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| Fig. 1: Charging stations installed by the government in Kathmandu, Nepal. (Source: Wikimedia Commons) |
The rate of adoption of electric vehicles (EVs) has varied significantly between countries, depending on local policy, economic conditions, and geopolitical factors. In general, larger economies have seen higher rates of EV adoption than developing economies. In 2024, the sales share of EVs in China, Europe, and the United States was approximately 40%, 20%, and 10%, respectively, whereas the sales share of EVs in developing economies across Latin America, Asia, and Africa was around 4%. [1] However, among developing economies, Nepal defies this trend with remarkably high rates of EV adoption, outpacing most countries globally (Fig. 1).
Nepal's Department of Customs reports statistics across all imports each year, providing an approximation of the country's EV adoption. From mid-July 2024 to mid-July 2025, Nepal imported significantly more electric than gas passenger cars, three-wheelers, minibuses, and microbuses. On the other hand, motorcycles which represent roughly 70% of the countrys vehicle imports were only 5.3% electric (Table 1). [2] While electric motorcycle adoption is lower, it is still striking how dominant EVs are in Nepal's car market.
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| Table 1: Vehicle imports in Nepal derived from figures reported by Prasain and originating from the Nepal Department of Customs data. [2] The ICE values in the table are calculated as Total - EV./td> |
Nepal has instituted a number of policies to promote EV adoption. Nepal has had lower taxes (customs duty and excise duty) on EVs compared to ICEVs (internal-combustion engine vehicles) for several years, with taxes reduced further for smaller vehicles. In 2024/2025, when comparing the smallest classes of EVs and ICEVs (50 kW and 1000-1500 cc respectively), EVs faced import duties that were approximately 5x lower for customs (~15% vs. ~80%) and 13x lower for excise (~5% vs. ~65%) than ICE vehicles. [3] Larger classes of EVs also have lower taxes than their ICEV counterparts, though the differences are not as large. From 2018/2019 to 2024/2025, Nepal Rastra Bank, Nepal's central bank, allowed larger loans for EVs, up to a maximum of 80% of the total price compared to the 50% allowed for ICEVs, although this policy has since been changed to 60% for both ICEVs and EVs. [3]
Outside of direct financial incentives, Nepal's energy landscape has also likely had significant impacts on its adoption of EVs. Nepal appears to be reducing its reliance on both petroleum and coal imports in favor of electrification and hydropower. Between mid-2021/mid-2022 and mid-2022/mid-2023, Nepal reduced its consumption of coal and petroleum products by 41.5% and 16.14% respectively, while increasing its consumption of electricity and renewable energy by 21.18% and 2.39% respectively. [4] These trends are likely influenced by large increases in global coal and oil prices. In addition, Nepal's EV adoption has likely been influenced by its proximity to China, the global leader in EV production by volume as of 2024. [1]
A unique confluence of factors has likely influenced the exceptionally high rate of EV adoption in Nepal. It is also worth restating that while the adoption rate of four-wheeled EVs is high, the majority of vehicles sold are still ICEV motorcycles. Nevertheless, Nepal shows how government policies can significantly influence the rate of electric-vehicle adoption when combined with broader geopolitical and economic factors.
© Brandon Ameglio. The author warrants that the work is the author's own and that Stanford University provided no input other than typesetting and referencing guidelines. The author grants permission to copy, distribute, and display this work in unaltered form, with attribution to the author, for noncommercial purposes only. All other rights, including commercial rights, are reserved to the author.
[1] "Global EV Outlook 2025," International Energy Agency, July 2025.
[2] K. Prasain, "Nepal Shifts Gears as EVs Hit 73 Percent of 4-wheeler Imports," Kathmandu Post, 27 Jul 25.
[3] A. K. Jha et al., "Current State and Energy Policy Roadmap For Sustainable Adoption of Electric Vehicles in Nepal," Int. J. Energy Econ. Policy 15, 272 (2025).
[4] "Energy Sector Synopsis Report 2024," Government of Nepal, Water and Energy Commission Secretariat, 2024.
