KATHMANDU: Nepal is witnessing a steady decline in the import of internal combustion engine (ICE) cars as new electric vehicles (EVs) flood global markets. With EV imports growing with every passing month, the second-hand EV market is also beginning to take shape.
Technological advancements, mass production and falling high-voltage battery costs have driven down the price of new EVs. As a result, the value of used EV is also falling at the same pace. Second-hand EVs are only trickling into the market in small numbers in Nepal. Despite this, the price of EVs used for one or two years are 30-40% lower than the market price.
People involved in the business of used vehicles say it is difficult to determine the price of used EVs as their value cannot be calculated like used ICE cars, which are assessed based on kilometers driven and manufacturing year. The lifespan of an EV hinges largely on its high-voltage battery. However, traders lack the tools to accurately measure battery health. Due to the sophisticated technology involved, only authorized service centers can reliably assess an EV’s condition.
Financing poses another major obstacle in selling used EV. While banks and financial institutions readily offer up to 80% financing for new EVs, such is not the case with used ones. Traders say it is difficult to secure bank financing for even EVs just three months old. According to officials of Hulas Fin, the leading financier of second-hand vehicles in Nepal, the limited presence of EVs in the used vehicle market and the absence of a stable valuation system complicate refinancing. They say that used EVs can be financed only if they are evaluated by an official body.
This financing gap creates a stark contrast between new and used EVs. Buyers can drive home a new EV worth up to Rs 5 million with a down payment of just Rs 1 million. However, a used EV, even at a reduced price of Rs 3.5–4 million, requires full cash payment due to the lack of financing options. As a result, many buyers opt for new EVs instead.
EVs are often likened to gadgets like laptops or smartphones whose value depreciates rapidly after purchase. This rapid value loss is due technological advancements and intense market competition.
Another important factor is that EV technology is advancing quickly. Newer models boast longer battery life and faster charging, rendering older versions outdated and harder to resell. When companies lower prices of new models, used EVs become less valuable, raising concerns among buyers about their resale value. Experts, however, say that the resale value may stabilize over time, offering hope for a more balanced second-hand market in the future.
