IMAGE: NIRANJAN SHRESTHA
THE WORLD’S most unlikely electric‑vehicle pioneer is not California, not China, not even Norway. It is Nepal. In 2025 EVs made up 73% of new passenger‑car sales, a share that only the fjords‑and‑fjords crowd can beat. A country with a per‑capita income of $1,447 has pulled off a green‑technology leap that richer places only promise. The reason is as clever as it is brutal: tax a petrol car at 247% of its value, tax an EV at 30% and make electricity cheap from all those hydropower dams. The consumer does the rest. The trouble is that while Nepal has electrified its fleet at breakneck speed, it has barely touched the deeper mess of roads, grids, congestion and public transport. It is replacing engines without rethinking mobility. That is a problem.
The policy that drove the boom is a marvel of unintended consequences. Petrol now costs the equivalent of $4.50 a gallon in a poor country. An EV can run for one‑fifteenth the cost per kilometre. For a taxi driver in Kathmandu, the maths is irresistible: charge overnight for a few hundred rupees, earn thousands. The government, hungry for energy sovereignty and tired of importing every drop of diesel from India, set the price signals and stepped back. The market responded faster than anyone expected. Chinese brands—BYD, MG and a flotilla of others—now command 80% of EV imports, having shoved aside the Indian incumbents. On paper this looks like a development triumph.
But the paper lies. The roads those EVs drive on are among the worst in South Asia. Only about 52% of Nepal’s national highways are paved, and of roughly 100,000 km of roads built across all categories, many are unpaved tracks. Landslides and floods regularly tear up highways; a single widening project on the East–West Highway has tormented commuters for years. Kathmandu’s average peak‑hour speed has dropped to 15‑20 km/h—a figure the Department of Roads itself acknowledges. An electric SUV idling in the same traffic jam as a petrol one is still an SUV idling in a traffic jam.
And because EVs are so cheap to run, they encourage more driving, more car ownership, more congestion. Nepal is busy swapping tailpipe emissions for tyre dust and gridlock. That is progress, but not the sort its politicians boast about.
Then look at the infrastructure that an EV actually needs. Charging points are growing; Nepal now has more than 1,500 public charging stations, though only a fraction of those are fast chargers (roughly 60‑70 operated by the state utility). They cluster in cities and along a few highways. Most urban residents live in apartments without a private parking spot to plug into. A wallbox costs as much as a month’s wages. The grid, though 90% hydropower, is a seasonal beast: run‑of‑river dams generate abundantly in the monsoon but drop by nearly 60% in the dry winter, forcing Nepal to import power from India just when EV drivers want to charge.
And while no formal recycling law exists yet, the situation on battery waste is not the lawless landfill the headline suggests. An Indian company, Lohum, has already entered the market as the exclusive extended producer responsibility partner for most EV brands in Nepal, creating a recycling pathway. Still, the government has been slow to mandate a comprehensive framework: a risk that grows as sales climb.
The missing piece, the really expensive piece, is public transport. Nepal’s bus system is fragmented, as well as unreliable and run by private syndicates. That pushes anyone who can afford it into a private car, electric or otherwise. The government has bought a few dozen electric buses—a recent order of 100 units brings Sajha Yatayat’s fleet to 140—but that is a rounding error next to demand. The risk is that Nepal’s EV boom becomes a regressive subsidy. The World Bank estimates the effective tax break per small EV at about Rs4m ($30,000), a huge transfer to households that can already put down a 40% deposit on a Rs3m‑4m car. That money might have bought a bus, a bike lane, a pavement. Instead it helped buy a BYD Atto 3 for someone with a garage.
Yet calling it purely a “rich person’s subsidy” oversimplifies: the tax policy was designed to cut Nepal’s crippling fossil‑fuel imports, and it has succeeded in creating a mass market that now includes taxi drivers and middle‑income families. The problem is not the subsidy itself, but the lack of complementary taxes on congestion or parking that would prevent EVs from replacing one traffic jam with another.
None of this is an argument against EVs. Nepal’s hydropower gives it a real edge and fuel imports are falling. But the government mistakes tax policy for transport policy. Norway paired EV incentives with congestion charges and huge investment in public transit. Nepal is doing the reverse: letting cars flood in before the infrastructure is ready. The result may be a cleaner traffic jam, and not a cleaner city. ■
