Ashim Pandey, Founder, Yatri Motorcycles, in his response to the 2020/21 Budget announcement said that the budget puts more pressure on the EV industry while the sector was hopeful that the government would take steps to flourish the industry. And the biggest miss has been the support for domestic EV manufacturers. Although the PM’s vision of an eco-friendly Nepal has taken a backseat with the upcoming budget, Yatri Motorcycles still believes EV is the future of mobility. Here’s his opinion on the budget:
At Yatri, we are a team of engineers driven by excellence and focused on creating great products so that we can take Nepali product design and engineering to the global stage. We might not have the best understanding of the policies and economics at the national level, however, we know that some of the latest policies are not farsighted and not in the best interest of our nation’s future.
The only point we want to address here is the increase in the tax of the electric vehicles. The Honorable Finance minister might have some valid points in thinking that lowering the taxes will increase the influx of these vehicles draining the national resources outside. He mentioned that the taxes are tiered and these rates are stipulated in terms of power and cost price. While we agree such a tiered strategy could be beneficial, it seems the policymakers failed to capture the big picture.
Production Design iteration of Yatri’s Project Zero (v3.0). More on the Project Zero here
While a low tax on EVs results in a short-term reduction in government revenue, it significantly increases government revenue in the long term by first, reducing the import of petroleum and second, increasing consumption of home-produced electricity. In 2017, we spent just over $700 million on importing vehicles compared to $1.5 billion on importing fuel according to Trading Economics (https://tradingeconomics.com/nepal/imports-by-category). Incentivising EVs to save that $1.5 billion seems to us an obvious path towards reducing the outflow of national resources and supporting the national energy sector but the new policy does exactly opposite of that.
One way to justify the tax would be to grow and support local manufacturers of EVs, such as Yatri, but we have not seen any steps taken towards this yet.
One way to justify the tax would be to grow and support local manufacturers of EVs, such as Yatri, but we have not seen any steps taken towards this yet. We should understand that these local manufacturers’ presence will result in numerous other industries to crop up to support the supply-chain creating countless highly skilled employment in the field of engineering, precision manufacturing, software, and cutting edge research. These policymakers should be aware that supporting such initiatives is what will truly make our nation independent. It seems like an unspoken agreement that such products simply cannot be manufactured in Nepal. While we agree that it is a challenging task, the Yatri team is determined to change that mentality and when we do, we hope the government will be ready to support us and other companies like us.