EV incentives unveiled in Bangladesh as BYD eyes expansion
Under the government’s proposed 2026/27 budget, import taxes on EVs priced below $25,000 (~€22000) will fall from 93 per cent to between 66 and 80 per cent depending on value. Meanwhile, EVs priced up to $50,000 (~€44000) will see their tax burden cut to 80 per cent. At the same time, Bangladesh plans to raise the total tax burden on ICE vehicles from 132.36 to 155.88 per cent, as well as reduce taxes for all plug-in hybrids.
The government also plans to eliminate duties and taxes paid on chargers and associated infrastructure, while extending incentives for electric buses and trucks through to 2030. VAT rates for locally assembled EVs will drop to 5 per cent through 2030; meanwhile, Nikkei Asia reports that VAT will be scrapped completely for vehicles that feature key components manufactured in Bangladesh.
Bangladesh has set a target of 30 per cent EV market share by 2030 and is increasingly using tax policy to drive this transition. Recent measures also include incentives for local EV and battery manufacturing, with authorities hoping to replicate the growth seen in the country’s domestic automotive sector following earlier localisation policies.
The policy shift comes as BYD strengthens its presence in the South Asian country. Since entering the Bangladeshi market in 2024, BYD has continued to expand its local lineup. Earlier this year, the Chinese automaker signed a manufacturing and supply agreement with local company Runner Automobiles, which currently sells imported EVs from BYD as well as the Chinese two-wheeler brand Yadea. The partnership is expected to support technology transfer and help develop Bangladesh’s domestic EV industry, with the partners set to open an EV manufacturing unit in Bhaluka, 113km north of Dhaka.
Shanat Datta, chief financial officer of EV importer Runner Automobiles, commented: “We expect EV sales to gain momentum following the government’s incentives. At a time when global fuel supply remains uncertain due to geopolitical tensions in the Middle East, consumers are increasingly looking for alternatives to conventional fuel-powered vehicles.” He added: “We plan to go for EV assembling by the middle of 2027, following the government incentives.”
According to Aminur Rahman Mithu, Runner’s head of corporate affairs, the company plans phased investments of 2.6 billion taka (~€18.4 million) with the goal of developing a ‘made-in-Bangladesh’ EV in partnership with BYD. Rancon Motors, another local organisation, has also confirmed plans to invest 3 billion taka (~€21.4m) in EV assembly.
Encouraged by import exemptions, both companies look set to invest in charging stations – and with only 32 public charging stations in Bangladesh, new infrastructure is no doubt sorely needed to support the electrification of the country’s transport sector. Estimates suggest that over 1000 battery and plug-in hybrid EVs have been sold in Bangladesh since 2024, with only 250 home chargers across the country.
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