With the rapid adoption of electric vehicles (EVs) in Bhutan, insurance companies, financial institutions, and government agencies are holding critical discussions to address growing concerns over gaps in EV insurance coverage — particularly related to battery failures, charging issues, and breakdowns.
At a recent consultative meeting among key stakeholders, including representatives from insurance companies, the Bhutan Taxi Association (BTA), banks, and the Department of Surface Transport (DoST), the need for dedicated EV insurance policies emerged as a pressing issue.
Currently, both the Royal Insurance Corporation of Bhutan Limited (RICBL) and Bhutan Insurance Limited (BIL) offer only comprehensive and third-party coverage for EVs — similar to conventional fossil-fuel vehicles. However, officials acknowledged that the most expensive and vulnerable component of EVs, the battery, remains excluded from standard policies.
“Most problems converge from the battery, and according to our motor policy, electrical breakdowns are not covered,” said Sonam Dargay, Claims Manager at RICBL. “We are now studying ways to develop a specialized policy for EVs. At present, if an EV breaks down due to a charging station failure, there is no existing coverage for that.”
BIL’s Claims Manager, Tenzin Tenzin, also expressed similar concerns, emphasizing that battery-related damage could create major financial strain for vehicle owners.
“If there’s no insurance coverage for the battery, it’s a serious gap. We are therefore seeking feedback from all stakeholders,” he said. “We must study the root causes of defects carefully and consider a separate policy tailored for EVs.”
EV dealers and industry players echoed the same concern, noting that 70–80% of an EV’s cost lies in the battery and the absence of coverage leave owners vulnerable.
“We have approached numerous authorities, but were told there are no policies covering normal breakdowns or battery burns,” said one dealer representative.
The CEO of ST Motors added that while dealers provide warranty based on the battery’s lifespan, insurance should complement the warranty system.
“If anything happens beyond the warranty period, insurance should step in. That way, accountability can also extend to manufacturers if faults arise from design or production issues,” he said.
BTA Board Director Zimba Gyeltshen remarked that insurance documents are often too complex for customers to understand, suggesting the need for simpler and more transparent EV-specific policies.
“Based on experience, there should be a separate and clearer insurance policy for EVs,” he noted.
Calling for the need for more insurance companies in the country to promote diversity and competition in insurance policies, a taxi operator from Thimphu said, “It’s time to develop insurance systems that match the realities of EV ownership. Only then can Bhutan’s green transition be both sustainable and secure.”
Regarding issues raised by the BTA on loan deferment, taxi operators said that while it is much of a hassle maintaining an EV, they have to pay around Nu 40,000 per month in bank loans, and therefore would be a great deal of help if banks could provide further deferments.
Representatives from the Bank of Bhutan (BOB) discussed the challenges faced by EV owners seeking loan deferments, noting that nearly half of all EVs remain uninsured.
A Banking Officer at BOB said, “We have no current provisions for deferment. Past deferment schemes did not help operators sustainably.” The officer also suggested for a redemption reserve fund that could be explored by BTA from the government to support taxi operators in distress, as banks cannot waive penalties without a court order or provide deferments.
The government, represented by the Department of Surface Transport (DoST) expressed openness to working on such a fund if a well-structured proposal is submitted. DoST also recommended that future EV insurance policies includes clear exclusion clauses to avoid confusion and disputes.
To address broader EV challenges, DoST announced plans to sign a Service Level Agreement with Bhutan Power Corporation (BPC) in November for the maintenance and repair of charging stations. “The government will finance the maintenance budget and develop a mobile application within four months to help users locate operational charging stations and report faults in real time,” said Ugyen Norbu from DoST.
After the signing of a service agreement, the government will pay BPC on a monthly basis (Nu 26,000 for maintenance). If the stations are down less than 95% of the time, the payments will be deducted (Nu 10,000) on a daily basis if it remains that way. All other miscellaneous expenses will be dealt by DoST.
Stakeholders also discussed the possibility of expanding charging facilities, including potential private installations across the border in India for Bhutanese commuters, though government funding for such projects remains unlikely.
As Bhutan accelerates its transition toward electric mobility, the dialogue accentuated the urgent need for policy innovation in insurance coverage — ensuring that EV owners, especially taxi operators, are adequately protected and that the financial ecosystem evolves alongside technological change.
Tashi Namgyal
From Thimphu
