The Tesla trap: How battery retailers deceive the working class

Tesla is a name familiar to one and all. To science buffs, it is the inventor; to gearheads, the electric car giant. But for the average Bangladeshi, it means something else entirely.

And that is an electric three-wheeler commonly known as a "battery rickshaw." Just like the Tesla car, Bangladeshi Tesla has many variants: E-rickshaw, Mishuk & EZ bike, which are also commonly known as "Auto." Nowadays, a Cybertruck-like van is also common in the streets of Dhaka.

Recently, these electric three-wheelers have been the talk of the town. To be very specific, how unsafe these vehicles are and should not be running on main roads. As a strong physical execution of antithesis, we have witnessed the protest from the rickshaw puller or, more appropriately, from the riders as well.

But it is not common knowledge that the batteries that are powering these vehicles are even more inimical than the poor braking system they have. There are multiple studies from iccdr, b, which show our blood lead level is deleterious and which is waning our lifetime and hampering our children's cognitive development. And the sheer part of it comes from these lead batteries.

Researchers from Stanford University and Georgetown University have been studying the lead batteries market in Bangladesh for the past few years. The findings from their study are pretty compelling. The study shows how the market operates, how the consumers of these batteries are being exploited, and later on, how it is having a huge environmental footprint, which could be controlled if we could take a few steps.

Imagine you are an E3W (electric three-wheeled vehicle) owner-driver in a bustling city of Bangladesh, relying on your vehicle to support your family. The heart of your livelihood is your lead-acid battery set, a hefty 125 kg component. The most critical thing for you is how long that battery will last because replacing it costs a significant $730. You want a durable battery, but how do you know which one is truly long-lasting?

To uncover the truth, researchers from Georgetown, Stanford, and the University of Illinois partnered with the ARCED Foundation for an ambitious undercover investigation that would expose one of the most systematic cases of market manipulation ever documented.

ARCED Foundation helped orchestrate what became retail theatre on an unprecedented scale. They recruited and trained 12 enumerators to become method actors, transforming them into five distinct customer personas. 

The wealthy multiple e-rickshaw owner arrived in crisp shirts and expensive watches, casually mentioning his five vehicles while emphasising that price wasn't a concern. The inexperienced, poor driver shuffled in wearing worn clothes, nervously explaining that this was his first battery purchase and desperately seeking guidance within his tight budget.

Over two months, these enumerators conducted 1,122 mystery shopping visits across 261 battery shops in greater Dhaka. Each interaction followed carefully scripted conversations designed to reveal economic status, level of experience, and whether they rent their vehicle, while requesting the same crucial information: which battery lasts longest?

The results shattered any faith in market fairness. Instead of consistent recommendations for quality batteries, the 261 retailers suggested 190 different brands. Even more damning, 77% gave completely different recommendations based purely on how much money they thought the customer had. Not their level of experience or whether they drive their own vehicle, but only based on their economic status.

When researchers privately surveyed retailers about manufacturer incentives, the exploitation became crystal clear. Our study elicited a troubling insight: 34% of respondents recommend brands that are financially advantageous to themselves as the "longest-lasting" options for low-income customers, while guiding wealthier clients toward genuinely superior products. The information asymmetry wasn't accidental; it was weaponised.

The price discrimination cut even deeper. Poor customers paid 2-3% more for identical batteries despite explicitly begging for budget options. But the cruellest manipulation involved battery life estimates. Retailers told poor customers their batteries would last 24 months to justify inflated prices, while quietly giving wealthy customers a more realistic 15-month estimate for the same brand of battery. The poor weren't just paying more; they were being systematically lied to.

Perhaps most telling was what researchers discovered about the used battery market, or rather, what didn't exist. Retailers offered identical trade-in prices regardless of age, condition, or performance, basing everything purely on scrap lead value. When customers claimed their batteries were nearly new and high-performing, not a single retailer showed interest in verification or offered price premiums.

This created the textbook adverse selection problem that economist George Akerlof famously described as the "lemons market." When customers can't distinguish quality products from inferior ones, manufacturers have no incentive to produce superior goods. 

Why invest in better batteries if customers can't identify them and are not willing to pay a higher price? The market inevitably devolves into a race to the bottom where only "lemons," cheap, short-lived products, survive.

The consequences extend far beyond economics into a public health catastrophe. Short battery life accelerates the rate of battery recycling. The majority of the batteries in Bangladesh are informally recycled with very poor environmental standards, releasing toxic lead emissions that permanently damage children's cognitive development. In Bangladesh, two-thirds of children already have blood lead levels that reduce intelligence. The lemon market isn't just cheating customers; it is poisoning an entire generation.

Breaking this cycle requires shattering the information monopoly that retailers have exploited so ruthlessly. The researchers propose creating digital traceability systems, battery passports that track the useful life of a battery from manufacture to recycling, similar to emerging systems in the European Union. With public information about the useful life of a brand of battery, customers can choose the long-lasting ones, and firms will therefore invest in battery durability. 

Government monitoring systems could create public databases showing actual battery performance (e.g., cycle life (number of charge-discharge cycles before capacity drops below 80%), capacity retention over time, charge efficiency, self-discharge rate, temperature tolerance, safety incident rate, and warranty fulfilment rate) by brand, finally giving customers the transparency they desperately need. 

Meanwhile, premium manufacturers should bypass retailers who spread misinformation entirely, selling directly through microfinance partnerships where loan terms themselves signal quality. 

Once the information gap is effectively closed, the marketplace begins to function as it should: equitably, transparently, and in service of the public good. Rickshaw owners, equipped with reliable knowledge, can make informed choices, free from exploitation and harmful products such as lead-laced batteries. 

This shift not only safeguards individual livelihoods and public health but also reinforces the broader principle that markets must work for the poor if they are to work for society at large. In doing so, we lay the foundation for inclusive growth, environmental responsibility, and enduring economic dignity.

Sayed Jobaer Hasan is a Research Associate at ARCED Foundation. ARM Mehrab Ali is the Executive Director of ARCED Foundation.

Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinions and views of The Business Standard.