Industry insiders are of the view that petrol and diesel-run vehicles are highly anticipated to be gone from the world in two or three decades. This is mainly because the automobile industry in the next 10 years will be further into the world of electric vehicles (EVs) instead of fuel oil aimed at reducing carbon emissions. Consequently, the booming global car market will be dominated by eco-friendly EVs. That’s why, all big carmakers in the world seem busy designing and manufacturing new models of electric cars.
The biggest revolution in the global automobile industry is about to take place sooner rather than later since Henry Ford first began producing automobiles in 1913. Analysts are affirmative in the notion that this automobile revolution will take place faster than one can even imagine. Accordingly, petrol and diesel-powered motor vehicles will duly be replaced by environment-friendly electric vehicles.
BANGLADESH IN THE ERA OF EV
At present, the tide of electric car production is gaining momentum across the countries. The world’s largest carmakers, including Jaguar, have already announced plans to launch electric cars. And our Bangladesh isn’t far away from adopting electric vehicles either. In fact, the country is about to enter the world of EVs as the Bangladesh Auto Industries Limited (BAIL) has taken up the challenge of launching EVs here to help reduce carbon emissions.
Electric cars may be seen on the main thoroughfares of the country from next year as BAIL is already setting up the country’s first ever electric car plant in the Mir Sarai Economic Zone. The factory construction on an area of about 100 acres is almost done. Preparations are now underway for car production. The company plans to manufacture all sorts of EVs like two-wheelers, three-wheelers, sedan, hatchbacks and subsequently sport utility vehicles (SUVs), pickups, mini-trucks and multipurpose vehicles.
With the cost of the country’s first EV manufacturing plant estimated to be Tk 335 crore, five banks and non-bank financial institution in October last arranged a syndicated loan to the tune of Tk 167 crore for BAIL, while the remaining sum was projected to come from equity and foreign direct investment. Bangladesh Infrastructure Finance Fund Ltd was the loan’s lead arranger with other participants being Agrani Bank, Islami Bank Bangladesh, Bangladesh Development Bank and First Security Islami Bank. Sources said the BIFFL is contributing Tk 75 crore and the banks are lending the remaining Tk 92 crore.
BAIL’s target is to provide electric cars at reasonable prices to the middle and lower-middle income groups. In Bangladesh, the lower middle and middle class dream of buying vehicles but they cannot afford it as the prices are often excessive. Considering their buying capacity, BAIL plans to provide them with vehicles at affordable prices in semi-urban and rural areas. It’s been informed that the company has a strong R&D team with BAIL also taking professional and technical services from an experienced foreign company named Wuhan Yuanteng Automobile Technology Co Limited for this project. BAIL expects its annual car sales to reach 2,00,000 units by the year 2025 and 10,00,000 units within next 10 years.
AUTOMOBILE TAXATION
Bangladesh’s automobile market is generally controlled by the government with one significant context, which is taxation. The label prices of vehicles often means nothing much to the Bangladeshi consumers, as the particularly high import duty on automobiles in the country can be up to 827 per cent. The tax rate is related to the cylinder capacity (CC) of the vehicle.
Among different kinds of vehicles of similar cylinder capacity, gasoline-run Completely Built-Up (CBU) vehicles are taxed comparatively higher. Gasoline-run Completely Knocked Down (CKD) vehicles that are imported in parts and then assembled are taxed lower than the CBU gasoline vehicles. The tax incidences on hybrid and electric CBU vehicles are the lowest, which makes them an attractive option for the consumers by pulling the effective price down.
EV CHARGING STRUCTURE
Bangladesh’s under-developed infrastructure can be a key obstacle in the way of EV adoption in the country. As of 2021, Bangladesh has just 14 EV charging points with a total capacity of 278kw. Besides, these stations are not workable for high-load commercial use as they are functioned using solar energy, leading to a lengthier charging time. The following table shows a comparative picture of EV charging infrastructure among some selected countries:
Compared to other countries, the EV charging infrastructure is almost non-existent in Bangladesh. To ease the adoption of cost-efficient and environment-friendly EVs in this country, easily reachable and robust charging infrastructure is a must. However, it was revealed that BAIL’s battery capacity would be 50 kilowatt hour. Fully charging an EV would cost Tk 400-500 as per the existing electricity tariff.
With a 20 minute charge, these EVs are expected to run 400 kilometres. Notably, the cars can be charged at home with a regular connection or at a quick charging station. It was also informed that the per kilometre energy cost of the EVs would be less than Tk 2. It’s informed that the EVs of BAIL would reduce maintenance costs by 90 percent and carbon emission and toxic gasses by 100 percent, while ensuring better transport performance and road safety.
In an exclusive interview with Press Xpress, BAIL Co-founder and Managing Director Mir Masud Kabir talked about various insights including production deadline, cost, market scenario, price range and the future of electric vehicles in Bangladesh among other relevant issues. He also shared his company’s goals and plans to introduce a full-fledged EV product-line that will include production of Li-ion battery packs to power these vehicles.
Would you please tell us, what was your driving factor for setting up this electric car manufacturing plant in Bangladesh?
The initiating company Mango Teleservices Limited is a leading technology company. We disrupted and transformed the Internet sector of Bangladesh as the country’s first private sector International Internet gateway (IIG) operator. We successfully reduced the Internet price from 1,000$ to 3$ per Mbps in the last 13 years. We also played pioneering rolls in digital signature CA, Data centre & Cloud infrastructure etc. Disruptive technology companies like Tesla & BYD played transforming roll in EV industry globally and became market leaders. We are inspired by them too. We could successfully bring the most appropriate technology and global best practices and benefit the nation in all our activities. Bangladesh is the worst hit country for global warming & sea level rising; we will be under water if the trend continues. Dhaka has the worst air quality. ICE vehicle are the biggest polluters & carbon emitter, we will replace them with environment friendly EV.
Transport cost is high in Bangladesh due to imported fuel & vehicle. We can change this scenario with locally manufactured EV. The world needs to replace 1 billion conventional vehicles in next 30 years, where Bangladesh can become the global EV manufacturing hub. Our driving force is our desire to transform the sector, bring benefit to our nation and create societal happiness by setting up the state of art local EV manufacturing unit and EV eco-system in Bangladesh.
What will be the cost of this project? Is there any foreign entrepreneur or company involved? If then how are they having their partnership details?
The project cost will be about 5 billion $ over the next 5 years. In the first phase, we are starting with about 200 million $. Along with EV we are also manufacturing most of the crucial parts of EV like Lithium-ion-battery, Motor, Controller and Charger. We have started our EV project with local equity and local financing. We would probably take some foreign partners in future. For the motor controller and charger, we have a foreign partner who is bringing both know-how and investment. We have similar arrangement for our battery projects too. We have engaged global design houses for our EV & manufacturing plant design.
Are the people of Bangladesh really ready for the adoption of electric vehicles?
We certainly think Bangladeshi people are ready. There are 2 to 3 million unauthorized & unsafe EV easy bikes and auto rickshaws running in Bangladesh with environmentally unfriendly lead acid batteries. These need to be replaced immediately. Apart from this, we know that Bangladeshi peoples are early and fast adapters in the technology product, if they have financial benefits. In that context, EV will be 90% cheaper to run, so we think the people of Bangladesh are ready to adopt EV. People may be a little worried about battery charging facilities, registration, AIT and fitness fees. Other worrying part is the life time of EV as per the EV policy. But all these issues can be effectively addressed by Government of Bangladesh by setting up charging stations, waiving the fees & charges and changing the policy clauses. We think Bangladeshi people are ready to adapt EV as there is environmental benefit, cost saving and adequate steps by government to create an effective EV eco-system.
We know, tariff on electric usage set by Bangladesh Energy Regulatory Commission is a key determining factor of Electric Vehicle adoption in Bangladesh. What’s your take in this regard?
BERC, as I told before, has declared 20%-30% discounted off-peak and super off-peak hours of tariff for EV charging stations. They can brings this discount to 50% and provide the same facility for home users.
Is there any technology being used to reduce the cost of charging?
Cost of charging is not dependent on technology. Cost of charging depends on the electricity tariff & battery capacity (KWh). With technology the speed of charging can be reduced or increased. For a 4 wheel car, fast charging can be done in 15-20 minutes, 3 hours by 3-phase charging & 6 hours for 2-phase 220V charging. Bangladesh Energy Regulatory commission (BERC) has already introduced 20% to 30% discounted tariff for EV battery charging at off peak and super off peak hour. We think it can be reduced further to 50%, to encourage people.
Will you please give us an idea about, what will be the price range of your electric vehicles?
We will manufacture 3 to 4 models of 2 wheelers with the price range of 45 thousand to 1.5 Lac Taka. 2 models of 3 wheelers with 1.5 to 2.5 lac taka price range. Present easy bike 3 wheeler batteries needs to change every year with 50,000 Taka, where as our batteries will run for more than 3,000 charge cycles (10 years or more life cycle). We have several models of 4 wheelers. Our hatchback pricing will be between 8-12 lac taka, Sedan pricing will be 12-16 lac taka & SUV pricing will be around 25 lac Taka. MPV will be around 20 lac taka & mini truck 15 and 20 lac taka. The maintenance cost will reduce by 90% as there is no engine and very few moving parts. We believe fuel cost will come down from 10 taka to 1 taka per kilometre for a sedan; 90% reduction in fuel cost.
Can you please tell when will it be available for the customers?
We hope that our production will be started within 2022.
Compared to petrol and CNG-run vehicles, how will it cope up in ever-growing Bangladesh market?
CNG, petrol or diesel vehicles are called Internal Combustion Engine (ICE). The cost of running an EV is 90% less than that of ICE vehicles. With the introduction of right EV eco-system and some incentives by government will definitely make EV more popular than ICE vehicles.
In case of infrastructure, Bangladesh’s undeveloped infrastructure is a major hurdle in the way of EV adoption. As of December 2020, we know that the country had just 14 Electric Vehicle charging points with a total capacity of 278 kW. How do you intend to operate under such scenario? Is there any suggestions on your part?
If we look global scenario, we will see that 80-90% cases EVs are charged at homes where such facility in available in the parking area. Only the 20% top up are done outside, mostly in long routes or for commercial vehicles. Commercial vehicles are normally charged at fleet management depots. Present EV easy bikes run on Lead-acid battery and lead-acid batteries can’t be topped up. These stations mentioned above were established for them, but those batteries cannot avail this facility. But the battery we are going to use is Lithium-ion-battery and it can be topped up. These stations will be useful for our EVs in future. We think, most of the EVs will be charged at home and for 2 wheelers and 3 wheelers battery will be swapped. In the case of 4 wheelers, definitely Bangladesh Government can take initiative to establish adequate fast charging stations on highways & parking lots. Then the adoption will be easier. We want to take the initiative to create a mobile portable fast charging ecosystem. It will be on the move and there will be a corresponding mobile app. Any EV user can login and check the status of nearest charging stations, mobile charging stations and can use the Uber like service for charging anywhere in Bangladesh. If the user requests required service, then the mobile charger will come and top up the car.
Current government has taken initiative to run electric buses in future. Electric four wheelers are coming, what is the future of EVs in Bangladesh?
If we share it broadly there are three different segments of vehicles. One is large vehicles which are Bus and cargo trucks, then passenger vehicles which are SUV, Sedan, Hatchback, Microbuses, Mini trucks and finally the 2 wheelers and 3 wheelers. We welcome Bangladesh government’s initiative for buses as this segment contribute to more than 25% of pollution. Light vehicles are contributing about 45% to pollution; we are going to address that market. We seek Bangladesh government’s support in adoption of EVs. I think the future of EV in Bangladesh is very good because there is a feel good effect. We are benefiting the environment of the country &the world and it is economical. Its life cycle management or ecosystem is going to be very user friendly & cost effective. Government may take more positive steps to popularize EV by giving incentive to people and local EV manufacturers.
As we know, the tax incidence in Bangladesh is proportional to the CC of vehicles. Interestingly, the label prices of vehicles often do not mean much to the Bangladeshi consumers, as the extraordinarily high import duty on automobiles can be upto 827%. How this reality can impact the overall functioning of EVs here?
We will manufacture EV locally in Bangladesh. We will not be subjected to this import duty and supplementary duty that is imposed today on the imported cars. We will import some raw material for our manufacturing. We think this import duty is actually local manufacturing friendly. Import duty in Bangladesh is from 130% to above 600% based on the engine capacity. The bigger the engine, the more fossil fuel it burns and the more it harms the environment. So High import duty policy for environment polluting vehicles is essential for us as a nation considering the global warming & air pollution. We must go for a locally manufactured clean environment EV. If the Government gives more incentives on manufacturing sector & provide duty free import of EV raw material then the EV price will really reduce & become affordable to people. The world needs to replace 1 billion ICE vehicles in next 30 years. Bangladesh can become an EV manufacturing hub. We must encourage local EV manufacturing by keeping import duty high & providing incentives to EV manufacturers and users to avail the upcoming global manufacturing opportunity.
What role, do you think, will the electric vehicles play in addressing environment pollution?
Global warming is coming from carbon dioxide tailpipe emission of ICE vehicle mostly. And air pollution is coming from unburnt fossil fuel, nitrogen peroxide, nitrogen dioxide, carbon dioxide, sulphur dioxide and other poisonous chemical emission from the tailpipe of present ICE vehicles. This is the major contributor for global warming and also air pollution. EV on the other hand has no tailpipe. EV has no emission vehicle which will save environment and create societal happiness.
