Drivers of Electric Vehicle Adoption in Kathmandu Valley: A PLS-SEM Analysis of Purchase Intentions and Willingness to Pay a Premium

Abstract

Background: The global shift toward electric vehicles (EVs) is driven by environmental concerns and supportive government policies. In Kathmandu Valley, Nepal, EV adoption remains crucial for reducing pollution and fossil-fuel dependence, yet stays low due to high costs, range anxiety, and limited charging infrastructure.

Purpose: The global rise of electric vehicles (EVs) is driven by environmental concerns and government policies. In Kathmandu Valley, Nepal, EV adoption is crucial for reducing pollution, but remains low due to high costs, range anxiety, and limited infrastructure. This study explores factors like willingness to pay and social influence to guide policymakers in promoting EV use.

Design/Methodology/Approach: The study used an explanatory research design, surveying 417 potential EV buyers. Among the respondents 56 EV users, 213 non-EV owners, and 148 non-owners but had a license and regularly used vehicles belonging to others. A pre-test with 27 experts was also conducted to refine the survey. It assessed factors like willingness to pay, environmental concerns, subjective norms, costs, self-image, and driving range. Hypothesis testing examined the relationships between these factors and consumers' purchase intentions.

Findings: The study found that consumers in Kathmandu Valley are willing to pay a premium for EVs, influenced by long-term cost savings, environmental concerns, and government incentives. Social factors, such as peer influence and awareness, also shape consumer attitudes. However, performance concerns, including range anxiety, road condition and limited charging infrastructure, remain major barriers to adoption.

Conclusion: This research analyzes factors influencing EV purchase intentions in Kathmandu Valley, focusing on awareness, environmental concerns, social influence, costs, and driving range. It highlights how willingness to pay a premium mediates purchase intention and other factors, offering insights to guide manufacturers, policymakers, and businesses in promoting EV adoption in Nepal.