Bangladesh is intensifying efforts to adopt electric vehicles (EVs) to align with global sustainability trends. However, despite significant strides in policy formulation and infrastructure development, the nation faces hurdles in realising its electric mobility ambitions.
Yet, the transition to EVs has been sluggish. One of the major impediments lies in the import rate, with EVs incurring an 89 per cent import tax, including a hefty 20 per cent supplementary duty, rendering them less competitive against conventional vehicles.
Global automobile manufacturers are shifting their focus towards the production of fully electric vehicles. According to market research firm Rho Motion, 13.6 million EVs sold around the world in 2023.
As per the Bangladesh Road Transport Authority (BRTA), 60,58,999 vehicles have been registered till April 2024. But only 250 EVs have become registered till now, which is quite low compared to other internal combustion engine (ICE) vehicles.
Despite boasting a comparatively low carbon footprint globally, Bangladesh is striving to reduce emissions further, targeting a cut of 89.47 million tonnes of carbon dioxide by 2030 by adopting EVs.
In the current fiscal year, the NBR introduced an environmental surcharge or carbon tax for multiple car owners, which applies for both ICE and EVs.
Under the move, the owner of a car having up to 1,500cc or 75kW engines is subject to pay Tk 25,000 as environmental surcharge. The surcharge is doubled to Tk 50,000 for a car having the engine capacity of 1,501cc to 2,000cc or more than 75kW to 100kW.
Joint Secretary Md Anisur Rahman of Road Transport and Highways Division (RTHD), under the Ministry of Road Transport and Bridges, said, “Fast adaptation to EV intervention is happening all over the world. The developed world subsidises a portion of the budget every year.
“Because, government intervention is necessary to reduce the initial cost of EVs. Regarding the environmental surcharge for buying a second car which is applicable for EV too, he said, “It has been given to BRTA for review because then no one will be interested in EVs.”
About the 20 per cent supplementary duty on EV imports, he said, “It should be reduced at all costs. The ICT Ministry has to decide how to do it."
BRTA Director (Engineering) Sitangshu Shekhar Biswas said, “Only 250 EVs have been registered so far. The number is low due to high prices and lack of infrastructural facilities such as charging stations.
“Government incentives, such as a reduced import duty, are necessary. Also the Sustainable and Renewable Energy Development Authority (SREDA) should come forward to build charging stations.”
“We have plans to introduce electric buses in the Bus Rapid Transit (BRT) project. But it is not approved yet. The government should come forward in this regard.”
It should be noted that incentives such as the 10-year tax holiday for investing in energy-efficient vehicle assembly, scrapping subsidies, and charging station development are part of the plan to make Bangladesh a hub for energy-efficient vehicles.
Policy support
Automobile Industry Development Policy, 2021 has been formulated to ensure mass adoption of electric cars in Bangladesh by the year 2030.
Electric Vehicle Charging Guideline 2022 has been published.
Last year, two charging stations were inaugurated, one in Dhaka's Tejgaon and another in Jashore. Audi established Bangladesh’s first EV charging station in Dhaka’s Tejgaon area, where any type of EV can be charged.
Electric Motor Vehicle Registration and Operation Guideline 2023 also published April last year which allows registration of all motorised vehicles, including car, bus, truck and motorcycle, to be run by electric motors legally in the country.
But according to the gazette, rickshaws, rickshaw-vans and bicycles, which are run by electric battery, will not be considered EVs.
Besides, Bangladesh Auto Industries Limited (BAIL) is setting up the country's first ever electric car plant in the Mirsarai Economic Zone. They plan to manufacture all sorts of vehicles starting from two/three wheelers, sedan, hatchback and subsequently SUVs and pickup trucks.
What do we need?
The necessity of increased EV penetration urgently needs infrastructural development, particularly the establishment of charging stations, the removal of duties on EVs to stimulate consumer interest, and the allocation of a portion of carbon tax revenue towards infrastructure enhancements for EVs.
Shafiqul Alam, lead energy analyst at the Institute for Energy Economics and Financial Analysis (IEEFA), said, “To achieve the goal of 30 per cent adoption by 2030, more EVs penetration is necessary. We have to do a lot as Bangladesh is not yet compatible with EV.
“First of all we need infrastructural development more precisely charging stations. This is the real place to work. Also, the government could establish solar panels to charge the vehicles, as it could work like a double dividend.”
He added, “The government can remove this duty in the case of EVs so that people are more interested in buying EVs. At the same time, infrastructural development can be done with a partial share of the revenue from carbon tax.”
Bangladesh Reconditioned Vehicles Importers and Dealers Association (BARVIDA) President Md Habib Ullah Dawn said, “EV is the future. The world will slowly move in this direction by 2030-35, especially plug-in hybrids and EVs.
“Although it started much later in Bangladesh, we welcome this initiative.”
Pointing out that infrastructure development, especially charging stations, is the most important to facilitate EVs, he said, “The government is mapping all over the country to build charging stations. But before doing so, there was no consultation with the stakeholders.”
“China, America, and the EU are enthusiastic about this industry. They are developing new technologies through research. More than 200 companies have been created in China alone in the last five years. Their government is providing various incentives which are gradually leading China in this sector.”
Echoing Shafiqul, Dawn added, “We urge to nullify 20 per cent supplementary duty on EV imports, because apart from this, the government is getting 59 per cent duty altogether.”
