Import subsidies, abundant hydropower and charging investments have spurred EV adoption, with electric vehicles now making up about three-quarters of new car sales
Faced with long queues and eye-watering prices, filling up has been a painful experience for South Asia’s many self-employed drivers since the Iran war unleashed turmoil in global energy markets.
But in Nepal, above-average rates of electric vehicle (EV) adoption among minivan drivers like 52-year-old Gyanu Pattel have helped to soften the blow.
A year ago, Pattel swapped his Tata Sumo diesel SUV for a 10-seater electric van, which he uses to shuttle passengers 140 km (87 miles) back and forth from Birgunj near the Indian border to the capital, Kathmandu, each day.
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Daily charging costs him $9, much less than the $45 he used to spend on diesel. While he also spends $600 a month paying off the loan for the van, he told Climate Home News that his income is sufficient and that in five years’ time, he will have paid it off.
“If I didn’t get enough passengers, I would incur losses,” he said, “Now I save on fuel and maintenance costs.”
Himalayan hydropower
While still a small market in global terms, Nepal is a leader on rates of EV adoption.
Nearly three-quarters of new cars sold in the country are now electric, 2025 customs data shows, one of the highest rates in the world. In neighbouring India, EV sales currently account for about 5% of the total market.
Sales of electric motorbikes, three-wheelers and minivans have also risen sharply since about 2020.
While Nepal has no oil or gas production of its own and is dependent on imports to meet its fuel needs, it has plentiful supplies of electricity generated by hydropower, making EVs a no-brainer for policymakers.
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Bruised by previous oil supply crises, Nepal’s government has introduced policies to encourage EV adoption. When Russia’s 2022 invasion of Ukraine drove up fuel prices, the Nepali government cut the import tax for EVs to 43% compared with 257% for a petrol or diesel car.
At the same time, charging stations have sprung up across the country as a result of investments by the private sector and development aid.
No more panic
Nepal’s EV boom has brought multiple benefits beyond cutting air pollution and helping the country progress towards its goal for net-zero emissions by 2045, advocates say.
Reducing the country’s fuel needs is a way to shield its foreign currency reserves from spikes in global oil prices.
Electric minivans like Pattel’s have also helped improve public transport. For drivers like him, lower running costs mean they are more willing to leave with empty seats, meaning passengers have shorter waits and more comfortable journeys.
Above all, it cushions the impact of oil shocks like the current crisis triggered by Iran’s effective closure of the Strait of Hormuz, through which a fifth of the world’s oil and liquefied natural gas supplies flowed previously.
“Unlike in the past, rising petroleum prices do not create panic because there are alternative options,” said Sauden Badal, business developer at EV import company Shasheela Motors, which has an EV charging network across the country of 30 million people.
He said Nepal’s target to reach net zero by 2045 had convinced people that “the future is electric vehicles”.
Stung by past shocks
It was a major fuel crisis in 2015/2016 that helped kindle Nepal’s EV revolution.
A row between Nepal and India led protesters to block trucks carrying fuel from India into Nepal, causing months of acute shortages that prompted many Nepalis to shift to pedal-powered and electric two-wheeled vehicles.
Recalling that crisis, Bijay Lama, the driver of a 17-seater electric microbus, told Climate Home News he remembered waiting hours for diesel. This time around, he said, people are far less concerned about the fuel price hikes.
“Now, EVs have reduced such problems,” he said as he loaded a passenger’s luggage onto the roof.
In the early days of the country’s EV roll-out, finding a charging point was a concern, said Anil Chaudhari, who drives a 14-seater electric microbus. Today there are charging centres every 20 minutes on main roads and in urban areas.
“Charging facilities are available in almost every sector. I have travelled from east to west of the country driving an EV and I did not face any problems,” he said.
Nepal had just over 1,500 charging stations by the end of 2025, up from just 50 five years earlier, according to data from the Energy Ministry.
Long road ahead
Despite the progress so far, much more remains to be done, said Maheshwar Dhakal, head of the Environment Ministry’s climate change management division.
While smaller buses are going electric, bigger ones travelling long distances still mainly run on petrol and diesel, Dhakal said.
“Policies need to be reviewed and discussions will continue,” he said.
Jeevan Banjade, vice chair of West Nepal Bus Operator Limited, a major bus operator and association, urged the government to reduce customs duties on electric buses, EV batteries and spare parts.
He added that once works were completed on major roads, the private sector would invest in large electric buses.
Public investment is also needed to improve the nation’s electricity infrastructure. While Nepal produces plenty of electricity from hydropower in its mountains, transporting it to urban hubs like Kathmandu where it is needed is a challenge.
“We need to invest heavily in infrastructure such as transformers, transmission lines and distribution systems,” Ram Prasad Dhital, chair of the Electricity Regulatory Commission, told Climate Home News.
“If we can do this, our dependency on fossil fuels will decrease.”
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