Which Policies and Factors Drive Electric Vehicle Use in Nepal?

Abstract

Electric vehicles (EVs) offer a viable technological solution for mitigating greenhouse gas emissions in the transportation industry, addressing pressing societal concerns regarding climate change, air pollution, and sustainable energy consumption. To effectively promote widespread adoption of EVs, it is crucial to understand consumer preferences and evaluate market dynamics. In Nepal, where proven fossil fuel reserves are absent, the government is actively working towards accelerating EV adoption, leveraging the nation’s significant hydroelectric power generation potential to fulfill EVs’ charging demands. To gain insight into consumer preferences and evaluate market dynamics regarding EVs in Nepal, this study employs a comprehensive approach. Stated preference data are collected through a meticulously designed survey, and sophisticated analytical techniques, namely, the mixed logit model and latent class model, are applied for estimation purposes. The results of this study show that potential EV consumers with small family sizes, lower monthly travel distances, heightened environmental awareness, and substantial knowledge about electric vehicles are more inclined to embrace EV technology. Notably, the study highlights that a reduction in the purchase price exerts the most significant influence on increasing consumers’ likelihood of adopting battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs). Market simulation results suggest that a policy mix scenario, encompassing a combination of supportive measures, proves more effective in promoting EV adoption compared to relying on single policy initiatives. Furthermore, through latent class estimation, the study identifies three distinct classes of consumers within Nepal, each exhibiting significant variations in preferences. Recognizing and addressing these variations within policy frameworks is crucial for the successful promotion and widespread acceptance of EVs in Nepal.