Kulman Ghising, the newly appointed Minister for Energy, Infrastructure and Transport post the GenZ-led revolution, has recently spoken about his vision to make Nepal’s transport systems more electric-vehicle (EV) friendly. This is an ambitious but important goal for Nepal. Private EV ownership as reported by the New York Times is already surging in the county with EVs now making up a whopping 76% of vehicular imports due to reduced operational costs, tax rebates and increased national electricity supply from hydropower projects.
But what about public transport? Our reliance on aging diesel buses, tempos,and microbuses is a huge financial burden as petroleum imports continue to weigh on the economy with the total import of petroleum accounting for Rs 354 billion in the fiscal year of 2023-2024 which was about 18.87% of Nepal’s total imports in the review year, according to the Trade and Export Promotion Centre. Furthermore, Kathmandu’s air quality consistently ranks amongst the worst in the world and vehicular emissions quite literally add fuel to this fire. The question therefore is not whether Nepal should move towards EV public transport, but how quickly and effectively it can transition.
Lessons from Neighbours
Nepal needs not chart an untested course. Across the world, governments, specifically their neighbours, have demonstrated that the electrification of public transport is achievable when policy clarity, financial incentives, and political resolve align.
In Shenzhen, China, within the span of a decade, the city transformed its fleet of more than 16,000 buses into fully electric vehicles. This transition was not an accident of the market but the outcome of deliberate statecraft: heavy subsidies, uncompromising emission standards, and systematic investment in charging infrastructure. Nepal may not possess the fiscal or administrative scale of China, yet the principle holds true. Where there is consistency in policy and certainty in financing, the transition gathers momentum.
In Delhi, India, over the past three years, the city has rolled out thousands of electric buses using a carefully designed blend of subsidies, leasing models, and public–private partnerships. By prioritising routes with the highest passenger density and pollution levels, the Indian government maximised both environmental and social impact. For Nepal, the lesson is not to copy these experiences all together but to adapt their strategies such as the financing structures and phased deployment for Kathmandu Valley and other urban centres.
Roadblocks at Home
Nepal’s own landscape is not without obstacles, the first and most visible being infrastructure. A handful of charging stations may suffice for private vehicles, as they have, but an electrified fleet requires a far more ambitious network of high-capacity charging hubs strategically placed across cities and highways. Without them, even the most advanced electric buses will remain idle assets.
The question of financing looms just as large. This is because while electric buses are far cheaper to run over their lifetime, their purchase price is three to four times higher than diesel alternatives. For example, according to former Chief Executive Officer of Sajha Yatayat Mahendra Raj Pandeya, the EV buses were bought by the Lumbini Development Trust through the Asian Development Bank at the cost of Rs 20 million each. In contrast, a diesel run vehicle retails for approximately Rs 4 to 5 million each. Private operators, already working with thin margins, are unlikely to take on this risk without concessional loans, leasing options, or government-backed guarantees. If the state does not step in, the transition will stall, but if it does, it also takes on fiscal exposure for instance through subsidies, credit guarantees, or direct procurement which can strain budgets already stretched by competing priorities like health, and education and reconstruction of public infrastructure post GenZ-led revolution. This creates a delicate balancing act: the government must support operators enough to de-risk investment while avoiding unsustainable liabilities, making financial innovation and phased pilots critical for a socially and fiscally viable EV rollout.
Legal and institutional gaps compound these difficulties. The Transport Management Act was enacted in January 1993, an era where electric mobility had not at all grown in popularity in Nepal. Understandably, the Act offers no provisions for procurement standards, licensing, or safety norms tailored to EV fleets. Nor do municipalities, the bodies most directly responsible for managing urban transport, have clear mandates to regulate an electric transition. Legislative reform is therefore indispensable.
Finally, there is the human and political dimension. Transport syndicates, long entrenched in Nepal’s public transport ecosystem, control routes, fares, and fleets with considerable influence. Any attempt to displace diesel buses and microvans without a just transition plan will inevitably meet resistance. Because of this influence, syndicates can mobilize strikes, road blockades, or political lobbying to resist reforms that threaten their dominance. If the government pushes for an aggressive shift from diesel buses and microbuses to electric fleets without addressing these groups, the backlash could paralyze urban mobility and derail the policy itself. Operators would therefore likely need to see a pathway whether that be through scrappage schemes, subsidies, or retraining programmes that protects their livelihoods even as the system modernises.
Policy Pathways Forward
Suppose an EV-friendly environment for public transport is to be brought to light. In that case, the government may benefit from adopting a phased yet decisive strategy and immediately several priorities stand out:
1. Legal reform must come first. Nepal’s Transport Management Act has yet to recognise electric mobility as a mainstream option. In 2022, when Sajha Yatayat imported its first set of electric buses, it had to navigate ambiguous procurement rules and licensing delays that slowed deployment. Updating the law to explicitly cover EV fleets, set electrification targets, and empower municipalities would prevent such bottlenecks from recurring and is a fundamental first step. Without targeted amendments, similar delays will recur every time new operators or municipalities attempt to introduce EV fleets. Updating the Act to explicitly define electric vehicles as part of the national transport system, set measurable electrification targets, and grant municipalities the authority to regulate and facilitate EV deployment would not only remove these bottlenecks but also signal to investors and operators that Nepal is serious about a long-term transition. In this sense, legal clarity is demonstrative of political will.
2. Public–private partnerships can be very useful. The burden of expanding charging networks cannot fall solely on government budgets. A useful precedent can be seen in the collaboration between Sajha Yatayat and private EV suppliers for the rollout of electric buses in Kathmandu, where charging facilities were co-financed and operated jointly. This model of shared responsibility demonstrates how costs and risks can be distributed, and it could be scaled into larger high-capacity hubs designed specifically to serve public bus fleets across major urban corridors.
3. Financing must be reimagined. Sajha Yatayat’s electric bus project revealed the financing challenge clearly: while the operating costs were attractive, the upfront capital was prohibitive without donor support. One way forward is to build on Nepal Rastra Bank’s decision to include EV loans under its priority sector lending scheme, ensuring operators can access concessional credit to purchase fleets. Expanding this policy to public transport operators would unlock wider adoption.
4. Phased rollouts offer the most practical path.The Sajha electric bus trial routes in KathmanduValley already show how limited pilots can build public confidence. Rather than attempting an immediate national rollout, the government can prioritise Ring Road based travel and key inter-city corridors such as Kathmandu to Pokhara or Kathmandu to Chitwan, where passenger density and pollution levels are highest. Lessons from these pilots, including consumer and driver surveys could potentially inform a gradual, scalable transition.
5. Transition schemes for existing operators are equally crucial. Resistance from microbus and diesel bus syndicates is not new, in fact it is predictable. Similar tensions emerged during Sajha’s attempts to expand its modern bus services. For Nepal, a practical version of such a scheme could look like this: the government (with support from development banks such as the Asian Development Bank and the World Bank) sets up a scrappage fund where microvan or diesel bus owners can hand in their vehicles and receive either (a) a cash incentive based on the residual value of the vehicle, or (b) credit vouchers that can be used toward the lease or purchase of an electric bus. For small operators who cannot afford to buy outright, the government could help form ‘EV cooperatives’, where multiple owners pool their scrappage credits to co-own an electric bus fleet. For example, if five microbusowners each trade in their old vehicles, they could collectively acquire shares in a new electric minibus operated under a cooperative model. This not only cushions the financial loss for existing operators but also ensures they remain part of the evolving transport ecosystem rather than being pushed out by larger companies or foreign investors.
The transition to electric public transport is a matter of political courage and institutional clarity. Nepal already has the ingredients: abundant hydropower, rising public acceptance of EVs, and a pressing economic and environmental rationale especially post GenZ-led revolution. What remains is the capacity to align law, finance, and governance with this vision. If handled with foresight, the shift could do more than clean city air or reduce petroleum imports, in that it could redefine how mobility, equity, and sustainability intersect in our cities. The challenge now is whether policymakers can move beyond rhetoric to construct the legal, financial, and social architecture necessary to make an EV public transport revolution both credible and enduring.
(The author is a legal professional with a strong interest in law and the wider field of social sciences. She holds an LLB from the University of Kent, an LLM from King’s College London, and has recently completed a second LLM at the University of Law.)