The government has, for the first time, drafted the Electric Vehicle Industry Development Policy 2025, aiming to transform the country鈥檚 transport system, reduce carbon emissions, and establish a globally competitive electric vehicle industry.
Formulated by the industries ministry, the policy outlined a comprehensive roadmap extending through 2040.
Bangladesh has made significant progress in developing its electric vehicle (EV) industry, with major investments from local companies for both assembly and full-scale manufacturing.
Bangladesh Auto Industries Limited is setting up the country鈥檚 first comprehensive EV manufacturing plant in Mirsarai, Chattogram, while Palki Motors is focusing on commercial and delivery vehicles supported by local parts sourcing and battery-swapping networks.
Atlas Bangladesh Ltd has entered the market through local assembly of electric bikes in partnership with a Chinese firm, and Bangladesh Lithium Battery Limited is establishing a factory to produce lithium batteries for EVs and other applications, strengthening the country鈥檚 emerging EV ecosystem.
The policy sought to promote local manufacturing, expand charging infrastructure, and accelerate nationwide EV adoption as part of the country鈥檚 broader climate and industrial development agenda.
The framework supported Bangladesh鈥檚 national target of reducing transport-sector emissions by up to 6.33 million tonnes by 2030 with international cooperation, and that specific action plans had been set to identify and register all electric vehicles by June 2026 and 2030 respectively.
An EV is defined as a vehicle powered by one or more electric motors drawing traction power from an internal rechargeable battery. However, the policy clarified that battery-powered bicycles and rickshaws, commonly known as easy bikes, would not be classified as EVs.
The draft highlighted the policy鈥檚 central goal of boosting domestic production of import-substituting components while enhancing the export competitiveness of locally made parts and vehicles.
The industries ministry has already sought feedback from relevant stakeholders ahead of its full implementation.
According to the draft, Bangladesh鈥檚 shift towards electric mobility came amid mounting environmental challenges.
Citing various studies, it noted that one in every seven Bangladeshis could be displaced by 2050, with 11 per cent of land submerged and around 18 million people affected.
The draft mentioned that the transport sector was Bangladesh鈥檚 third-largest source of carbon emissions and the largest consumer of petroleum 鈥� accounting for 63 per cent of national fuel use and 81 per cent of transport-related emissions.
Against this backdrop, it said the government viewed the EV policy as both an environmental necessity and an industrial opportunity, intended to reduce dependence on fossil fuels, lower emissions, and create new avenues for manufacturing, exports, and employment.
It added that the policy envisioned developing a sustainable EV ecosystem to reduce fuel import costs and promote cleaner, more affordable mobility solutions.
The draft highlighted that a major strength of the framework lay in its fiscal incentives. It said that import duties on fully built electric cars, buses, trucks, and motorcycles would be capped between 31 and 37 per cent until 2030, while local assemblers importing completely knocked-down (CKD) kits would face a total tax burden of only 15.25 per cent until 2035.
It further said that manufacturers of EVs and components would enjoy full income tax exemptions until 2040, along with VAT waivers across all production stages.
Raw materials and parts imported for EV production would be subject to only one per cent customs duty to encourage local manufacturing.
Battery production, the draft added, had been identified as a key priority. Locally produced lithium-ion and lead-acid batteries would receive full VAT exemptions and tax benefits under the Made in Bangladesh initiative, while imported batteries would face a 26.2 per cent tax.
The policy also promoted domestic investment in LED and lithium-ion battery production to develop an integrated supply chain.
The draft noted that expansion of charging infrastructure was another core component. In line with the Electric Vehicle Charging Guideline 2022, private investors in charging networks would be offered ten-year income tax holidays.
It also stated that new building codes would require EV charging provisions and that existing fuel stations would be upgraded with charging facilities. Renewable energy, particularly solar power, would be encouraged for EV charging.
On the regulatory front, the draft said that EV standards would align with international norms under the Road Transport Act 2018 and the Road Transport Rules 2022.
All EVs would need globally recognised identification and engraved motor numbers. It added that registration and roadworthiness procedures would follow existing norms, though registration fees would be halved and advance income tax fully waived for new EVs and annual renewals until 2030.
The draft policy mentioned that at least 30 per cent of vehicles procured by government and semi-government agencies should be electric by 2030.
A vehicle scrappage programme would be introduced to replace ageing petrol and diesel units with EVs, supported by bank loans covering up to 60 per cent of purchase costs and repayment terms of up to eight years.
The draft also stated that export-oriented manufacturers would benefit from bonded warehouse facilities and cash incentives to strengthen Bangladesh鈥檚 participation in global EV value chains.
To oversee implementation, the draft explained that a three-tier governance structure would be formed, headed by the Electric Vehicle Industry Development Council chaired by the industries ministry and including representatives from key ministries, agencies, and industry experts.
It added that two supporting bodies 鈥� the Policy Implementation Committee and the Technical Committee 鈥� would ensure coordination and timely delivery of the policy鈥檚 phased targets from mid-2025 through 2040.
