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EV Market Profile: Bangladesh

by Stephen Fogel

The electric vehicle (EV) market in Bangladesh is in its very earliest stages. Bangladesh faces many of the same challenges as other developing countries.

Very Low Income Levels Are An Issue

Per capita GDP in Bangladesh for 2016 was only USD $1,359. This is not sufficient to support individually owned four-wheeled vehicles, whether they are new or used.

The principal form of wheeled transportation in Bangladesh is of the two-wheeled and three-wheeled variety. These motorcycles and tricycles are also responsible for a large proportion of the air pollution in Bangladesh, particularly in the congested urban areas. These vehicles use gasoline or compressed natural gas as fuel.

The capital city of Dhaka is one of the most populous cities in the world. Bangladesh ranks fourth on the World Health Organization’s list of countries with the worst air pollution. This situation contributes to 15,000 deaths per year, plus millions of people suffering from respiratory ailments.

Motorcycles And Tricycles Lead The Way

Two-wheeled and three-wheeled vehicles have been the first to be electrified. Several Chinese two- and three-wheeled EVs have been sold in Bangladesh, but these have a reputation for poor quality and reliability. A Japanese brand, Terra Motors, was introduced in Bangladesh in 2011, and is now the top-selling electric two-wheeler and three-wheeler EV brand.

The Terra Motors Corporation is backed by the former Presidents of Sony, Google Japan, and Apple Japan. The Terra vehicles sold in Bangladesh are of much higher quality than their Chinese competitors, and are therefore more reliable to own and operate. The Terra tricycles can carry three to four people, and are suitable for use as taxis or personal vehicles. By using less expensive lead batteries, as opposed to the lithium-ion type, Terra has been able to make its EVs more affordable.

Four-Wheeled EVs Are Not A Factor

Aside from the fact that two Tesla Model S vehicles are known to be in Bangladesh, four-wheeled EVs have not yet made much of an impact. They simply cost too much, so only the very wealthy can afford them. Import taxes and duties are also very high on EVs brought in from outside the country. The total number of passenger cars in the country was only 380,000 as of 2015.

Government Tax Policies May Help

The country’s National Board of Revenue is considering a proposal from the Bangladesh Reconditioned Vehicles Importers and Dealers Association. This would reduce the import duties on used EVs and hybrids, and would make them more affordable.

Issues With Bangladesh’s Power Grid

The electricity generation situation in Bangladesh is far from ideal. Power outages still occur, and the entire country does not yet have access to the grid. The primary power source for Bangladesh’s electricity is natural gas. The government plans to reduce its dependence on gas by switching to coal, which will make Bangladesh’s electricity even dirtier than it is now. EVs powered by coal are not an environmentally ideal solution.

Renewables currently make up three percent of Bangladesh’s electricity output, with a goal of ten percent by 2021. Purchases of solar-generated power from India are planned. An agreement with Nepal will see Bangladesh investing in new Nepalese hydropower plants, and getting clean energy in return. But renewables will remain a small proportion of the total electricity output for some time to come.

There’s No Charging Infrastructure

A growing population of two-, three-, and four-wheeled EVs will place a heavy burden on Bangladesh’s still-developing power grid. As of now, there is little to no public charging infrastructure in the country. Solutions to this problem may depend on power sources that do not rely on the overtaxed national grid. Some concepts proposed include solar-powered charging stations, as well as biogas generators combined with solar cells and storage batteries to provide power for charging. This is definitely a work in progress.

For Bangladesh, The Full Benefits Of EVs Are Many Years Away

Bangladesh, just like many other developing countries, is trying to balance the benefits of rapid economic growth with a desire to simultaneously improve their people’s quality of life. A future of affordable EVs of all types, powered by clean, renewable power sources, is a very worthy goal. It will require more renewables in the electricity mix, more favorable government policies, more affordable EVs, and a nationwide charging infrastructure.

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