Clean Tech

With a little help from friends and neighbours

Twesh Mishra | Updated on March 27, 2018

Indian companies have a significant role in Nepal’s pursuit of clean mobility

Even before India could figure the best approach for boosting electric vehicles in the country, its Himalayan neighbour, Nepal has begun its transition towards clean mobility. But the journey ahead for the hill kingdom will depend substantially on an impetus provided by Indian electric vehicle (EV) manufacturers.

Until last year, Nepal was reeling under an acute power shortage with up to 12 hours of power cuts a day. Because of this, electric vehicles were beyond the imagination of ordinary Nepalis as well as importers. However, in the last year, power cuts have significantly reduced thanks to power imports from India and efficient power distribution management.

According to the Nepal Electricity Authority (NEA), the country will have surplus electricity from April 2019. Apart from planning to export it, Nepal would like to use the additional power to gradually phase out fossil fuel-run vehicles. This means a considerable opportunity opening up for EV manufacturers in the region.

There already exists a small EV market in Nepal, which is dominated by India’s Mahindra e2O, and some models from China’s BYD and South Korea’s Kia. According to reports, the Electric Vehicle Association of Nepal (EVAN) estimates around 21,000 EVs plying in the country.

Eyeing the market

Tata Motors has also realised the potential of the Himalayan market and is spreading its roots to introduce an EV model in the near future. Sujan Roy, head of its Passenger Vehicle (International Business) says, “We are working very hard to bring EVs into Nepal. However, we are constrained to some extent by the unavailability of charging infrastructure. But a Tata EV will be available on the streets of Nepal soon.”

The NEA stepped on the gas late last year to set up a model EV charging station at its headquarters in Ratnapark, Kathmandu, in partnership with BYD Auto. The National Planning Commission also became the first public entity to procure an EV.

Managing Director at the NEA, Kul Man Ghising, explains, “When it comes to EVs, I think government policies to encourage people to buy electric cars need to be in place. The other important thing is a good network of charging stations at a scale similar to the fossil fuel distribution network. Charging stations are the petrol pumps of the future.”

Ghising insists that the NEA is best positioned for setting up the required charging infrastructure. “If you look at our daily power demand curve, you will see that it is not uniform. There are two hours in the morning and in the evening when demand peaks and during the rest of the day it goes down by 50 per cent.” So, to optimise the system and make the load curve more uniform, he advocates something that will spur demand during the off-peak hours. “EVs could help us do that. If we could use the under-utilised power to charge EVs, the system will become more efficient and lower the cost of power,” he explains.

Battery swapping

Delhi based Lithion Power has another solution. Piyush Gupta, Director, says his firm is working on setting up its proprietary ‘Lithion Swap Stations’ to aide EV drivers in a number of emerging markets, including Nepal.

“In Nepal, our initial focus will be in the Terai region, where we intend to work with our partner in creating a sustainable electric vehicle ecosystem. Lithion Swap Stations will utilise the patented technology of Lithion power banks to do a two-minute battery swap for EVs. This increases the ease of use for drivers and aids in the faster adoption of EVs,” says Gupta. Gupta’s focus has been on e-rickshaws and public transport in Nepal, the sector where he believes some uniformity can be introduced through regulations to allow battery swapping.

Terai has a considerable penetration of e-rickshaws, which first began thanks to a US Asia Environmental Partnership (USAEP) fund started as early as 1993. In 1996, a private consortium of Nepalese firms and businesspersons started operating a fleet of seven electric tempos. A USAID/Nepal report at that time had pointed out the unprecedented success of the Nepal Electric Vehicle Program. In fact, EVs have become the choice mode of transport for people in towns like Biratnagar, Itahari and Hetauda in southern Nepal. Going by the progress achieved, theoretically Nepal should have been far ahead of the world in adopting EVs. But that’s far from the reality, though a lot of the slowdown can be attributed to political turbulence that destabilised the nation from the beginning of the millennium.

The cost factor

A factor hindering EV penetration from India is the exorbitant cost. The Himalayan nation, it is well known, is mostly dependent on India for its fuel requirements. According to India’s Ministry of External Affairs, the country’s exports to Nepal increased from ₹1,525 crore in financial year 1995-1996 to ₹29,825.76 crore (or $ 4.48 billion) in financial year 2015-2016. Motor vehicles and spare parts comprised 13.1 per cent of the import bill, next only to petroleum products with 13.7 per cent of the pie.

The import reliance leads to cost build-ups and pricing opacity. For example, the Mahindra Reva e2O T2, the top model of the vehicle, is priced close to Nepalese Rupee (NPR) 30 lakh (or ₹20 lakh in Indian currency) in Nepal. The same vehicle costs nearly a third at ₹7.5 lakh in a New Delhi showroom. A Nepal-focused exporter says transportation of vehicles is a problem, “The route to Nepal from India is rather restrictive and there are very few truckers that ply the route. There is considerable delay at the check points that leads to cost overruns.” But a Nepalese importer has this argument, “The cost of EVs in Nepal is higher because of overhead costs due to import procedures, customs clearance and a 20 per cent profit margin charged by the dealers. The tax is just 28 per cent but other costs make the vehicles more expensive.”

(The story is part of a series on E-mobility in Nepal and India produced under a grant from Clean Energy Wire (CLEW),Germany)

Published on March 27, 2018

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