Nepal EV Loan Review: Finance Minister Considers LTV Change After Auto Sector Plea
8th April 2025, Kathmandu
Finance Minister Bishnu Paudel has suggested the government may review the recent reduction in loan-to-value (LTV) ratios for electric vehicles (EVs). His comments came during the NADA Auto Dialogue 2081, held in Kathmandu on Monday.
Nepal EV Loan Review
The reduction in the LTV ratio by Nepal Rastra Bank has caused concern among business owners in the EV sector. The ratio, previously set at 80%, was lowered to 60%. Many fear this change will make electric vehicles less affordable and harder to access for the public. The decision sparked a strong response during the NADA Auto Dialogue. Industry representatives highlighted the negative impact this policy change could have.
Government’s Response
In response, Minister Paudel acknowledged the concerns of the business community. “Although Nepal Rastra Bank is independent, the government listens to your concerns,” he stated. Paudel assured that the government is open to discussions and may revisit the policy. This statement suggests the government is willing to engage with stakeholders to find a suitable solution.
Paudel’s Commitment to Dialogue
Minister Paudel also emphasized the value of the NADA Auto Dialogue in shaping future policies. He stressed that the government is in the process of collecting suggestions for the national budget. “We will include the auto sector’s concerns in the policy-making process,” Paudel said. This commitment signals that the government may adjust the policy to support the EV sector and its stakeholders.
Impact of the LTV Ratio Adjustment
The new 60% LTV ratio has created challenges for the EV market. Buyers now have to pay a larger portion of the vehicle’s price upfront. This could make EVs less affordable for many potential buyers, slowing the adoption of electric vehicles in Nepal. Business leaders argue that this policy change could hinder the growth of the sector.
Industry Leaders Speak Out
Karan Chaudhary, President of the NADA Automobiles Association of Nepal, voiced his concerns about the policy. He stated, “Vehicles are a necessity for the public. Without easy access to mobility, our country cannot progress.” Chaudhary expressed dissatisfaction with the reduced loan amounts, which he believes will hurt the industry’s development. He argued that the government should support the sector to encourage the growth and adoption of EVs.
The Need for Policy Support
Chaudhary highlighted the importance of the auto sector beyond just selling vehicles. The sector plays a crucial role in industrial development, job creation, and economic growth. “We want to be recognized as an industry, not just traders,” he said. He called for policies that support the auto sector’s growth, helping businesses thrive while promoting sustainable transportation options like electric vehicles.
Looking Forward to Potential Revisions
Minister Paudel’s comments offer hope that the government may reconsider the LTV ratio change. The willingness to discuss the issue shows a positive step toward finding a balanced solution. As the government prepares for the national budget, the concerns of the auto sector may influence policy decisions. These changes could ensure the continued growth of the EV market in Nepal.
For more: Nepal EV Loan Review
