Dynamics of Electric Vehicles Market in Nepal

with Demand Projection

to
Mr. Thomas Lorberg

11th November 2019

Kathmandu
 Agenda/Details on Presentation
1. Nepal Government Policy in Electric car
3. Taxes and duty applicable in electric Vehicles
4. Registration/bookings of Electric car till Sept 2019
5. Price Waterfall – FOB to MRP for Electric Cars
6. Challenges in context of Nepal
7. Rationale behind release of electric cars to Nepal
8. Our Request
 Nepal Government Policy in Electric car

• Prime Minister K P Oli emerged as the political leader with

majority votes after legislative election held in December
2017.
• His main focus is to reduce dependency of Nepal on Energy
sector by replacing #1 import commodity of Nepal i.e.
Petroleum products with Hydro Electricity.
• After new formulation of new constitution in 7 different
PM – K P Oli
states, all the states head has publicly announced to replace
petrol/diesel vehicles with electric ones.
• The head of the main state of Nepal where 60% passenger
cars are used has announced to ban petrol/diesel passenger
vehicles by 2025.
Taxes and Duty applicable in electric Cars
• In last budget, government has increased duty in petrol/diesel cars to discourage the
import which ranges from 251% to 339% on CIF price.

Electric cars has to pay duty/tax of 29% only

• Moreover, Government has made restriction of financing amount of 50% of sales
value for Petrol/diesel cars.

Electric cars can avail the financing facility of up to 80%.

• The Government has increased the annual ownership/road tax ranging from USD 200
to 500

Electric cars are exempt from any kind of yearly tax.

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 Registration/bookings of Electric car till Sept 2019

Electric Vehicle Registered/Sold in Nepal

2019 till Market
Sr. MODEL 2016 2017 2018 Sept Pending Projection in CIF Kolkatta
2019 Bookings in 2020 (Subject to Import Price
Hand Supply) (USD)
1 M&M E20 plus 74 62
2 M&M Reva electric 66 22 0 0
3 Mahindra E-VERITO Mahindra 10 16 10
4 Kia Soul Electric 9 0
5 Kia Niro 0 116 100 $ 37,617.00
6 Hyundai Kona (100 KW) 0 134 140 $ 28,613.00
7 Hyundai ioniq-ev 2 8
8 MG Electric SUV 0 1 140
9 BYD 5 10 35 10
10 Electric car from China - DAHE 5 200
11 Peugeot Partner electric 2 0
Total 66 27 107 377 600 1466

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 PRICE WATERFALL FOR ELECTRIC CARS - FOB TO MRP
Particulars Duty % A-SUVe Pure A-SUVe PRO
CIF Kolkatta Price in USD $ 25,412 $ 35,322
Freight Kolkatta to Nepal border 700 700
Insurance till border 0.26% 66 92
CIF Border Price in NRS 26178 36114
Customs duty 10% 2618 3611
Excise duty 0% 0 0
VAT 13% 3744 5164
RDF duty 4% 1302 1796
Landing cost with VAT 33841 46686
Landing cost without VAT 30098 41521
Clearing charges at Birgunj 140 140
Driver charges from BRJ to KTM 40 40
Comprehensive insurance (BRJ to KTM) 0.13% 44 61
Bank Charges 340 340
Free Servicing Charges 70 70
Incentive for Sales Team 150 150
Interest cost for holding stock for 4 months 12% 1235 1693
Advertisement and promotion budget 3% 964 1320
Margin for Dealer/Discount 12% 3970 5440
Margin for importer (To cover
salary+rent+investment) 10% 3705 5078
ADD: VAT 13% 13% 482 660
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MRP $ 41,237 $ 56,513
Challenges on Electric Cars import
• Sufficient ground Clearance to drive the cars outside Kathmandu Valley. Should be
130mm minimum.

• Charging stations.

• After sales Service infrastructure to cater the need for servicing of electric cars.

• Hiring of service manpower. (High Voltage technician)

• Preparedness for casualty management (Accidents/fire)

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Rationale behind early release of electric cars to Nepal
• Nepalese customers will prefer electric over petrol/diesel cars as they are cheaper
more than 26% to 41% in MRP than petrol/diesel ones + 8 times lower running
cost.

• Unlike developed countries, Nepal’s source of electricity is 100% clean as it is

sourced from renewable hydro electricity.

• The State government has started to add only electric vehicles for their mobility
in City

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 Our Request
• In Pooja perspective, as no new imminent launches of VW cars in Nepal, Electric vehicles
can generate extra foot falls/ sales in our showroom which will compliment existing products
as well as help us meet the cost of running business.

• Market is in introductory stage, so early mover will have the advantage of market leader
and with each passing day we are getting late.

• We have dented image of VW after dieselgate case among the bankers and environment
conscious buyers. Introduction of Electric vehicle will mitigate the perception and present
ourselves as environment friendly brand.

• We are ready to invest on aftersales infrastructure required for charging/servicing electric

vehicles.

• We are aware of focus of the company to supply electric cars to developed market but with
very small quantity diverted to Nepal can help us survive, become market leader and can
get the positive image for brand as electric cars are run by 100% clean renewable energy.

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 Thank You

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