Globally, the use of electric vehicles is constantly increasing. In 2022, more than 10 million electric vehicles were sold worldwide, accounting for 14 percent of total vehicle sales that year. As of 2022, there are more than 26 million electric vehicles on roads globally. Governments and corporations in different countries around the world are taking various initiatives to ensure global net-zero carbon emissions by 2050. In view of this, global auto manufacturers are also focusing more on full electric vehicle production. In Bangladesh, the trend of customers buying hybrid and plug-in hybrid cars has been increasing over the past few years. Additionally, several electric vehicles are already seen in the country. Recently, the German brand Audi officially launched its EV model in Bangladesh. Today, we will discuss whether the automobile market in Bangladesh is ready to adopt electric vehicles.
From 2011 to 2021, the number of passenger cars in Bangladesh grew at an average annual rate of over 7 percent (7.23%). According to data from the Bangladesh Road Transport Authority (BRTA), there are more than 400,000 (401,552) passenger cars registered in the country as of March 2023, with nearly half registered in the last decade. One key reason behind the automobile industry’s growth in Bangladesh is increased purchasing power among customers. For a long time, Bangladeshi customers preferred to buy reconditioned Japanese domestic market (JDM) cars. According to the Bangladesh Reconditioned Vehicles Importers and Dealers Association (BARVIDA), over 14,000 JDM cars were imported into Bangladesh in the 2021-22 fiscal year.
|Fiscal Year||Number of Imported Cars|
However, there has been a major shift in this trend over the last few years. According to Bangladesh Customs data, in 2016, reconditioned cars accounted for 92 percent of total car imports, while brand new cars were only 7 percent. By 2020, imports of reconditioned cars dropped to just 18 percent. The remaining 82 percent were brand new vehicles, of which 16 percent were imported and 2 percent assembled locally. Automobile assembly in the country is also increasing due to the growing trend of customers buying brand new cars. This makes it clear that sales of brand new cars in Bangladesh are constantly rising. In addition, customers are purchasing hybrid and plug-in hybrid vehicles. According to the National Board of Revenue, around 3,300 hybrid cars were imported into Bangladesh in fiscal year 2018, increasing over 150 percent to about 8,400 units in fiscal year 2020-21. The most popular hybrid models in Bangladesh include Toyota Aqua, Prius, CHR, Axio, Noah, Harrier, Honda Vezel, Grace, and Nissan X-Trail. Customers buy hybrids mainly for better performance, fuel efficiency and relatively low VAT despite lower cc engines. After EV registration started in Bangladesh in September 2022, 20 EVs have been registered with the Bangladesh Road Transport Authority (BRTA) so far.
Future of EV in Bangladesh
The Bangladesh government has set a target of reducing 3.4 million tons of carbon emissions in the transportation sector by 2030. This requires at least 30 percent adoption of electric vehicles in the country. However, the government has yet to fully develop the infrastructure for EVs. The Bangladesh Road Transport Authority (BRTA) has finalized the Electric Motor Vehicle Registration and Operation Guidelines 2023 and the tax rate for electric vehicles. Under these guidelines, all types of electric vehicles will be registered under the E or EV categories. Like combustion engine cars, electric cars will require registration, fitness certificate, tax token, and route permit to operate on roads. However, the registration fee will depend on the motor capacity (kW) of the vehicle. As per Bangladesh’s policy for annual electric vehicle taxes, the tax has been fixed at 1 kW per 20 cc.
|Engine or Motor Capacity (1 kw = 20cc)||Tax (BDT)|
|Up to 1500 or 75kw||25,000|
|1500 – 2000 or 75-100kw||50,000|
|2000 – 2500 or 100-125kw||75,000|
|2500 – 3000 or 125-150kw||1,25,000|
|3000 – 3500 or 150-175kw||1,50,000|
|Above 3500 or 175kw||2,00,000|
However, the duty structure for electric vehicle imports is yet to be finalized in Bangladesh. Currently, the total tariff and tax incidence on EV imports ranges from 85 to 96 percent. For example, the base model of the Audi e-Tron EV is priced at $70,000 to $72,000. In Bangladesh, the starting price for this car is Tk 1.59 crore. Calculating the dollar exchange rate and various taxes like customs duty, regulatory duty, VAT, advance income tax, the total tax incidence on this car is around 95 percent.
In January 2023, Audi set up Bangladesh’s first EV charging station in Dhaka’s Tejgaon area. All types of electric vehicles can charge here. Apart from this, there are no other EV charging stations available yet in Bangladesh. The government has already finalized a policy for setting up charging stations, including initiatives for new charging stations and battery recycling facilities. Apart from government bodies, private organizations can also set up charging stations as per the policy. However, authorized EV dealers and importers provide support for home charging unit installation. Generally, full electric cars can travel 300km on a single full charge. Dhaka, the world’s sixth largest city spanning 306 square kilometers, is 20-50 kilometers from Savar, Gazipur, Narayanganj, and Munshiganj. Given Dhaka’s traffic, regular commutes within these districts would allow most fully charged EVs to run for 3-4 days without recharging. This means Dhaka is already prepared for customers to use EVs regularly.
Additionally, EVs can travel to faraway divisions or districts outside Dhaka with one charge. The distances from Dhaka to major cities in the divisions of Sylhet, Chittagong, Barisal, Rajshahi, Khulna, and Mymensingh range from 100-250 km – within the single charge range of most EVs. Nearly every EV maker provides a portable charger with the vehicle that customers can carry. This allows charging from a regular wall socket, available at homes, hotels, and more. Portable chargers can do both level one and level two charging. Although level one is quite slow, level two can fully charge an EV in 8-10 hours. In other words, you can recharge via the portable charger when traveling outside Dhaka and return. In 2022, Bangladesh achieved 100% electricity coverage. The country has a power generation capacity of 25,000 MW, producing 12,000-14,000 MW daily as per demand. Electricity currently reaches every rural area and char region in Bangladesh. Therefore, it is possible to charge a car with a portable charger almost anywhere in the country.
Customers in Bangladesh are already accustomed to driving hybrid and plug-in hybrid vehicles, which switch between electric and fossil fuel modes. Although plug-in hybrids are not as common, their numbers are significant. Since most customers already use hybrids, transitioning to fully electric cars should not take long. The most convenient aspect of a fully electric vehicle is lower maintenance costs. Typically, fuel-dependent cars deliver 7-8 km per liter of octane. For a Dhaka family driving 50 km daily, their monthly average would be around 1500 km. They would spend 25,000-30,000 taka on fuel monthly. Fuel-driven cars also require engine oil changes every 4,000-5,000 km. Apart from oil, regular maintenance and servicing involves replacing various components including brake pads. So for fuel-based vehicles, costs including fuel total 35,000-40,000 taka monthly. Meanwhile, an electric car needs 5-7 charges to travel 1500 km. EV battery capacity is usually 70-100 kWh; the Audi e-Tron’s is 71 kWh. As per Dhaka Power Distribution Company‘s current rates, its monthly charging cost would be 3,000-5,000 taka – much lower than fuel costs. Moreover, EVs do not need regular oil changes or maintenance like fuel-based cars. Brake pads and other components also require less replacement than internal combustion engine vehicles.
|No||Customer Class & Slab||Energy Rate / Charge||Demand Rate / Charge|
|Life Line: 00 to 50 Unit||4.35||35.00|
|First Step: 00 to 75 Unit||4.85|
|Second Step: 76 to 200 Unit||6.63|
|Third Step: 201 to 300 Unit||6.95|
|Fourth Step: 301 to 400 Unit||7.34|
|Fifth Step: 401 to 600 Unit||11.51|
|Sixth Step: Above 601 Unit||13.26|
According to an IDLC report, the Bangladesh government is taking various steps to ensure widespread adoption of electric vehicles by 2030. The 2021 Automobile Industry Development Policy emphasizes increasing domestic EV production to reduce vehicle emissions. The government offers incentives to make Bangladesh an energy efficient vehicle hub by 2030 through strategic investment, advanced technology introduction, and accessing regional and global markets. It has announced a 10-year tax holiday for investing in energy efficient vehicle assembly or manufacturing inside or outside economic zones. Other incentives include scrapping subsidies, interest waivers, temporary road tax waivers, minimum registration fees, charging station development, and battery recycling facilities. The ‘National Energy Efficient Vehicle Production Fund’ supports this industry. EVs have circulated in Bangladesh for years through auto-rickshaws and easy bikes. Despite lacking proper charging infrastructure, they have reached cities, rural areas, and remote locations countrywide. With 100% electricity coverage, many charge EVs at home or in garages. People may take time adjusting to hybrid and plug-in hybrid cars, but not full electric ones. Developing EV infrastructure will increase adoption. However, installing proper city charging stations is challenging. Each EV takes 20-30 minutes to fully charge, requiring significant space. In crowded cities like Dhaka and Chittagong, finding room for stations will be difficult. Home, office, mall and restaurant charging could reduce the need for urban stations. Highway stations would be profitable given the 100% electricity coverage. Bangladesh is relatively small, so inter-city distances are short compared to vast countries like the US, Australia and Canada which require huge charging investments. The US has over 130,000 stations, with 14,000+ in California alone. Considering Bangladesh’s size, existing electrification, and early EV adoption, the country already seems largely prepared for mass EV uptake.