For years, buying an EV in Nepal meant a smaller down payment than a comparable petrol car, because banks could finance up to 80% of an EV versus 50% for a fossil-fuel vehicle. That gap is gone. Since September 2025, both categories share the same 60% loan-to-value ceiling for private vehicles. So does it still matter whether you finance an EV or a petrol car? It does — just not for the reason it used to. This article compares what actually drives your down payment and total cost today.
Quick Answer
- Down payment percentage is now identical: both private EVs and petrol/diesel cars are capped at 60% LTV, so you need a minimum 40% down payment either way.
- The down payment amount in rupees still differs mainly because the on-road prices of comparable EV and petrol models differ, largely due to Nepal's very different tax treatment of the two categories.
- Under the FY 2026/27 budget, EVs face a flat 20% customs duty plus a value-based Clean Infrastructure Investment Fee, replacing the old motor-power-based excise system.
- Petrol and diesel vehicles continue to face customs duty around 80% plus excise duty from roughly 60% to over 100% depending on engine size, keeping their cumulative tax burden much higher.
- Large public-transport EVs get a separate 80% LTV window, but that does not apply to a personal car purchase.
Why the Down Payment Percentage No Longer Differs
The financing side of this comparison is now simple: the loan-to-value ratio for both internal combustion engine vehicles and electric vehicles is capped at 60% under current NRB directives, meaning buyers of either type must manage a minimum 40% down payment. This is a direct consequence of the September 2025 restructuring that unified what used to be an 80%/50% split into one flat rule. If you are comparing two loan quotes purely on down payment percentage, an EV and a petrol car at the bank will look identical.
Where the Real Difference Comes From: Vehicle Price, Not LTV
Since the down payment percentage is now the same, the rupee amount you need up front is driven almost entirely by the vehicle's on-road price — and that is where EVs and petrol vehicles diverge sharply, because Nepal taxes them very differently.
Electric vehicles (FY 2026/27 tax structure)
- Flat 20% customs duty applied to the vehicle's CIF (cost, insurance, freight) value, regardless of motor size
- Excise duty abolished entirely and replaced with a Clean Infrastructure Investment Fee (CIIF) that scales with price: roughly 2.5% for CIF value up to Rs 20 lakh, rising in tiers to 110%+ for CIF value above Rs 50 lakh
- A 5% Road Development Fee also applies on CIF value, plus standard 13% VAT
Petrol and diesel vehicles
- Customs duty generally around 80%
- Excise duty ranging from about 60% to over 100% depending on engine displacement (CC)
- 13% VAT applied on top of the cost, customs and excise total, with cumulative duties on larger-engine vehicles commonly exceeding 250%
The practical effect: two vehicles that might have similar factory or import costs can end up with quite different on-road prices in Nepal after tax, and that gap — not the LTV percentage — is what now separates the actual rupee down payment on an EV versus a petrol car.
Down Payment Side-by-Side Calculator
Enter the on-road price you have been quoted for an EV and a comparable petrol vehicle to see the down payment and loan amount for each at the standard 60% LTV.
EV vs Petrol Down Payment Calculator
Please enter valid prices greater than zero for both vehicles.
Electric vehicle (60% LTV)
Petrol/diesel car (60% LTV)
Beyond the Down Payment: Total Cost Factors
| Factor | Electric vehicle | Petrol/diesel vehicle |
|---|---|---|
| Financing LTV (private vehicle) | 60% | 60% |
| Import tax structure | 20% customs + tiered CIIF + 5% RDF + 13% VAT | ~80% customs + 60–100%+ excise + 13% VAT |
| Used-vehicle financing | Emerging; e.g. NMB Bank up to 55% LTV with battery-health checks | Widely available through standard used-car loan products |
| Loan tenure (typical) | Up to 7 years new, up to 5 years used | Typically up to 5–7 years depending on bank |
| Depreciation risk factor | Battery State of Health affects resale and refinancing | Engine condition and mileage affect resale |
Common Mistakes When Comparing the Two
- Assuming EVs still get preferential LTV. That changed in September 2025 for private vehicles; both fuel types share the 60% cap today, aside from the large public-transport EV exception.
- Comparing sticker prices instead of on-road prices. Tax structure differences mean the gap between a vehicle's base price and its final on-road price can be substantial and very different between an EV and a petrol equivalent — always compare the final financed price.
- Ignoring that EV tax brackets are tiered by value. Under the FY 2026/27 CIIF structure, a higher-value EV can face a dramatically steeper fee than a lower-value one, so "EVs are always cheaper to import" is not a safe assumption at every price point.
- Overlooking used-vehicle financing gaps. If you are considering buying used, note that used-EV loan products currently carry a lower LTV (around 55% at launch for NMB Bank) and added eligibility conditions like battery health checks, which a used petrol car loan typically does not require.
Frequently Asked Questions
Do EVs still require a smaller down payment than petrol cars in Nepal?
Not as a rule. Since September 2025, both private EVs and petrol/diesel vehicles are capped at 60% LTV, requiring a minimum 40% down payment either way. Any remaining difference in the rupee down payment comes from differences in the vehicle's on-road price, not the financing percentage.
Why are EV and petrol vehicle prices still so different if the LTV is the same?
Nepal taxes the two categories very differently. EVs face a flat 20% customs duty plus a value-based Clean Infrastructure Investment Fee under the FY 2026/27 budget, while petrol and diesel vehicles face roughly 80% customs duty plus 60% to over 100% excise duty depending on engine size. This tax gap, not the loan rule, is what usually makes a comparable EV cheaper on-road than a petrol vehicle.
Is there any vehicle category where EVs still get a better loan deal?
Yes. Large passenger electric vehicles used in public transport, such as electric buses, qualify for an 80% LTV under a 2026 monetary policy provision, which is meaningfully better than the 60% cap on private vehicles of either fuel type. This does not extend to a personal EV car purchase.
Does financing a used EV cost more upfront than a used petrol car?
It can. Some banks apply a lower LTV to used EVs than the 60% regulatory ceiling — for example, one bank's used-EV product finances up to 55% — along with battery health requirements that a used petrol car loan does not need. Always compare the specific used-vehicle loan terms rather than assuming parity.
Could the EV tax structure change again before I buy?
It changed substantially with the FY 2026/27 budget announced in May 2026, and industry groups have already raised concerns about the new tiered fee structure. Vehicle taxation in Nepal is reviewed with each annual budget, so confirm the current duty structure with a dealer or customs source close to your purchase date.
Related reading: See the full financing rules in Auto Loan LTV Rules in Nepal 2026, compare lenders in our bank-wise interest rate comparison, or read about how used EV loans work if you are considering a second-hand vehicle.
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