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Understanding state electrical vehicle diffusion in Bangladesh

  • Published at 07:11 pm December 11th, 2019
Electrical vehicle diffusion
Syed Zakir Hossain

The Battery Electrical Vehicles (BEVs) as a transport energy technology solution is proving practically to be a better alternative technological response in dealing with Green-House Gas (GHG) emission reduction.

With more than five million Battery Electrical Vehicles (BEVs) now on the roads worldwide, two million have been sold in 2018 alone. Compared to just a few thousand in 2010, technology advancement has proved that economic growth can be enhanced, making its progress unavoidable. What’s more, this unstoppable advancement is helping fix transport problems, bringing new possibilities and choices.

By definition, EV’s refer to an electrically-driven vehicle which uses one or more electric motors for its propulsion.  Since the country’s independence, the Bangladesh Government has given paramount importance to road transportation and therefore has become more popular over the years. In addition, there has been a remarkable increase in the access to electricity in the country, from 48% to 72%, producing per capita power generation from 220-Kwhr to 371bkwh (7Fife Year Plan, 2015).  Such a scenario reflects an increase in its production and distribution. The Bangladesh Government has allowed the free contribution of multiple non-state actors to contribute to the development of the country. 

Research has also shown that most governments world-wide have always supported diffusion of technologies, for example, agricultural technologies and manufacturing. For example, the United States of America’s production has created manufacturing small and medium scale enterprises with financiers of production centers supporting diffusion.  Other ways of supporting diffusion include linking suppliers and users, promoting BEVs by introducing low car application fees and quick approval processes, notes Organization for Economic Co-operation and Development (OECD).However, specifically on BEVs, despite its roles in enhancing urban economic growth and creation of opportunities, congestion, safety and environmental aspects are now of concern for urban transport. 

Bangladesh is one of the most densely populated countries in South Asia. With a population of about 164 million people, the country is regarded as the most vulnerable country in the world and occupies 147, 570 square kilometres. The further growth of the population including floating population as well as urban sprawl has resulted in the increase of commercial activities including secondary and tertiary industries.  This has resulted in the acceleration of the rate of demand for transport. However, the increasing growth rates of buses on the streets have remained stagnant.  As such para-transport penetrated fast in the public transport system. The transport system of Bangladesh consists of roads, railways, inland water, three seaports, maritime shipping and civil aviation.  

Research has proven that the transport sector produces the largest source of carbon dioxide emissions, and contributes to 27% of energy consumption, compared to 40% from power generation, industry 16%, buildings 12% and agriculture and non-energy use, eight percent. Globally, road transport is currently dominated and overwhelmed by Internal Combustion Engine (ICE). However, due to pollutants and traffic jams, the promotion of sustainable fuels has become equally important. 

The BEV as a transport energy technology solution is proving practically to be a better alternative technological response in dealing with Green-House Gas (GHG) emission reduction. BEVs are in many ways, addressing localized pollution and national energy security and energy efficiency.  In addition, BEVs have a zero tail-pipe emissions and thus emit less carbon dioxide compared to those powered by ICEs. This happens especially if the source of power is from renewable energy sources. BEVs, are slowly taking the world by storm, have an advantage in terms of energy efficiency, energy security, reduced user-cost per kilometre, noise and local air pollution.  

Why and how  BEVs diffused in Bangladesh?

Underlying this critical question is the need to understand why technology diffuses in the first place. This article will try to give some background, of why that happens and in the next part explain how it happens.  Interestingly, diverse forms of technology have been growing and diffusing and there are reasons why they do so.

Diffusion is defined by scholars, as the process by which a new idea is taken up and becomes acceptable by a group of people or community. Along this school of thought, attitude, too, is as a result of whether the technology is difficult to operate or linked with existing technology. To many people, technology diffuses if it has the potential to contribute to economic growth. Therefore, if people have the right attitude, a technology can diffuse.

Technology diffusion has two characteristics, namely, slowness and rate of acceptance. Some technologies diffuse fast and rapid, while some may be slow and take a considerable amount of time. 

For example, colour television in India took a long time to get diffused. However, for the satellite TV, the rate of diffusion was very fast, so too was the mobile phone. Further, the cordless telephone took a long time to get diffused into Indian homes, yet the cell phone got readily accepted by all and diffusion was thus, fast.

Scholars, also note that for technology to diffuse it must meet five characteristics, namely, relative advantage, compatibility, simplicity and ease of use, trial ability and observability.

The Bangladesh case

All these technological characteristics have fitted in well in Bangladesh due to the limited size of the country where its transport system has a prodigious reliance on road transportation than inland water and rail.

Now, in Bangladesh, the BEV is commonly known as Easy Bike.  It has five batteries and carries six to eight passengers.  It is powered by rechargeable lead-acid batteries as a source of power.  Currently the main source for charging the BEV is Electricity from main grid.

I have just concluded a unique research on BEVs in Bangladesh whose main objective was to understand how and why the Battery electricity Vehicle came into Bangladesh, its Environmental Implications and the role of Renewable energy and related policies in a changing climate. 

The study found out that the first BEV came from China between 2001/2002, introduced by a man named Firoj who imported one BEV and tried to re-sell it. The port of entry is Chittagong. On a related but on a different dimension, the Chinese also brought their electrical vehicles straight into the rural areas of Bangladesh to find buyers and dealers.  After a while, they followed up to check, through customer feedback if it was working well in the local conditions.  They went back and redesigned and adjusted according to the needs of rural people. 

Amid 2005 to 2006, with more imports trickling in, it gained popularity in the rural areas without the aid of radio, newspaper or television adverts.  The main reasons was due to its shared riding facility resulting in low fare charges (Tk5) for short distances of zero to five kilometres, as well as hop-in and hop-out facility.  Given this country-wide penetration, the BEVs are playing an indispensable role in Bangladesh.   It is also functioning as a last mile transport system, between the main road and their door steps.

Besides their ability to move in all type of roads, they are noise-less and smoke-less too.They have gained popularity in Bangladesh’s rural and urban communities. In urban areas, they are used as common transport mode of transportation to middle and lower income groups of Bangladesh, especially in the link roads and district dusty roads.  

In 2011, the BEV was banned from the main highways of Bangladesh’s main highways, due to their causing of serious accidents over a very short period of time. It also faces and attracts a steep tax barrier (89.7%), if imported as a Completely Built Unit (CBU) or fully-built vehicle.  This technology is the only technology that has attracted a six tier tax charge. The brand and origin of the BEV in Bangladesh is not considered in the blanket ban and financial barrier imposed by government.

However, if imported as Completely Knocked Down Unit, (CKDU) the tax charged is 37%.  This in itself is a direct benefit deliberately put by government for importers to enjoy.  It seems this facility by the National Revenue Authority has promoted the technology’s proliferation than its stoppage through ban and tariff barrier.  The numbers of BEVs have risen dramatically, from an estimated number of 397 000 in 2013 to about 1500 000 in 2019.   

Environmental and other policy concerns for the BEV in Bangladesh

EV batteries in the vehicle diffusion have gained attention in my study. Now, given the fact that each EV carries five batteries, this means, to date there are 7.5 million batteries out there that will have to be disposed or managed.  So far it is plausible that there are a few Group of companies like Raimafrooz, Confidence Batteries, PANNA and HAMKO that are manufacturing Batteries, with Raimafrooz and Confidence Batteries are making BEV batteries and having manufacturing recycling plants.  At least, Raimafrooz recycle up to 98% of its battery waste, which serves as a good example. Apparently there is no government Policy or regulations for recycling of batteries. This calls for the availability of proper and fully-fletched Battery Waste recycling plants in Bangladesh for the EV Industry coupled with relevant policies and regulations.   This is however, dependent on the regularization of BEV registration and availability of BEV Policy and Battery charging guidelines.    

The spread or diffusion of BEVs in Bangladesh, apart from providing carbon mitigation benefits, has already created employment opportunities for the rural and urban middle to low income people.  It has created an informal sector and facilitated entrepreneurship in the areas of Mechanics, Driving, Battery recycling, Battery Charging, Auto mechanics, Panel Beating and Spraying, Tyre technicians and finally some form of revenue collection for certain organized municipalities such as Singra and Khulna who have been locally registering them.  As a result, it has assisted in alleviating poverty.  

Researchers acknowledge the local commuters, local manufacturers, importers, middle to low-income people have all assisted in the creation of demand for BEVs, in the absence of policies in Bangladesh.