Months-long disruptions at Nepal's two main northern border crossings with China have slowed the country's electric vehicle (EV) market, reducing imports and affecting the launch of new models ahead of two major automotive exhibitions scheduled for this month.

According to data from the Department of Customs, EV imports declined by 24% during the last fiscal year, while overall imports of four-wheeled vehicles - including passenger buses, microbuses and private vehicles - fell by 19%.

During the fiscal year, Nepal imported four-wheeled vehicles worth NPR 40.44 billion (US$ 266 million), of which EVs accounted for NPR 31.32 billion.

The supply disruption has raised concerns among importers that they may be unable to unveil new models on schedule at the NAIMA Nepal Mobility Expo 2026, which begins on August 11th, and the NADA Auto Show 2026, which starts on August 25th.

Yamuna Shrestha, Managing Director of Cimex, the authorised distributor of BYD in Nepal, said the company had planned to import EVs during the last fiscal year but was unable to do so because of disruptions at the Chinese border.

Trade through Nepal's northern border crossings has faced repeated disruptions over the past year. On July 8th, 2025, a flash flood in the Lhende River swept away the Friendship Bridge at Kerung, one of Nepal's trade gateways with China. China took nearly six months to construct a temporary bridge. Nepal's Rasuwagadhi customs point is located about 24 kilometres south of Kerung.

Similarly, the Tatopani border crossing in Sindhupalchok remained closed for about three months after major landslides blocked the route. Shrestha said the northern border crossings remained disrupted for four to five months during the last fiscal year, including the festive season, resulting in losses for businesses. Although some EV shipments were rerouted through the Korala border point, she said importing through that route was difficult. She urged the government to respond whenever major trade routes are disrupted.

"The government should ensure smooth trade whenever such obstructions occur. This is not only about importing EVs but all goods. Major trade routes should be prioritised because we have not been able to deliver EVs on time as committed," she said.

Dhruba Thapa, Chairman of Himalayan Motrox, the authorised distributor of the EV brand Maxus, said the decline in imports was also influenced by heavy stockpiling before the previous fiscal year's budget.

According to Thapa, most EV importers imported 20% to 25% more vehicles than usual ahead of the previous budget because of speculation that import duties would increase. Those inventories were sufficient to meet demand for four to five months, contributing to the decline in imports during the last fiscal year.

He further added that the prolonged closure of the Rasuwagadhi and Tatopani border crossings also prevented dealers from introducing new vehicle models during last year's Dashain and Tihar festivals.

According to dealers, supply disruptions also prevented customers from receiving newly launched models showcased during last year's Nepal Automobile Importers and Manufacturers Association (NAIMA) and Nepal Automobile Dealers' Association (NADA) auto shows. They said this year's exhibitions could face similar setbacks if the Tatopani border crossing remains closed.

Thapa said he planned to launch a new Maxus model at this year's auto show, but the vehicles remain stranded at Tatopani because of landslides.

He further added that rerouting shipments through Kerung would increase documentation requirements, transport times and costs, while routing them through the Korala border crossing was impractical because of the long distance from the Maxus factory.

Shyam Sapkota, President of the Electric Vehicle Importers and Manufacturers Association of Nepal, said members also intended to introduce new models during the auto shows, but many vehicles remain stranded at the border crossings.

Thapa said demand for premium EVs had been increasing until the previous fiscal year. However, higher import duties introduced in the current fiscal year's budget have increased prices and reduced the affordability of premium models.

For example, the price of the Maxus MIFA 7 has increased from NPR 10.25 million during the previous fiscal year to NPR 20.45 million in the current fiscal year. The company is targeting sales of Maxus electric pickup trucks during the current fiscal year. The Maxus electric pickup truck is priced at NPR 8.8 million.

Chinese brands accounted for the largest share of Nepal's EV imports. Of the NPR 31.32 billion spent on EV imports during the last fiscal year, NPR 23.55 billion was spent on Chinese vehicles. India's share stood at NPR 5.22 billion, while imports from Thailand, the UK, Germany, South Korea, the United States and Austria totalled NPR 2.60 billion.

Sapkota said poor road conditions on the Tatopani route and lengthy customs clearance procedures at Rasuwagadhi continue to create challenges. He added that documentation requirements have become stricter since the beginning of the current fiscal year.

According to Sapkota, around 60 EV brands, including electric cars, jeeps, vans and microbuses, are currently available in Nepal.

"With so many brands in the market, competition has become intense, and customers are also becoming confused by the wide range of choices," he said.

Dealers said consumer demand for EVs continues despite the supply chain disruptions.

However, following the new tax policy, buyers who previously sought vehicles priced between NPR 4 million and NPR 5 million are increasingly shifting to models priced below NPR 4 million. Demand for premium EVs priced above NPR 5 million has weakened, while competition in the lower-priced segment has increased.

According to the National Transportation Policy 2026 prepared by the Ministry of Infrastructure Development, EVs accounted for more than 70% of all passenger vehicles imported into the country during the 2023-24 fiscal year, making Nepal the world's second-largest EV market by the share of new passenger vehicle sales after Norway. The trend continued during the 2024-25 fiscal year.

Department of Customs data also show that Nepal imported unassembled motorcycles worth NPR 30.35 billion and assembled motorcycles worth NPR 2.72 billion during the last fiscal year. Electric two-wheelers also accounted for imports valued at NPR 2.99 billion.

Separately, taxpayers in Malaysia can claim up to MYR 2,500 (US$ 620) in annual personal income tax relief for expenses related to EV charging equipment, installation, rental or public charging subscription fees.