Bangladesh's transition toward electric mobility is taking shape as more than an environmental initiative, with the government positioning the electric vehicle (EV) sector at the center of a broader strategy to strengthen energy security, reduce dependence on imported petroleum and promote sustainable industrialization.
The National Budget for Fiscal Year 2026-27 (FY27) and the Bangladesh Climate Budget Report 2026-27 outline a series of tax reductions and incentives designed to accelerate the adoption of environmentally friendly transportation while supporting the growth of a domestic EV ecosystem.
The move comes against the backdrop of Bangladesh's heavy reliance on imported energy. According to the budget documents, the country currently imports approximately 95 percent of its petroleum requirements, making fuel dependency a significant national concern.
Finance Minister Amir Khosru Mahmud Chowdhury underscored the strategic importance of the transition, saying, "A substantial increase in the use of solar power and electric vehicles will reduce the country's dependence on imported fuel oil.”
He added, “We want Bangladesh's industrialization to be productive, sustainable, and environmentally friendly."
To encourage EV adoption, the government has introduced substantial reductions in the total tax incidence (TTI) on imported electric vehicles. For EVs priced up to US$ 25,000, the TTI has been reduced from 93 percent to 64 percent.
For vehicles priced between US$ 25,000 and US$ 50,000, the TTI has been lowered from 93 percent to 80 percent.
The budget also seeks to remove barriers to the expansion of charging infrastructure, a critical component of the electric mobility transition. The total tax incidence on EV chargers and charging stations has been reduced from 39.75 percent to zero percent.
At the same time, the withholding tax rate on the import of electric charging stations has been cut from 5 percent to zero percent.
