The total investment of $1 billion will be made throughout the first five years.
Bangladesh Auto Industries Limited (BAIL), a local automobile company, was set to complete its facilities, civil work, and other utilities of the proposed electric car plant by December last year, which has stalled due to the pandemic.
The plant was supposed to be set up on a 100-acre land at Mirsarai economic zone, right on the outskirts of the port city. The initial investment would be around $200 million.
According to Masud Kabir, managing director of BAIL, the manufacturing units were supposed to be installed by March this year and the manufacturing was scheduled to begin in June. The company will be producing electric vehicles (EV) which uses chemical energy stored in rechargeable lithium-ion battery packs -- the process which is much more efficient and environmentally friendly compared to using fossil fuels.
Kabir also added that 80% of the investment will be sourced locally, while the rest will be sourced from outside the borders as foreign direct investment. The total investment of $1 billion will be made throughout the first five years.
The plans of setting up production have been pushed further by at least a year due to the worldwide pandemic that has disrupted global trade in an unprecedented manner. According to Kabir, the suppliers could not ship the required equipment on time, even though they have opened letters of credit previously.
Similarly, Nitol Motor’s project has also been stalled due to the disruption of trade; even though they have finished the construction of their assembly plant building on 10 acres of land, they are unable to start the operations as they are unable to import the machinery required to manufacture and assemble vehicles.
BAIL plans to manufacture all sorts of vehicles starting from two-wheelers, three-wheelers, sedan, hatchback, and sport utility vehicles (SUV), and also gradually start manufacturing pickup trucks, mini trucks, and multipurpose vehicles. There are estimated prices as well -- an SUV will sell at Tk25 lakh, sedan at Tk12-15 lakh and the motorcycles will be priced somewhere between Tk50,000 to 1.5 lakh.
Using electric vehicles will cut fuel cost by 90% and per kilometre energy cost will come down to less than Tk2. This is a huge positive change for the transport sector of the country.
At the same time, it is considerably better for the environment. Kabir said the plant will manufacture about 60% of the components, including the lithium battery, motor, controller, software platform, chassis, and body. Due to lower operational costs, the demand for hybrid cars has gone up in the last few years, which is quite evident on the streets of Dhaka nowadays.
Up until the pandemic, the sales of hybrid cars had a sharp rise of 900% compared to the previous year. Currently, the local market is dominated by Toyota. One of the models (Aqua), which is the highest sold hybrid car, can run 33-38 kilometres per litre of fuel. To put things in comparison, a regular 1500 cc gasoline-run car gives a mileage of 7-8 kilometres per litre whereas a hybrid car with a similar specification can give double that.
Currently, China is leading international electric car use, followed by Europe and the United States. There is a gradual worldwide increase in demand for electric vehicles, meaning the project as a certain future to not only be limited to meeting national demands but also export these vehicles to other countries. It is estimated by many experts that in the next 25 years, all fossil fuel cars would be replaced by EVs or other alternatives.