KATHMANDU: The Supreme Court has issued a mandamus directing authorities to revise Nepal’s electric vehicle (EV) loan policy and adopt a clear, stable policy framework to promote EV use.
A joint bench of Justices Binod Sharma and Meghraj Pokharel quashed the revised EV loan directive issued by Nepal Rastra Bank (NRB) on January 13, 2025. The directive had reduced the loan-to-value (LTV) ratio for EVs from 80 percent to 60 percent.
The order was issued in response to a writ filed by advocates Sanjay Adhikari, Rupa Basnet, and Raj Mohan Singh on behalf of the Academy for Public Interest Law. The respondents included the Office of the Prime Minister and Council of Ministers, the Ministry of Finance, Nepal Rastra Bank, and the Ministry of Forests and Environment.
The petition argued that lowering the LTV ratio discouraged EV adoption and contradicted environmental goals. The court agreed and directed NRB to amend the loan policy in a way that supports EV promotion.
Advocate Adhikari said the court issued the order largely in line with the petition’s demands. He added that detailed implications would be clearer after the full text of the verdict is released.
He said frequent changes in EV-related tax and financial policies have created uncertainty. Such instability, he said, does not encourage wider EV adoption.
NRB spokesperson Guru Prasad Paudel said the central bank cannot make immediate changes as the full verdict has not yet been received.
The Supreme Court also issued directives to the government to promote non-polluting transport. These include developing cycle lanes in cities and preparing long-term environmental protection plans.
The writ had cited rising air pollution from petroleum-powered vehicles. It noted that air quality in the Kathmandu Valley has reached hazardous levels, affecting public health.
According to international reports cited in the petition, air pollution causes around 48,500 deaths annually in Nepal. Vehicle emissions were identified as a major source, with EVs described as the only sustainable alternative.
