‘Lack of policy’ likely to slow electric vehicle sales

‘Lack of policy’ likely to slow electric vehicle sales

Lack of a clear policy on the registration of electric vehicles is likely to impede an expected sales growth despite a reduction in the import duty by the new budget statement and resulting drop in prices.

There are no specific rules regarding the issuance of driving licences and licence numbers to e-vehicles, dealers said.

“This is a positive initiative by the government to support e-vehicle businesses that have been struggling to gain sales and customer confidence. There is no concrete policy on regulating e-vehicles,” said Bijay Ray, CEO of Bela Motors, importer of Bella electric scooters.

“The government lured us into the environment-friendly vehicle business by granting import subsidies, but how can we grow if a permanent solution to the road permit issue is not found soon?”

According to Ray, the decreased customs duty will surely reduce prices. “We will revise our price list after studying the details,” he added.

Electric vehicles brought for public transportation have been granted a 100 percent excise duty waiver, while the customs duty has been brought down to 1 percent from 15 percent as part of the government’s effort to promote green vehicles and cut pollution.

Moreover, importers of electric vehicles brought for private purposes will also get a 100 percent waiver on excise duty and the import duty on such vehicles has been lowered to 10 percent from 40 percent. The vehicles, however, are subject to 13 percent VAT and other charges.

“Electric cars which used to cost Rs2.4 million may be available for Rs1.8 to Rs1.9 million after the implementation of the new tax provision,” said Umesh Raj Shrestha, chairman of the Electric Vehicles Association of Nepal.

However, traders said that the policy might not yield the expected result because there is no provision of tax rebate for batteries. “There has been no reduction in the 45 percent import duty on batteries that power these vehicles,” said Shrestha.

Government officials said that taxes had been waived to promote the use of these vehicles in a bid to cut the total fuel expenses of the economy.

Laxman Aryal, joint secretary at the Ministry of Finance, said that the government had decided to adopt this policy even though it might cause a slight impact on revenue collection.

According to Aryal, many prominent academicians, representatives of the general public and electric vehicle importers had been pressuring the government to adopt this environment-friendly policy in the budget.

Meanwhile, the Department of Transport Management (DoTM) has submitted a working procedure on the issuance of licences and road permits to the Ministry of Physical Infrastructure and Transport.

“The ministry is yet to reach a concrete decision on issuing driving licenses and road permits to electric vehicles, and the working paper has not been finalised,” said Chandra Man Shrestha, director general of the department.

A few months ago, the DoTM had issued a 15-day deadline to electric vehicle owners to register them before bringing them out on the streets. “Until a working procedure regarding the regulation of e-vehicles is passed by the ministry, the department calls all vehicle owners to register their vehicles and operate them at specified locations only,” the DoTM said in a notice.

As per the current provision, all electric vehicle owners are required to register with the DoTM and they are allowed to operate their vehicles at specified locations only after passing a roadworthiness test.

Source: The Kathmandu Post