Following a surge in imports of Chinese electric vehicles (EVs) ahead of the announcement of the budget for the fiscal year 2025/26, customs offices have now reported that such imports from China have almost come to a standstill.

Fearing a possible increase in customs duties, importers brought in large numbers of electric four-wheelers before the budget was presented on May 29. However, contrary to expectations, the government did not raise customs rates in this segment through the budget.

Officials at the Rasuwagadhi and Tatopani customs offices reported that in the past ten days, imports of such vehicles from China have virtually been zero. According to them, most of the imports at present consist of clothing and fruits. Importers have stopped bringing in electric vehicles.

Rabindra Prasad Pyakurel, a customs officer at the Rasuwagadhi Customs Office, told New Business Age that while Chinese EVs were still being brought in for a few days after the budget announcement, there have been none recently. According to him, around 500 vehicles were imported during the week following May 29. Since then, no EVs have received customs clearance.

“There are currently about 500 vehicles in the customs yard, including those brought in before and after the budget,” he said. “These vehicles are being gradually cleared and taken away.”

He added that importers may have already brought in large quantities of vehicles and stopped importing more due to low demand. Some vehicles brought to customs are yet to get customs clearance.

Officials at the Tatopani Customs Office also confirmed that no new EVs have arrived through the border point of late, although vehicles previously imported are still at the yard. According to a senior official, the inflow of additional vehicles has come to a standing halt.

The new budget has kept the customs duty and excise duty on electric vehicles unchanged. Currently, EVs up to 50 kilowatts are subject to a combined 15% tax (customs and excise). EVs between 51–100 kW are taxed at 20% customs and 15% excise duty; those between 101–200 kW at 30% customs and 20% excise duty; 201–300 kW at 60% customs and 35% excise duty; and above 300 kW at 80% customs and 50% excise duty.

Expecting a rise in duties, EV importers had brought in unusually large numbers of vehicles ahead of the budget. According to the Department of Customs, EV imports surged sharply from mid-April to mid-June including imports of 1,400 electric vehicles in a one-month period between mid-April and mid-May alone.

Although importers stocked up EVs due to expectations of higher duties, the budget retained the previous tax structure. As a result, competition among traders to sell the now-accumulated vehicles is expected to intensify. Some sellers say this competition could drive prices down.

"Keeping vehicles in stock for too long could lead to losses, so sellers are likely to compete to sell them quickly, which may lead to price drops compared to earlier," one seller said. He added that due to the large number of vehicles in stock, they may be forced to sell at lower prices. Dealers are preparing to offer minimal profit margins just to recover their costs.

"Sales plans will be announced soon," the seller added.

Two automobile industry bodies, NADA Automobiles Association of Nepal and Nepal Automobile Imports and Manufacturers Association (NAIMA), are planning to organize an auto expo in August. According to the seller, importers are aiming to sell large numbers of vehicles during the event.

"Right now, sales are slow, but since vehicles may be available at lower prices during the auto expo, we hope demand will pick up," he said.