Bangladesh Prepares for Electric Vehicles
As China, Western Europe, and the USA charge ahead to become majority passenger electric fleets, we have to remember that this will not be good enough unless the rest of the world joins us. Some of the poorest countries in the world are the ones to bear the brunt of climate change fueled disasters — like the cyclone that hit Bangladesh just this week past.
Bangladesh is one of the most densely populated countries in the world — 169 million people living in 58,000 square miles. It also features alarmingly on the maps that show land loss as oceans rise due to climate change. Bangladesh is vulnerable to both disasters and climate change and ranked 7th in the world in extreme disaster risk, per the Global Climate Risk Index 2021.
The Bangladesh government is committed to reducing carbon emissions by 21.85% by 2030. Although the country contributes only 0.21% of global carbon dioxide emissions, it is growing at an alarming average annual rate of 7.52%. It is hoped that by encouraging the uptake of electric vehicles — two-, three- and four-wheelers — Bangladesh can achieve its goal.
“The all-electric vehicle market is almost non-existent in Bangladesh. However, the country is experiencing consistent growth in the imports of hybrid electric vehicles. A growth of 154% in hybrid car imports from 3,296 units in FY18 to 8,366 units in FY21 has been observed,” IDLC writes. Toyota is finding a ready market for its “self-charging” hybrids. The controversial electric “easy bike” is electrifying the three-wheeler market, with over 4 million on the road. They are not allowed on the streets of the capital because they are deemed unsafe, they use lead acid batteries, and the riders are suspected of charging illegally. They have, however, already become the primary vehicles for public passenger transportation in rural areas.
Local manufacturers are starting to meet the EV challenge. Walton Group has introduced an electric bus for use by its workers and is producing electric motorcycles. “Chinese electric scooters have been available in Bangladesh, through the grey market, for more than a decade now. However, any vehicle without an engine cannot be registered in the country, and this leaves owners of e-bikes in a predicament. Anyone can import these bikes, but no one can use them on the road legally,” The Business Standard writes. This highlights the regulatory hurdles to the adoption of battery-powered vehicles. The Takyon 1.00 is powered by an eight-cell lithium-ion battery pack.
Palki Motors Limited is a homegrown startup that is offering four-door, four-wheel, battery-swappable electric vehicles. They will provide 25 battery swap stations in Dhaka city with an estimated swap time of 2 minutes.
Although the Bangladeshi government has put targets and policies in place, there is much to be done for it to fulfill its vision of 30% EV penetration by 2030.* Guidelines for EV registration and charging have been formulated as well as the Automobile Industry Development Policy 2021. All well and good, but we need wheels on the road. Bangladesh, like India, is caught in the bind of wanting to make rapid progress in the penetration of EVs, but yet needing to protect its domestic industries. Too much tariff protection stifles competition.
Stakeholders believe that the rollout of electric cars would require further policy support. “While the number of electric three-wheelers has increased drastically in recent years, electric cars are yet to gain a significant foothold in the country. Consumers’ purchasing capacity and motivation remain difficult hurdles to the uptake of electric cars.”
Air pollution, causing premature death and reduced health, is a major economic burden on Bangladesh. “Ambient air pollution puts everyone at risk, from a child to an elderly. In 2019, air pollution was the second largest cause of deaths and disability in Bangladesh and costed about 3.9 to 4.4 percent of the country’s GDP,” said Dandan Chen, Acting World Bank Country Director for Bangladesh and Bhutan.
Transport and construction are listed as the major contributing factors. The government’s support for the electrification of two- and three-wheelers should help. Four-wheelers face a high customs barrier. “Customs duty and supplementary duty of 72% and 20%, respectively, make the import of electric cars quite expensive in the absence of available local substitutes.” Apparently, the government is considering lowering import duties for a limited time. Import duties vary for cars imported in parts and assembled in the country. In a June 1 budget speech, A H M Mustafa Kamal, FCA, MP Minister of Finance, proposed an environmental surcharge on second-car ownership. Perhaps this should be waived for electric cars.
Bangladesh has significant unused capacity in its current power system. This is being caused by a shortage of coal and gas. The Ukraine war has led to a volatile energy market and left countries like Bangladesh — with its dependence on gas-fired power stations out in the heat. There have also been maintenance issues. This will need to be resolved if the country is going to move towards an electrified vehicle fleet.
“For instance, on May 8, 7,139MW of electricity generation capacity was not used thanks to the fuel crisis and maintenance-related down time, shows data from the Power Grid Company of Bangladesh. About 3,653MW capacity was not utilised for fuel crisis and another 3,486MW for maintenance-related issues … Bangladesh imports 1,160MW of electricity from India, which supplied around 1,011MW of electricity on average.”
In concert with policy support for electric vehicle ownership, the government needs to make significant moves towards energy independence by investing in wind and solar. Perhaps then they will be in a position to set up charging stations across the country to enable long-distance travel. These may not be commercially viable for the near term and will also need government support.
The Bangladesh power sector is subsidized by the government as it is running at a loss. The hope would be that greater use of EVs would give the sector another income stream, plus reduce the country’s dependence on imported petrol and diesel.
Examining the range of issues facing Bangladesh — reliance on gas and coal for power, poor maintenance of power stations, tariff and regulatory barriers to electric vehicle take-up and ongoing climate emergencies — it appears that the people of this low-lying country have an uphill battle. However, like Africa, there are the green shoots of local entrepreneurs and the support of international investors to accelerate the move to a green future.
*Achieving this aim will reduce emissions from road transport by 3.39 million tonnes of carbon dioxide (CO2) if achieved.
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