Is EV really worth subsidy?

EV: Electric Vehicle

ICE : Internal Combustion Engine (Petrol / Diesel)
• Government is Encouraging EV by levying low duty on it and Govt believes due to
this step Import cost of Fuel will reduce hence Govt will save Foreign currency
reserve.

• Government has not considered cost of high priced EV and cost of import of
battery which will deplete more foreign currency reserve.

• As of today we have over million’s of vehicles/machines which are dependent in

fuel and its cause the of high fuel import . But if you consider per vehicle cost and
cost of import of fuel for that vehicle , then it’s lower than EV

• if the same number of EV were present cost of battery and extra cost paid to
import EV would have been much more compared to Fuel import cost and ICE
Vehicles Import Cost .
 • Foreign Exchange loss at the time of Import
We have taken two vehicles of same Brand with ICE and EV model with similar price range.

• Import Price : Creta 1.6 Gasoline SX AT. 13,04,658 – (Mrp : 60,96,000)

• Import Price : KONA 33,36,329/- . (Mrp : 55,96,000)

• Difference is already approx. 20 lacs, we are spending more foreign currency on EV

at the time of import,
• ICE vehicles will not consume 20 lacs worth of fuel in its lifetime , foreign exchange
of which value is saved during the import for vehicle. (Calculation provided in next
slide)
• As per import data the average import of vehicles is 18482 ICE and 98 EV vehicles in Nepal.
Average Import Value of ICE Vehicles = 8,46,099
Average Import Value of EV = 32,45,992

Current Scenario Of Foreign Currency Exchange

ICE VEHICLES : 8,46,099(Avg Value of ICE Vehicles) *18,482(Number of ICE Vehicles Imported)
= 15,637,601,718

• If the number of EV were the same as ICE

EV : 32,45,992(Avg Value of EV ) * 18,482 (Number of EV Imported)

=59,992,424,144

• If same number of EV and ICE were imported we would loose =

59,992,424,144 (EV)- 15,637,601,718(ICE) =44,354,822,426 (LOSS OF FOREIGN CURRENCY EXCHANGE)

The loss would be more than Fourty Four Billion .

Note: The above calculation is just for private vehicles and no commercial vehicles are included, if
commercial vehicles were added
In an average car runs up to 8,000km / year,
Comparison:
Fuel Cars: EV:
• 8000(Total KM Run per year) / 10 • If you compare the battery life of
(Avg. Creta Fuel economy) = an EV it will give you maximum
800*108(fuel cost)= 86,400/- per of 10 Years
year. • Approx. Price of EV battery as of
• The above cost is MRP of petrol now is minimum USD$ 15000
but foreign currency used for which is huge cost and we will be
800ltr fuel would be 47,092 spending foreign currency reserve
(800*58.864734 “Import cost of to import it every 10 year
Petrol is INR 32.7015 rest is duty
and local cost.)
• Foreign currency used in 10 years
span for fuel import would be
NPR 4,70,920
 Government Loss while Importing EV
• Because of the tax subsidy on EV, government is loosing duty revenue on EV.

• It would have been minimum 260% of invoice value for fuel vehicle 13,04,658
(Creta CIF Price) + 3,392,110.8 (Government duty of 260% that is being lost)

• In case of KONA
Import price of Kona : NPR 33,36,328/-
Duty on Kona would be : 9,76,609

• Total Government Duty Loss on Importing EV: 3,392,110.8(Duty Price Creta) -

9,76,609 (Duty Price Kona) = NPR 24,15,501(Duty Loss Per Vehicles)