Revised Taxation: BYD Concerned About EV Expansion

Cimex Inc. Pvt. Ltd., the authorized distributor of BYD EVs in Nepal, has shown massive concern regarding the recently revised EV taxation policy which has resulted in a drastic increase in the prices of EVs sold in Nepal. BYD's concern is not related to business but instead the environmental aspects and the impact it can have on the very slow but steadily growing Nepali EV market.

The revised taxation demonstrates a major policy departure from the government which sets a dangerous precedent not only in the eyes of investors but also in the general public. As of now, electric vehicles constitute only a small 5% market share of the total automobile industry in Nepal. In FY 2078/79, approximately 1400 EVs were imported while the numbers for non-electric vehicles were 15000, which highlights the initial adaptation of electric vehicles.

Given the standardization going on in EVs, it is scientifically wrong to relate motor capacity with luxury. Because the cost of EV technology is high, automakers use high-capacity motors to balance the comfort and cost. Thus automakers choose standard or optimum motor capacity rather than small motor capacity.

Consumers’ adaptation to electric vehicles is high in the mid and top range segment because of utility, range, and global market trends. The proposed new taxation policy promotes the EV in the entry-level segment which is still in the development stage globally and isn’t so widely adopted right now. The same has been and will be reflected in the Nepalese market trends.

With the proposed new taxation, there won’t be any motivation to buy EVs for the end-user. This, in turn, will reflect in revenue loss to the government, more adaptation of ICE vehicles, and subsequent use of fuel. The new taxation approach contradicts the government policy of adaptation of electric vehicles and increases the domestic consumption of electricity.

Continuation of favourable EV policies means Nepal can demonstrate flexibility in the adoption of EVs within the next few years. EV technology can also be localized giving our country a first-mover advantage. In that period, Nepal can nourish this innovative technology to develop its capacity for assembling, manufacturing, and producing, which in itself is an undeniable advantage.

We can use this to portray our image in the global arena and strengthen our commitment to fighting climate change, aggressively adopting new technologies, and localising new sustainable technologies like EVs.