In an effort to promote electric and hybrid vehicles, the government has also reduced excise duty on hybrid cars. The excise duty on electric vehicles has also been completely waived in the budget of the Fiscal Year 2078/79 B.S. In addition, the government has also reduced the customs duty on EVs.

Earlier, excise duty was levied on plug-in hybrid and hybrid vehicles at different rates, but now 40 percent excise duty has been levied on both vehicles. Earlier, hybrid vehicles were subject to 60 percent excise duty.

The Financial Ordinance now states hybrids as “other vehicles, both compression-ignition internal combustion piston engines (diesel or semi-diesel) and electric motors, can be charged by plugging an external source of electrical power.”