Bangladesh is gearing up to tap into the highly potential electric vehicles (EV) market to generate employment and cut carbon emission.
The Bangladesh Economic Zones Authority (BEZA) has set up an electric vehicle manufacturing plant on 100 acres of land at Bangabandhu Sheikh Mujib Shilpa Nagar (BSMSN) in Chattogram region.
Most of the factories will start operation from next year and BEZA eyes an annual production of 32,000 units of four-wheeler EVs. The local companies will manufacture EVs in joint venture with foreign companies from Japan, China, India and Germany.
BUET’s civil engineering department Professor Dr Md Hadiuzzaman said proper strategy and research are needed before the introduction of EVs in the market.
The Accident Research Institute director noted that the government has to ensure charging stations for EVs and proper management of batteries that will be used in those vehicles.
Dr Ahsan H Mansur, the Executive Director of Policy Research Institute of Bangladesh, said that most of the countries are phasing out combustion engine-based vehicles.
“The government has to take a clear initiative to address the environmental issue. The (automobile) policy has to have a detailed guideline,” he said, pointing out that charging stations for EVs have to be installed before the vehicles are launched.
But the companies and government officials contacted by The Business Post failed to clearly state who would be responsible for installing the charging stations, the absence of which, experts said, would directly affect the sales and popularity of the locally-produced EVs.
Although some electric two and three wheelers are available in the local market, there is no four-wheeler EV.
Former Bangladesh Bank governor Dr Atiur Rahman described the initiative to make EVs a smart move. “Bangladesh will enter a new era with this,” he said.
He noted that the move would generate employment and have a positive impact on the economy.
‘Electric vehicle production within 2022’
BEZA Executive Chairman Paban Chowdhury said some companies, including Uttara Motors, Runner and Bangladesh Auto Industries Ltd (BAIL), are investing in BSMSN to manufacture EVs.
“We have finished the plant’s construction, built roads and ensured electricity and water supply … Some of the factories will start production next year,” he said.
Paban said that automobile industry-friendly policies were included in the budget for 2021-22 fiscal year which will be helpful for the development of the EV segment.
BEZA social specialist (consultant) Md Abdul Quader Khan said BSMSN will be the automobile industry hub of Bangladesh. The development work of the 30,000-acre Shilpa Nagar is proceeding fast.
“Our land allotment has been completed. We confirmed $22 billion in investment. Hundreds of thousands of Bangladeshis will get jobs here in the future,” he said.
Quader said ACI, BAIL, Star Alliance, Uttara Motors and IFAD Autos Ltd will invest in the EV manufacturing plant. Discussion with Walton is in the final stage. The plant will employ some 10,000 people.
“Uttara Motors will invest $33 million (for producing EVs and spare parts). Star Alliance will invest $88.23 million, Mango Teleservices Ltd $100 million and IFAD $51 million,” Quader told The Business Post.
Runner Automobiles Limited’s Chief Financial Officer Shanat Datta said they would invest in EVs at BSMSN.
“We will assemble EVs in joint venture with Volvo car of India. We are currently studying the market and waiting for land allotment at BSMSN,” he told The Business Post.
But he declined to comment on the possible investment amount and the partnership model.
Untapped EV market
According to Bangladesh Road Transport Authority (BRTA), there were 47,29,393 registered motor vehicles in Bangladesh until May this year. They include 3,25,8697 motorcycles; 67,518 jeeps; 4,8637 buses; 1,04,961 microbuses; 3,01,079 autorickshaws; 3,72,137 private passenger cars; and 7,076 ambulances.
Last year, 12,403 private passenger cars were registered.
BAIL Chairman Mannan Khan said they plan to start production of EVs, batteries and chargers within the next eight months. The company is investing $200 million in two phases.
“We will produce global standard lithium-ion batteries that can be used for 7-8 years in the EVs and another 4-5 years at solar power plants or for backup. They will be recycled after that,” he said.
But he did not say anything on how long it would take to fully charge the batteries. Mannan said that EVs produced by them can be charged at homes and refuelling stations. Around 10 to 15 cars can be recharged at a time at a commercial refuelling station, he noted.
“The cost per kilometre will be Tk 1-1.5 for our EVs but going the same distance will cost a traditional car Tk 12-13,” he said.
He said that the low operation cost and environment-friendliness of the cars will attract customers despite the possible high prices.
Mannan claimed that they “plan to produce 30,000 cars in the first year” and “double the number after one year”. “We will think about export after meeting domestic demand,” he said.
The EVs will cost between Tk 8 lakh and Tk 13 lakh. A top end vehicle will have a range of up to 350 kilometres, he claimed.
Tesla’s Model 3 sells for about $39,000 in China at a lower price due to its local production. The popular Hong Guang Mini EV, manufactured in China by the state-owned SAIC Motor, costs $4,500. But the Mini EV lags behind Tesla in terms of battery, range and performance. Its convenience and low price helped it become one of China’s bestselling “new-energy” vehicles.
Electric bikes and scooters
Local companies, including Green Tiger and Akij Motors, are producing electric bikes and scooters for several years now.
Deputy Manager of Akij Motors Anwar Hossain said they brought electric bikes to the market in 2016. “We will bring environment-friendly EVs within the next six months. We will import bodies from China and assemble them here,” he said.
He sought policy support from the government.
“The main problem is that there’s no registration system for electric motorcycles. This should be resolved first,” he added.
Walton, another local brand, is going to introduce electric bikes soon.
Kaikobad Siddiquie, product manager of TAKYON Electric Bike, said the company will primarily launch two models of e-bikes -TAKYON 1.00 and TAKYON 1.20.
Their performance will be equivalent to a conventional 100cc bike, he claimed.
Miles to go
Finance Minister AHM Mustafa Kamal proposed VAT exemption on manufacture on motor cars and vehicles for five more years in the proposed budget for 2021-22 fiscal year.
On June 14, the cabinet approved the draft of the Automobile Industry Development Policy 2021 to help the industry grow.
Cabinet Secretary Khandker Anwarul Islam told the media that the government is working for the development of the local automobile industry so that Bangladesh won’t need to depend only on imports.
An estimated 10,000-12,000 units of private cars and jeeps are imported annually, said Abdul Haque, the president of Bangladesh Reconditioned Vehicles Importers and Dealers Association (BARVIDA). “Reconditioned vehicles meet 80 per cent of the local demand,” he told The Business Post.
Secretary Islam said that the key objective of the automobile policy is to develop the local industry. Another goal is to increase the scope for cooperation and joint-investment between local automobile industries and international brands so that the products of famous brands can be produced locally.
When asked about the registration of EVs, BRTA Deputy Director Md Shadequl Islam said, “Some of the issues regarding the EVs have been addressed and we’re working on others.”
