𝐄𝐕 𝐓𝐚𝐱𝐢 𝐒𝐜𝐡𝐞𝐦𝐞 𝐒𝐭𝐮𝐦𝐛𝐥𝐞𝐬 𝐀𝐦𝐢𝐝 𝐅𝐢𝐧𝐚𝐧𝐜𝐢𝐚𝐥 𝐚𝐧𝐝 𝐒𝐞𝐫𝐯𝐢𝐜𝐞 𝐇𝐮𝐫𝐝𝐥𝐞𝐬

…𝑻𝒂𝒙𝒊 𝑫𝒓𝒊𝒗𝒆𝒓𝒔 𝑺𝒕𝒓𝒖𝒈𝒈𝒍𝒆 𝒘𝒊𝒕𝒉 𝑳𝒐𝒂𝒏 𝑹𝒆𝒑𝒂𝒚𝒎𝒆𝒏𝒕𝒔 𝒂𝒔 𝑬𝑽 𝑹𝒆𝒑𝒂𝒊𝒓𝒔 𝑳𝒂𝒈

By Kezang Choden

Bhutan’s ambitious drive towards a green transportation system is encountering challenges, as maintenance issues and loan defaults emerge in the country’s Electric Vehicle (EV) taxi program. The initiative, part of the “Bhutan Sustainable Low-Emission Urban Transport System” project funded by the United Nations Development Program (UNDP), has aimed to replace a significant portion of Bhutan’s fossil-fuel-based taxis with environmentally friendly EVs. This move aligns with Bhutan’s long-standing commitment to sustainable development and reducing its carbon footprint.
Currently, Bhutan has 620 registered EVs, of which 300 are dedicated to taxi services under a loan scheme that offers generous incentives. Taxi drivers participating in this scheme benefit from a 20 percent subsidy on the vehicle’s price, equivalent to USD 5,500, and a collateral-free loan covering 70 percent of the cost. The remaining 10 percent is contributed by the drivers, with support provided under a Group Guarantee Scheme, facilitated in partnership with the Bank of Bhutan.

Despite the initiative’s good intentions, recent reports reveal that approximately 10 EV taxis have experienced breakdowns, while 71 drivers have defaulted on their loans. Issues cited include a lack of post-sales services for EV accidents and breakdowns, delays in vehicle delivery by local dealers, and unauthorized EV taxi sales without proper ownership transfer via the Bhutan Construction and Transport Authority (BCTA) or notification to financial institutions. These challenges are reportedly affecting drivers’ ability to keep up with their loan payments, creating strain for both the drivers and the financial institutions supporting them.

“While not all loan defaults are due to valid reasons, such as vehicle damage and lack of essential spare parts, the Department of Surface Transport, in partnership with the Bank of Bhutan, has reviewed and approved loan deferment for eight EV taxi drivers with genuine cases,” stated Lyonpo Chandra Bdr Gurung, the Minister of Infrastructure and Transportation. According to Lyonpo Chandra Bdr Gurung, the government is working on strategies to distribute financial risks more equitably across financial institutions, the government, and the beneficiaries, in a bid to stabilize the program.

One significant point of frustration for EV taxi drivers has been the lack of post-sales service from local dealers. Drivers report challenges in getting spare parts and prompt repairs, especially in cases of breakdowns or accidents. In response, the government has recently mandated that local dealers supply spare parts and conduct essential repairs within a defined turnaround time (TAT). Dealers who fail to comply with these requirements may face financial accountability for any resulting loan defaults, placing more responsibility on the supply side to ensure vehicles remain operational.

Lyonpo Chandra Bdr Gurung noted that the government is also focusing on diversifying its supply chain and bringing in more suppliers to reduce dependency on a single dealer. By attracting additional suppliers, the government hopes to streamline logistics and improve access to spare parts, allowing for quicker repairs and minimizing vehicle downtime.

The government remains committed to sustainable transport, viewing EVs as a vital component of Bhutan’s future urban transport system. However, as Lyonpo Chandra Bdr Gurung highlighted, the program’s long-term success depends on a balanced approach that includes financial support, improved post-sales services, and collaborative risk-sharing arrangements. Ongoing maintenance support and financial stability for drivers are critical to realizing the full potential of Bhutan’s EV taxi program and meeting the nation’s environmental goals.

As Bhutan continues to tackle these operational and financial challenges, the success of the EV taxi initiative will largely depend on the government’s ability to refine policies, address the drivers’ concerns, and ensure a robust support system that can accommodate the unique needs of EV taxi operators across the country.