Akhlaqur Rahman Sachee

Mr. Mustafa Al Momin is the Co-Founder and CEO of Palki Motors. He is an electrical engineer who graduated from Montana State University, MT, USA. He has more than seven years of experience in electric vehicles, renewable energy, software product management, and entrepreneurship. He is a Grameenphone’s GP Accelerator alumni and a graduate of Silicon Valley’s Founder Institute. Team MBR was in a conversation with Mr. Mustafa Al Momin and was fortunate enough to receive his take on electric vehicles.

Akhlaqur Rahman Sachee: Market research says that the worldwide electric vehicle (EV) market is about to grow at a CAGR of 21.70% from around 8.15 million units in 2022 to around 39.21 million units in 2030. Would you kindly share with us the drivers that will fuel this projected growth?

Mustafa Al Momin: First of all, there are three different markets for EVs in Bangladesh. One market is the luxury passenger electric cars that Tesla and other high-end EV companies are making. Then there is a market for utility EVs like electric buses, microbuses, and other commercial passenger cars, and lastly, there are EVs that carry goods. Bangladesh has more than 2 million electric auto rickshaws and more than 4 million rickshaws. They carry passengers commercially. At Palki Motors Limited, we are focusing on commercial passenger cars and commercial pickup trucks. This market size is enormous in Bangladesh. The main growth drivers will be the rapid GDP growth of the country and the high price of fossil fuels. Electric cars cost only BDT 1.51 per KM, ensuring that one lithium iron phosphate battery runs for 100,000 KM before reducing its life to 80% capacity. This is the main attraction for commercial passenger car drivers and companies to buy pickups.

Akhlaqur Rahman Sachee: A significant increase in sales of hybrid vehicles has been observed in Bangladesh in recent years. Do you think that it is an indication of the potential prosperity of the EV market in the country?

Mustafa Al Momin: Most of the hybrid car owners are well off and belong to 1% of the population. I do not think buying more hybrid cars is an indicator of the potential prosperity of the EV market in Bangladesh. Instead, I believe more than 300,000 electric auto[1]rickshaws being sold in the country is the main indicator of prosperity. The person who buys a hybrid car does so for availability and to show off. Because second-hand car sellers see more profit from hybrids, they import more of them. Also, because Japan uses more hybrid cars, when they salvage their cars at dumpsters, second-hand car sellers buy them and bring them to Bangladesh to sell to the well-off Bangladeshi people. Japanese consumers are dumping more hybrid vehicles nowadays. That is why we have more hybrid cars on the street. So, this is not an indicator of prosperity for EVs.

Akhlaqur Rahman Sachee: Lack of EV-friendly infrastructure, e.g., lack of availability of EV charging stations, is supposed to hinder the growth of the EV market in Bangladesh. What infrastructural developments are required, in your opinion, to ensure the healthy growth of the EV market in Bangladesh?

Mustafa Al Momin: Lack of infrastructure is not just a problem. Rather, it is a chicken-or-egg problem. We do not have more EVs because there is no EV-friendly infrastructure, and we do not have EV-friendly infrastructure because there are very few EVs in the market. Now, as I say, there is no EV in the market; the information is inaccurate. It might be true in layman’s terms. But, as I have mentioned above, there are more than 2 million electric auto-rickshaws in the market. So, we must ensure that those auto rickshaws use the latest battery charging technology. We can make a rule that those electric auto rickshaws must use lithium iron phosphate batteries, and they must be compatible with high-power superchargers. In that case, we get lots of superchargers in the market automatically. So, instead of thinking of the electric auto rickshaws as a disease in the EV market, we have to bring them under safety regulations and specifications. They will be major elements in building EV-friendly infrastructure. This way, we will have all the EV-friendly infrastructure required for the country to fulfil its dream of having fossil fuel car-free streets by 2050.

Akhlaqur Rahman Sachee: One of the reasons that Bangladeshi buyers are discouraged from purchasing hybrid or electric vehicles is the high cost of replacing batteries. What cost-effective solutions can the EV manufacturers offer to solve this issue?

Mustafa Al Momin: I do not think that only the high price of batteries is the primary reason for the discouragement of buying HEVs or EVs. The cost of the car itself is very high, too, due to excessive customs duties. The customs duties are high because the government wants the entrepreneurs to come forward and establish plants for local value addition. I firmly believe that when companies like Rahimafrooz, Panna, and other lead acid battery manufacturers will come forward and manufacture the batteries required for HEVs or EVs, the price will drop, and people will be interested in buying more of them, as well as we need at least 5-6 companies like Palki Motors Limited that will make 100% made in Bangladesh cars so that this price is affordable.

Akhlaqur Rahman Sachee: There are misconceptions among buyers regarding the performance and reliability of EVs. What measures can the EV manufacturers take to address this concern?

Mustafa Al Momin: The misconceptions will be easily removed if the manufacturers first make the EVs and let the users drive for themselves. At Palki Motors Limited, we did precisely that. We built the EVs first and offered hundreds of test drives to genuine buyers. We took their feedback and improved the cars. The electric auto rickshaws have already proven their performance. I am talking about electric auto rickshaws because this is our present, and we should not copy ideas from EV giants like Tesla because our geology is different, our people are different, and our GDP is distant from that of the USA or any other developed nation. We have to innovate, thinking about our people and our environment.

Akhlaqur Rahman Sachee: The National Board of Revenue (NBR) has proposed Advance Income Tax (AIT) structure for EVs in line with conventional vehicles, considering 20 CC equivalent to 1 KW. How encouraging is this tax structure, in your opinion, for buyers to switch to EVs? What else can be done to encourage buyers to go for EVs instead of conventional vehicles?

Mustafa Al Momin: First of all, why 20 CC = 1 KW? I am an electrical engineer myself. I understand business and electricity. The conversion does not make any sense to me. I tried to do many backward calculations to understand why that conversion happened. The CC stands for cubic centimetres, which is the unit of volume, and 1 KW or 1,000 watts, is a unit of electric power. How can these two units be equivalent? The CC is the measurement of the combustion engine cylinder, and the watt is for electrical power. I tried to convert CC to joule, but again, different engines have different efficiencies, and we cannot convert all fuels to the same unit of joule. So, the unit conversion is wrong. Through this interview, I am requesting BRTA change the measurement units from 20 CC = 1 KW to something related to horsepower or torque. Then, we will have a conversion ratio that makes sense. After fixing the conversion error, I think BRTA or other authorities should look at Bangladesh’s present perspective. We should reform laws to legalise lithium iron phosphatase-based electric easy bikes. They provide a livelihood to more than 1 crore people. After legalising them and ensuring proper safety features, speed regulations, and aerodynamics, we must focus on building charging stations for easy bikes. Then, the whole market scenario will change. Electric easy bikes have been running in the country since 2016. It has been over five years already. If we had regulations and allowed electric auto rickshaws, the government could have earned billions of dollars in remittance from carbon trading. We still have time. Few other countries have this many electric vehicles running on the street. I do not think we have to encourage customers to buy EVs. They are already super excited to buy them because of their low maintenance cost and mileage. The government just has to take the initiative to make the registration process easy. According to the Automobile Industry Development Policy, 2021, the government has already mentioned all of those I have mentioned. The government wants to develop a one-stop registration service centre for hybrid and electric cars. I urge the government to implement what is written in that gazetted plan. We, the local automobile manufacturers, can fulfil the government’s plan to make Bangladesh the automobile manufacturing hub of the world. Finally, the tax structure is not fair. According to that structure, the car with a less than 75 KW motor will have the same tax as the 1500 CC car. A 75 KW motor[1]powered car is way more powerful than a 1500 CC car. In Bangladesh, most easy bikes run on 0.8 KW motors, and mini EVs like Palki’s City Boy run on 3 KW to 10 KW motors. The smaller EVs with high-end batteries like lithium require less energy to run. So, the government should segregate the tax structure. The tax slabs should start from 3 KW. And according to the Automobile Industry Development Policy, 2021, the government should charge tax only once every five years. The government should also give income tax rebates and all other supports to EV buyers, as mentioned in that plan.

Akhlaqur Rahman Sachee: The government has offered tax holidays for local EV manufacturers if locally sourced components are used to a certain extent. Is the policy support adequate for the local manufacturing of EVs to boom?

Mustafa Al Momin: Currently, there is no policy support at all. I have read the Automobile Industry Development Policy, 2021 thoroughly. The document is very high quality and complete. However, I do not see the execution of that beautiful plan. Startups like Palki Motors Limited, SOLshare, Green Tiger, ZigZag Car, and Fare Technologies can play a crucial role in that plan. These companies can build parts and an eco[1]system for EV users and make the adaptation quick. I request policymakers to create an environment so that startups like ours can play a part in the EV story. I urge the BRTA to make the approval process easy for startups that ensure quality to become OEM vehicle and parts manufacturers.

Akhlaqur Rahman Sachee: As the founder of Palki Motors, the very first EV manufacturing startup, please share your thoughts regarding the response you are receiving from prospective buyers. Are you hopeful about the prospect of the EV market in Bangladesh? Lastly, is the dream of a zero carbon footprint achievable?

Mustafa Al Momin: I am very hopeful about the future of EVs in Bangladesh. As a proud Bangladeshi, I have a legacy of electric vehicles. I am pleased that Bangladesh has more than 2 million EVs running on the streets today without any government support. That USD 2 billion industry flourished without any care from any authority. So, startups like Palki Motors Limited will flourish too. Palki Motors Limited is producing mini electric cars to assist 1 million commercial passenger car drivers in Bangladesh who are struggling to make ends meet because they do not own the vehicles they drive. Hence, they have to pay 40% of their daily income to the owners. We will provide the drivers access to affordable and locally manufactured vehicles that will enable them to make more money as they do not have to pay the rent every day. Our vision is to improve the lives of drivers involved in the transportation sector while assisting the sector in reducing its carbon footprint.

My main motivators are my customers. They constantly give us feedback, and we take the feedback very seriously. We are alive because the customers support us and cheer for us. Our customers build every atom of Palki Motors Limited. When they want something, we give them the highest priority. They have set up our marketing, our branding, and everything else. The dream of zero carbon is possible. But the transportation sector contributes only 27% of emissions, and other industries emit the rest. I believe the transportation sector will become a carbon-free inevitability. The mileage is already way cheaper than fossil-fuel cars. We are just due to making high-quality, affordable vehicles. Renewable energy products are net-zero carbon products. If all the EVs are charged by renewable energy, I think that makes zero carbon true. However, that is not possible within a few years. We need the government, the EV manufacturers, and the EV buyers to work jointly towards the goal.