The enigma of policy shift in electric vehicles

Nepal has announced its budget for the Fiscal Year 2020/21 in the middle of COVID-19 pandemic in May end. This article focuses on dissecting the reasons behind the policy shift on electric vehicles (EV) that has sent shock waves through the market. In recent years, the government had brought many supportive policies and publicized ambitious EV targets. The conducive policy signal has successfully leveraged private sector financing in EV sector development with much vigor until the budget announcement. There is a separate government narrative in its defense but in the course of this article, I have attempted to look at other probable reasons including our National interest.

To start with, let's look at the EV related official position of Nepal. Nepal has aligned its national target with the global effort to achieve climate-friendly public and private transportation system. They are reflected in various policies and plans including National Urban Policy, Environment-friendly Transport Policy, National Action Plan for Electric Mobility, Sustainable Development Goal (SDG) 2030 published by the National Planning Commission (NPC) in 2016, Nationally Determined Contribution (NDC)-2016 submitted by the government in compliance with ratification of 2015 Paris Agreement during the 21 st Conference of Parties (CoP) of the United Nations Framework Convention on Climate Change (UNFCCC) and white papers published by the Energy Ministry in 2018. The specific targets related to EV are: a) Increase the share of EV by 20% from 2010 level by 2020 and provide subsidy to promote EV conversion of regular vehicles (NDC Clause 2.D); b) Reduce fossil fuel dependency by 50% in transport sector by 2050 (NDC Clause C.9); c) Substitute 50% of vehicle import to EV by 2024 (White Paper Clause 72); and d) 50% of public transportation as EV by 2030 (SDG).