA warns that the new LTV cap will reduce EV adoption, affecting both consumers and businesses investing in the sector.

NADA has urged NRB to reconsider its decision and reinstate the previous 80% LTV ratio for electric vehicles to align with the government’s commitment to sustainable transportation and protect existing investments in the EV market.