Nepal's automotive market has experienced increased activity, with electric vehicles (EVs) being introduced across the passenger, commercial, two-wheeler and three-wheeler segments.

This has coincided with price competition and logistical challenges following flooding and landslides.

Before the latest disruptions, Kathmandu hosted the NAIMA and NADA auto shows, which showcased a large number of EVs across the two-wheeler, three-wheeler, four-wheeler and commercial vehicle segments. The shows featured vehicles at various price points, increasing the range of models and specifications available to customers, while also requiring them to consider more alternatives when selecting a vehicle.

The market has changed since a column published a year ago reported that Nepal's EV market was peaking. EV market activity has continued, with competition between manufacturers resulting in changes to vehicle pricing. Pricing and offers from China's numerous EV manufacturers have affected the Nepalese market, with manufacturers and importers introducing lower prices and customer offers. Several new and existing EVs have been positioned at prices that have reduced the difference between some vehicle segments.

Examples include the Nammi Box, Nammi Vigo and Deepal Nevo Q05. The hatchback-sized Nammi Box received a NPR 100,000 (US$ 650) price reduction from its previous entry price of NPR 3.1 million, while the Nammi Vigo compact SUV was reduced to NPR 3.8 million following the removal of some minor features, including a panoramic moonroof.

The Deepal Nevo Q05 is marginally smaller than its larger sibling, the S05, and was launched with an introductory price of NPR 4.7 million.

Larger manufacturers subsequently announced price reductions and feature updates. BYD reduced the price of the Atto 2 from NPR 4.9 million to NPR 4.6 million, although the updated offering has a smaller battery pack. The new Chery QQ3, a compact SUV hatchback, was launched at an introductory price of NPR 3.1 million, undercutting the recently launched Proton Emas5, a similarly sized vehicle, by a few hundred rupees.

The mid-size SUV segment also saw price reductions. The Jaecoo J5 was offered at NPR 4.8 million with a smaller battery configuration, compared with its initial launch price of NPR 6.1 million at last year's NAIMA Expo. Leapmotor also reduced the price of its recently launched B03X from NPR 4.7 million to NPR 4.5 million.

Larger premium EVs were also subject to price reductions. BYD launched an updated Sealion 7 with a larger 150 kW motor, compared with the previous 99 kW limit imposed due to tax brackets, at NPR 9.3 million. The Leapmotor C10 is now priced at NPR 7.6 million.

These price reductions have narrowed the difference between some vehicle segments, allowing customers to consider larger vehicles, additional features and greater driving range by spending a few additional lakhs.

The expansion of the EV market has also raised questions about after-sales support, maintenance and safety. The recent death of a driver in Bharatpur after an EV caught fire has drawn attention to these issues. Unlike traditional ICE vehicles, EVs cannot necessarily be serviced and maintained at every workshop, while the cost of maintaining spare-parts inventories and employing skilled workers is high. This raises questions about whether importers will maintain their after-sales commitments over the longer term.

The automotive market is also facing disruptions to vehicle supply routes. The Rasuwagadi checkpoint, which was damaged in last year's floods, had only recently resumed its role as the main entry point for EV imports from China when it was hit by a massive debris flow on August 26th. There is no record of the number of cars and vans that were washed off the road from the border along the Pasang Lhamu Highway that day.

Following the floods, deliveries to customers who booked vehicles at the auto shows have faced delays because vehicles have been rerouted through the longer Korala checkpoint in Mustang. The border point remains relatively underdeveloped, and its ability to accommodate a sudden diversion of containers and commercial traffic is uncertain. Nevertheless, nearly 700 Chinese EVs have entered Nepal through Korala since August 26th.

EVs arriving through Korala, as well as vehicles imported through the Indian border, have also been affected by the two-week landslide-related disruption on the Prithvi Highway.

For importers, these disruptions are likely to result in longer transit times, more complex logistics and higher costs amid the ongoing price competition. The extent to which these costs will ultimately be passed on to consumers remains unclear.

The combination of increased EV availability, price reductions and new model launches has contributed to continued activity in Nepal's automotive market. However, supply-chain disruptions remain a constraint on vehicle deliveries. With key trade routes still vulnerable to late-monsoon highway disruptions, the potential impact on EV supply and pricing remains a concern.