With rapid urbanization and population growth, there has been a significant increase in the demand for public transport. Fossil-fuel-based internal combustion vehicles are increasingly fulfilling the transport demand and are creating negative impact on the environment. Electric three-wheeler (E3W) vehicles have better prospects in public transport in Bangladesh. The demand and usage of E3W vehicles are increasing rapidly because of their pollution-free and passenger-friendly services. However, there are many challenges, including vehicle stability, regulation, energy supply, battery disposal, etc. This paper discusses the prospects and challenges of the E3Ws in Bangladesh in terms of technological and environmental aspects. The paper addresses the issues of E3W, such as existing structural problems, inherent limitations, consequences of uncontrolled battery charging, and improper battery disposal. Potential solutions to tackle these challenges have been suggested for future sustainable transport in Bangladesh. An overview of existing policies regarding E3W in Bangladesh has been presented, and some recommendations have been made to facilitate the integration of E3Ws in the public transport domain. A review of the technologies can provide a base for strategic E3W policy for the next generation of sustainable transport policies and can help policymakers to frame strategies aiming for clean technology and sustainable development of the transportation system in Bangladesh.