Rev your car (and charge it, too)

Transportation globally accounts for 7 billion metric tons of CO2 every year, and 75% of that comes from vehicles on the road. Replacing gas-guzzling vehicles is the shortcut to reducing a country’s carbon footprint.

Nepal’s per capita petroleum consumption is so low that nothing we do is going to help much to save the planet. But reducing petrol, diesel and LPG use can save the country’s economy, since petroleum products make up nearly 25% of our imports.

Nepal is hardly responsible for the buildup in atmospheric carbon leading to global warming, but is one of the most vulnerable countries to climate breakdown.

In the past year, 14% of all vehicles sold around the world were battery-powered – up from only 4% four years ago. China is the biggest EV manufacturer, accounting for 60% of all EVs sold worldwide.

One of the most remarkable shifts has actually happened here in Nepal. Of the nearly 18,000 vehicles imported in the past year, official records show that 12,000 were battery-powered.

One big reason was the zero excise duty and only 10% custom duty in 2022, and last year the taxes were even less on EVs below 50kW. This was drastically lower than the 30-80% taxes on petrol and diesel cars. Taxes are higher on more powerful (and expensive) battery-powered SUVs.

The Finance Ministry has always been ambivalent about EVs, fearing rising sales will eat into revenue from car and gas station taxes, forgetting that in the longterm battery vehicles will reduce petroleum imports.

In a classic case of one step forward, two steps back, the budget by the previous government in June reinstated hefty taxes on EVs, despite a national commitment to make 20% of all vehicles electric by 2025. EVs use domestically-generated hydroelectricity of which there is a surplus, yet are punished.

Despite the rapid rise in EV sales worldwide, growth has slowed. Mainly, this is because of range anxiety and long charging times, as well as the comparatively low resale value of battery-powered vehicles. A recent survey in the US and India of EV owners had more than half of them saying they were switching back to petrol.

EVs use lithium ion batteries, and there are questions about the environmental cost of mining lithium, the difficulty in recycling and disposal of the cells, and the delays in using substitutes like sodium. Lithium is also seen as a stepping stone to solid state batteries, and green hydrogen fuel.

HYBRID FUTURE

This is where hybrids come in, as a compromise between fully battery-powered cars and those with internal combustion engines. Hybrid technology has been around much longer than modern EVs, and do not have the disadvantages mentioned above. Hybrids use a mixture of fossil fuels and electricity to power the vehicle, providing almost unlimited range.

Hybrids have batteries to store regenerated energy and different hybrids obtain power in different ways. ‘Plug-in’ hybrids can be charged like an electric vehicle, while a conventional hybrid can use the vehicle’s kinetic energy while braking, or route unused engine power to charge the battery. Most hybrids sold in Nepal are conventional.

Worldwide, hybrids make up about 10-12% of all cars sold. They are especially popular in Japan, with manufacturers like Toyota and Honda which pioneered the technology refusing to join the EV bandwagon 20 years ago.

Toyota has a 1:6:90 study in which its engineers calculated that the raw materials and energy used to make one fully-electric vehicle could make six plug-in hybrids, or 90 conventional ones -- leading to drastically less emissions in the whole manufacturing and operational cycle.

Despite the growth in EV sales, hybrid cars are rare in Nepal. Even Toyota’s popular Prius model never made inroads. Of the over 12,000 EVs Nepal imported last year, only 36 were petrol-electric or diesel-electric hybrids – despite the fact that hybrids are actually cheaper than full electric cars elsewhere.

The main reason for this is that successive Nepali finance ministers in the past decade have put hybrids in the same tax bracket as petrol cars, slapping an 80% tariff on them.

Price tags of hybrid SUVs available in Nepal are already high, and the tax pushes them into the high end of the market. The other reason is that the manufacturers themselves have in the past not trusted after-sales service for hybrids in Nepal, and not pushed them as much.

The Chinese company BYD has the largest market share among EVs in Nepal. However, in China and globally, half the cars BYD makes are hybrids.

We asked BYD Nepal’s Yamuna Shrestha why she is not promoting hybrids here. She answered simply: “Taxes.”

SUBARU (Crosstrek)

Subaru recently launched its Crosstrek Hybrid, and most of those who have bought it are doctors, businessmen, politicians, generals and traders who need to drive down to the border a lot.

“We frequently hear from customers that they simply do not get tired driving our vehicles,” says Annie Gardner Vaidya of Vijay Motors, which sells the Subaru Crosstrek at its showroom in Gyaneswor. “Subaru has the highest customer retention rates of any car brand with owners getting their second or third Subaru, even couples buying them for their marrying kids.”

The main selling point of all Subaru models are its safety features, which makes it the preferred family car. The hybrid Subarus come with features present in its petrol models – with All Wheel Drive and ‘EyeSight’ technology that uses radar and cameras to alert drivers of possible hazards and collisions.

“Our customers do their research well, and know what they want,” adds Vaidya, who has tales of Subarus that have climbed inclines where even tractors fear to tread.

Tarun Onta was one of the first customers of the Crosstrek and was at the launch event to receive his keys. He wanted an eco-friendly vehicle because he was not fully satisfied with EVs.

He says, “My top priority is safety. I have been driving the Crosstrek and other than a faint jolt when switching between electric and fuel, it has been a top-class car so far.”

Despite all this, Subarus are so rare in Nepal that when two of them pass on the road, drivers wave at each other. It only sells three models, only one of them hybrid, and is too expen sive for most first-car buyers.

Subaru Crosstrek hybrid

Type of Hybrid : Conventional (not a plug-in) Mileage : 13.9km/L Fuel Tank : 63L Price : Rs14,000,000- Rs16,900,000 Other: All Wheel Drive system, Max speed 198 km/h, ground clearance: 220, Eyesight

TOYOTA (Corolla, the Camry, the RAV4, and the Yaris)

Toyota has been a pioneer in hybrid transmission, and decided early on not to bet on full-electric cars. In fact its Prius hybrid predated full-electric cars when it was launched back in 1997 as ‘a car for the 21st century’. In Nepal, Toyota sells four hybrid models: the Corolla, Camry, RAV4, and Yaris.

Toyota Nepal’s Suryansh Vaidya is convinced that despite the surge in EV sales, Nepal is “not in a place financially and infrastructure wise where there would be mass market for EVs”. Essentially, it boils down to prices. If the taxes on hybrids were brought down, they could be competitive with full-electric vehicles, and definitely score over petrol cars.

“Reducing the tax on hybrid cars would actually increase government revenue because hybrids would be more popular and more would be sold than presently,” Vaidya argues.

Toyota Corolla Cross Hybrid Electric

Type of hybrid: Conventional Mileage:15-20km/L Fuel Tank Capacity: 36L Price: Rs18,100,000

Toyota Camry Hybrid Electric

Type of hybrid: Conventional Mileage: 15-19km/L Fuel Tank Capacity: 50L Price: Approx Rs20,000,000

Toyota RAV4

Type of hybrid: Conventional Mileage: 15-19km/L Fuel Tank Capacity: 55L Price: Rs19,500,000

Yaris Cross Hybrid

Type of hybrid: Conventional Mileage: 20-25km/L Fuel Tank Capacity: 36L Price: Rs12,500,000