Showing posts with label Electric cars. Show all posts
Showing posts with label Electric cars. Show all posts

Friday, May 29, 2020

Electric cars expanding the market

Increased tax on electric vehicles, thus increasing the price

The government has a policy to increase electricity consumption at a higher rate in the coming fiscal year. For that, the government has a plan to promote electric vehicles. However, the budget has undermined its own plan by raising taxes on electric vehicles.

In the budget for the coming fiscal year 2077/078 presented in the parliament on Thursday, the customs and excise rates for importing electric vehicles have been increased extensively. This will make jeeps and cars more expensive than buses with electric motors.

The government plans to impose up to 80 percent customs duty on all types of electric cars. In the case of three-wheeled electric vehicles, only 30 percent customs duty has been fixed. However, 50 percent discount has been provided in it, so 40 percent customs duty has to be paid while supplying.

The government has brought a budget bill to impose excise duty of 5 to 80 percent on electric vehicles depending on the capacity of the motor.

The government has decided to levy 80 percent customs duty on electric cars brought for private use.

Earlier, the government was levying 10 percent excise duty, 13 percent VAT and 4 percent road tax on the purchase price. As the government has given duty exemption on electric cars, the buyers of electric vehicles have been attracting more and more.

Earlier, the excise duty on electric cars imported from 10 percent has been increased to 80 percent. Jeeps and cars with 50 to 100 kW motors will be subject to 30 percent excise duty.

Vehicles with 100 to 150 kW motor will be charged 50 percent excise duty on vehicles with 40,150 to 200 kW motor and vehicles with 200 to 300 kW motor will be charged 60 percent excise duty. If the pick-up of the car is more than 300 watts, 70 percent excise duty will be levied.

The government will impose only 5 percent excise duty on vehicles with more than 25 seats. The excise duty on electric buses of smaller capacity is up to 55 percent. The government has also increased the road toll from 1 percent to 5 percent this time.

How does the price of an electric car increase?

Let's look at an example of how the price of an electric car currently being sold in Nepal for Rs 10 million is increasing. An electric car worth Rs 10 million in Nepal is now bought in foreign markets for  49,000. Based on today's exchange rate, its value in the company is Rs 7.252 million.

Now, according to the tax rate brought by the government, 80 percent customs duty is levied on it. In other words, it now costs Rs 58 lakh 1 thousand. However, as half of the exemption has been given, Rs 2.9 million will be added to the customs.

An additional 60 percent excise duty is also charged. That is, now the value of Rs 43.51 million is added to it. Accordingly, the value of this vehicle can reach Rs 14.5 million after paying customs excise duty. Adding 5 percent road toll to this price adds Rs 725,000. Besides, 13 percent VAT should also be added. Accordingly, 1.835 million VAT is added. By the time the price of this vehicle crosses the customs point, about 17 million 62 thousand importers can have spent it.

If 20 percent profit is kept in it, the value will be maintained only by adding 3.4 million 12 thousand. That is, an electric car bought abroad for Rs 7.2 million can be sold in Nepal for only Rs 20.5 million.

Electric cars expanding the market

President Vidyadevi Bhandari, Minister for Energy Barshaman Pun, Managing Director of Nepal Electricity Authority Kulman Ghising and others have been using electric vehicles.

It has been months since Minister Pun left Toyota's petrol car and started riding in the Chinese brand BYD E-Six model car. After him, President Bhandari has also started using the same model car worth Rs 6.6 million.

Not only these high-ranking officials but also the general public are showing interest in electric vehicles today. Sahil Shrestha, Chief Executive Officer of BYD Auto Industries, said that electric vehicles (EVs) have become the choice of many as they do not have to pay taxes annually, do not have petroleum problems and are environmentally friendly.

"Adding maintenance, taxes and fuel costs saves millions of rupees," he said. "It only costs a rupee to run a kilometer on an EV." According to him, electric vehicles have not been able to produce with great results.

He said that due to limited battery production, such vehicles could not be distributed in the world as per the demand. Hyundai sells two models of electric cars in Nepal, Kona and Ionic. Bhatta informed that 44 vehicles have been sold so far.

"Hyundai is all set to launch a new model of e-vehicle," he said, adding that "there is a growing demand for such vehicles as people become more environmentally conscious." We launched Kona last January with 40 units booked in a single week. We have sold it all. 'Hyundai's Kona costs Rs 5.59 million and Ionic costs Rs 5.196 million. BYD is unveiling a new E3 model car in a few months. Shrestha also informed that e-bus is also being brought.

Mahindra, Tata, Kia brand electric cars can be bought in Nepal. Apart from this, cars of brands like Haoyu, Dehi, J Star are also available. They range in price from Rs 1.6 million to Rs 6.6 million. Among them, Mahindra's models like Reva and Verito are the most sold. Mahindra has so far sold about 600 electric cars, while Dehi has sold 10, Hao 4 and J Star 4. Banks provide up to 80 percent auto loans to those who buy electric vehicles.

The number of electric cars in Nepal is now around one thousand, said Umesh Raj Shrestha, president of the Electric Vehicles Association. According to him, there are 3500 to 4000 e-scooters, 4000 tricycles and 750 clean tempos in the country.

"Ten years ago today, the Navy Company introduced electric brand electric cars," he said. There are not enough choices to make.

He said that he was getting the car of his choice as there was no variety of vehicles. "Is it cheap, expensive or mid-range vehicles?" He said. "There is not enough diversity."

Charging station not reached

The electric vehicle has to be charged just as the internal combustion engine (ICE) vehicle needs fuel. Now electric car companies have set up their own charging stations in various locations. BYD has 12 fast charging stations inside Kathmandu and 3 outside the Kathmandu Valley. Nepal Electricity Authority has also set up charging stations at Ratna Park and Singha Durbar.

"It would have been easier to have a charging station every 30-40 kilometers," said Sitaram Dahal of Budhanilkantha, who runs Mahindra's Verito. Hesitant sellers have experience.

Shrestha of the Electric Vehicles Association does not consider charging stations to be a big problem. According to him, if the government provides land and electricity in some major places like Muglin, Bardibas and Narayanghat, companies can easily build stations by placing charging piles. "The government's environment-friendly transport policy plans to make 20 percent of vehicles electric by 2020," he said. The government is bringing in big diesel-powered vehicles. '

Shrestha said that the government should be more serious for the promotion of electric vehicles. He said that not only cars but also e-scooters and public electric vehicles need to be promoted. "In order to reduce pollution by reducing the consumption of fossil fuels, the government should place special emphasis on the promotion of public electric vehicles," he said. "The promotion of private vehicles alone is not enough."