EVAP says extended tariff perks key to meeting clean transport target

By Beatriz Marie D. Cruz, Senior Reporter

THE ELECTRIC VEHICLE Association of the Philippines (EVAP) is urging the government to extend tariff incentives for imports of electric vehicles (EV) and components through 2040, saying the move would support the Department of Energy’s clean transport goals and accelerate EV adoption.

“The DoE’s targets extend until 2040. So, for the industry, we hope that the incentives are granted until 2040 also so more people can adopt EVs,” EVAP Vice-President Carla Buencamino told reporters on the sidelines of an event last week. 

“We have to sustain, if not, further improve what these incentives are,” she said.

Under the Philippine Energy Plan, the DoE is targeting EVs to make up half of the country’s vehicle fleet by 2040 and 60% by 2050.

In 2023, President Ferdinand R. Marcos, Jr. issued Executive Order (EO) No. 12 which slashed import duties of certain EVs and their parts and components to zero for a period of five years or until 2028. Tariffs previously ranged from 5% to 30%.

In 2024, Mr. Marcos expanded the tariff exemptions to cover e-motorcycles, e-bicycles, nickel metal hydride accumulator batteries, e-tricycles, quadricycles, hybrid EVs (HEVs), plug-in hybrid EV (PHEV) jeepneys or buses, battery electric vehicles (BEVs), HEV and PHEV cars and trucks, and completely knocked down EVs for all types of vehicles.

At the same time, EVAP also welcomes legislative proposals aimed at encouraging mass EV adoption, Ms. Buencamino said.

“We welcome all of these initiatives because we have to continue to incentivize this industry,” she noted.

Senator Sherwin T. Gatchalian had filed Senate Bill (SB) No. 2270, which seeks to expand the scope of Republic Act No. 11697 or the Electric Vehicle Industry Development Act (EVIDA).

It proposes to grant zero import duties on all EVs, as well as their equipment and infrastructure. It also seeks to extend the validity of EVIDA’s fiscal and nonfiscal incentives to 12 years from the issuance of its implementing rules and regulations, from the current eight years since the effectivity of the law.

The bill also seeks to provide additional incentives for EV users, such as parking discounts and toll-free expressway access.

Ms. Buencamino, who is also the head of mobility infrastructure at Ayala-led ACMobility Holdings, Inc., noted the government’s role in building the Philippines’ EV ecosystem.

“The government is a large procurement body, so this is really where they can show the example of doing the transition so that the private sector can follow suit,” she said.

Ms. Buencamino said there is a need to streamline the process for setting up the necessary infrastructure to support the country’s EV ecosystem.

For instance, the varied requirements and processes across local government units is delaying ACMobility’s rollout of EV charging stations nationwide, she added.

“If we want to go for high numbers, we’re really hoping to have a streamlined process,” she noted.

ACMobility, which has a growing EV charging network, is looking to set up 1,000 charging points this year.

As of July, the company has set up over 500 charging points across 250 charging locations. The company’s EV charging network comprises more than 45% of DoE’s registered charging stations, Ms. Buencamino said.

Sought for comment, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the government should carefully balance the extension of EV tariff incentives with measures aimed at incentivizing domestic EV production.

“The two could compete at some point,” he said in a Viber message.

“That should be the consideration on whether or not to extend the tariff exemptions for EV imports — if locally produced EVs are adversely affected by cheaper EV imports.”

In July, Mr. Marcos issued EO 121 establishing an Electric Vehicle Incentive Strategy program, which seeks to encourage EV manufacturers to set up their facilities here.

EV demand in the Philippines has accelerated this year as fuel prices soared due to the ongoing Middle East conflict.

As of end-July, total EV sales surged by 136.4% to 38,286 units from the 16,195 units sold in the same period last year, according to the latest data from the Chamber of Automotive Manufacturers of the Philippines, Inc. and the Truck Manufacturers Association.