What Bangladesh can learn from Nepal’s electric vehicle revolution

Five years ago, Nepal's electric vehicle (EV) market penetration was roughly where Bangladesh's is today: virtually non-existent. But now, 76% of all passenger vehicles in Nepal are EVs. The transition was fast, furious, and remarkably effective.

Bite-Sized: How is Nepal leading the EV shift and what lessons await Bangladesh?

After the news of Nepal's electric vehicle revolution broke, global media outlets pounced on the story, eager to highlight the country's unexpected leadership in green mobility. And why not? Our South Asian peer, after all, leapfrogged leading EV markets like Norway and Singapore, while the global average of EV penetration hovers around just 20%.

Before the Nepalese government launched its push for greener transport — through effective policy implementation, leveraging the country's hydropower, and tackling the smog caused by fossil fuel-powered vehicles — it had imported only around 236 electric vehicles in 2019-20, compared to 10,310 diesel-powered ones.

To put this in context, as of March 2025, Bangladesh had just 396 registered EVs nationwide, including 54 private cars and 243 motorcycles, according to Bonik Barta. However, the country does have around four million unregistered electric auto-rickshaws, popularly known as Bangla Teslas. While this is a feat in itself, fossil fuels still dominate Bangladesh's transport sector, worsening its already severe pollution problem.

The transport sector in Bangladesh contributes significantly to national emissions, accounting for around 15% of total carbon output. It is also a major source of urban air pollution; in Dhaka, ageing and poorly maintained vehicles emit thick black smog, severely degrading air quality.

When the government recently attempted to remove outdated vehicles from the roads, owners resisted and threatened a transport strike to get the authorities to back down.

Electric vehicles, however, produce no tailpipe emissions, helping reduce urban air pollution and improve public health. Transitioning to EVs would also lessen dependence on imported fossil fuels and cut greenhouse gas emissions.

Moreover, EV adoption supports Bangladesh's national climate goals, which include reducing 3.4 million tonnes of CO₂-equivalent emissions from the transport sector by 2030.

So how did Nepal do it? In its drive towards a greener transformation, Nepal reduced the combined customs and excise duties on EV imports to a maximum of 40% in 2021, while petrol-powered vehicles continued to face a staggering 180% in taxes.

Remarkably, Nepal made this shift despite relying heavily on import taxes as a key revenue source. A recent New York Times report on Nepal's EV revolution noted that while a petrol-powered Hyundai SUV costs around $40,000, its electric counterpart is priced at approximately $38,000.

In addition, the country set up over 60 EV charging stations in Kathmandu and nationwide, while opening the market to private builders, waiving most import tariffs on chargers, and even distributing free transformers — the most expensive component.

And the country did not stop there; it also set electricity prices for EV chargers below market rates. As a result, the magic happened: charging an EV became nearly 15 times cheaper than fuelling a petrol-powered car. This incentive gave EVs not just the means to survive, but to thrive in an ecosystem long dominated by fossil-fuel vehicles.

Around the same time Nepal's EV revolution was unfolding, Bangladesh introduced its Automobile Industry Development Policy, 2021, which set targets to convert "a large portion of the vehicles produced by 2030, especially passenger and commercial vehicles such as buses, trucks, three-wheeler auto-rickshaws, passenger cars, etc., to the electric vehicle category".

Yet, as 2030 approaches, Bangladesh remains stuck at ground zero — reflecting the widespread perception that while the country has no shortage of laws and policies, implementation remains woefully lacking.

The 2021 policy also places special emphasis on the rapid adoption of eco-friendly electric vehicle (EEV) production in the country to reduce emissions. It promises attractive tax benefits for investments in EEV production or assembly — regardless of plant location, even if situated outside economic zones — as well as financial incentives including purchase subsidies, scrappage incentives, interest subvention on loans, and the development of a widespread charging network and battery recycling industry.

It is full of such bright ideas.

However, as noted, progress in Bangladesh remains nonexistent. Duties on EVs hover around 90%, only marginally lower than the 127% imposed on petrol-powered cars. While the policy promises a "wide network" of charging stations, a report by the Dhaka Tribune found there are only around 14 charging points currently available.

Another major challenge is the limited reliability and capacity of the electricity grid. 

Beyond adopting EV-friendly tax policies and integrated charging plans, if Bangladesh is serious about EV adoption, it must also focus on diversifying its energy sources beyond fossil fuels and pursue parallel expansion of green power.

From resolving policy uncertainties to encouraging long-term investment, tax incentives and infrastructure development, Bangladesh needs to take bold steps to create an overall enabling environment for green mobility.

The world will add a billion vehicles by 2050, according to the International Energy Agency. Much of the future air pollution and climate-warming emissions will depend on the extent of electric vehicle adoption. 

As one of the countries most vulnerable to climate change, Bangladesh has the potential to set an example by embracing bold decisions and fostering a supportive environment for green technologies.