Rising fuel prices are encouraging more Bhutanese consumers to consider electric vehicles (EVs), with dealers reporting a sharp increase in enquiries and, in some cases, record monthly sales. However, high upfront costs and gaps in the national charging network continue to slow adoption.

Records from the Bhutan Construction and Transport Authority (BCTA) show that EV registrations increased between February and April this year. EVs currently account for slightly more than 1% of the national vehicle fleet.

ST Motors, one of the country's major EV dealers, reported a significant increase in sales this year. During the first four months of 2026, the dealer's EV sales reached nearly 30% of its total sales from last year.

"Normally, in a month, the maximum we sell would come to around 10 to 15 EVs. However, due to the increasing fuel prices, we sold 26 cars last month," said Ugyen Phuntsho Rabgay, Director of Operations at ST Motors.

He further added that rising fuel costs are prompting more consumers to seriously consider switching to EVs. The government is also increasing its focus on electrification. Last week, the Prime Minister announced plans to procure additional EVs and electric buses to reduce the country's dependence on fuel imports.

ST Motors also reported increased demand for EV rentals, prompting the company to expand its fleet.

BBS contacted other major EV dealers, although not all were available for comment. One dealer, who requested anonymity, stated that public enquiries had increased sharply in recent months but had yet to translate into sales because of several factors.

Cost remains a major barrier, with EVs still beyond the reach of many middle-income households. At ST Motors, the least expensive EV costs more than 1.3 million ngultrum.

The Ministry of Infrastructure and Transport stated that the introduction of the Goods and Services Tax (GST) has also increased vehicle prices. EVs previously benefited from exemptions on sales tax and customs duties, but GST now applies to these vehicles as well.

"For petrol vehicles, because they are more affordable, it is easier to repay the loan. As for EVs, if any mishap occurs, it can take months to get the car fixed. Vehicles like ours that run on petrol can usually be repaired within a month at most, whereas EVs can take around three to four months," said Pelden, a taxi driver in Thimphu.

"EVs are very convenient, especially these days with the increase in fuel prices. Cars like this are no longer very profitable to run. But having said that, EVs are expensive. For someone older like me, if I fall sick for a week or two, I worry that I may not be able to repay the loan. With petrol cars, if we do not use them, we also do not need to spend on fuel. We can simply keep them parked. However, the loan still has to be paid every month, and if the payment is delayed, interest must also be paid. For younger people, I would advise them to drive EVs because they are convenient," said Tashi Tshering, another taxi driver.

In addition to pricing, dealers identified limited charging infrastructure, particularly outside urban areas, as another factor affecting demand.

EV charging stations currently operate across multiple locations nationwide. Thimphu has the highest concentration of charging stations, including facilities at Changlimithang, Lungtenzampa taxi parking, Bhutan Post Corporation parking, and RTC Junction. Other charging points are located in towns including Phuentsholing, Paro, Punakha, Mongar, Samdrupjongkhar, and Bumthang.

In 2025, the government announced plans to install additional charging stations across the country. If implemented as planned, Bhutan is expected to have one charging station for every 15 EVs by 2030.

Authorities are also encouraging private operators to establish EV charging stations. Under a recently approved initiative, operators can receive government support for maintenance, operations, and electricity costs. In addition, the Department of Surface Transport (DoST) is developing an EV Strategy for Bhutan.

Bhutan previously implemented a targeted subsidy programme for taxis with support from UNDP-GEF funding. Under the scheme, beneficiaries received a 70% loan repayable over seven years, along with a subsidy of up to 20% or US$ 5,500, whichever was lower.

Bhutan's EV Roadmap targets EVs to account for 70% of new vehicle sales by 2035. With EVs currently representing around 1% of the national fleet, achieving this target will require a substantial acceleration in adoption, along with significant investment in charging infrastructure and financing support for buyers.