Industry players are divided over the grant of incentives on two-wheel electric vehicles (EVs) or motorcycles as well as on hybrid vehicles under a proposed expanded coverage of Executive Order (EO) 12 that waives duties on pure EVs for five years.
In a public hearing of the Tariff Commission yesterday, Edmund Araga, president of the Electric Vehicle Association of the Philippines (EVAP) said duty exemption on e-motorcycles should be limited only to one year with a commitment to engage in completely knocked down assembly of the same model or another model on the second year.
“Granting of tax exemption should be strategically calibrated to support local EV charging infrastructure,” said Araga, adding longer tariff exemption period for e-motorcycles would hinder efforts to jumpstart and develop the local e- motorcycles manufacturing industry.
EVAP also expressed strong opposition to the expansion of tariff exemption to include hybrid EVs, saying this could lead to revenue losses.
“Hybrid EVs fully source their power from petroleum and do not contribute to the development of the charging infrastructure which is one of the main objectives of the Electric Vehicle Industry Development Act,” EVAP said in a position paper.
The group said further reduction in prices of hybrids would be detrimental to the growth of battery EVs and would further slow down the charging infrastructure development.
According to EVAP, hybrids are priced competitively and the adoption to these vehicles has been growing.
Elvin Garcia, representing the Board of Investments (BOI) in the same hearing, said hybrid vehicles enjoy healthy double digit growth in sales and “inclusion (in EO 12) might no longer be needed.”
“Hybrids are now competitively priced. With hybrids, there is no need to wait for widespread electric charging (as they) can run using the ICE (internal combustion engine) part. There is a portion of hybrids exempt from color coding, that’s another incentive,” Garcia said.
The Chamber of Automotive Manufacturers of the Philippines Inc. (Campi) said it supports the expansion of tariff exemption to the full range of hybrid EVs and plug in hybrid EVs in the broader perspective of fuel consumption reduction and emissions mitigation.
Campi said all EV technologies can significantly contribute to the attainment of carbon neutrality.
“We’re only looking at a period of five years as a temporary measure,” Campi said.
Willy Tee Ten, representing the European Chamber of Commerce of the Philippines and founder of vehicle importer Autohub Group, said the one- year duty exemption on e-motorycles is too short.
“If we give exemption to four wheels why not to two wheels which is a major contributor to pollution?,” Ten said, adding e- motocycles are granted incentives in other countries.
Iniego Carl Varon, head of legal and compliance of Gogoro Philippines, cited the need for zero duty on e- motorcycles to take advantage of the current demand for this type of vehicle.
Varon said while Gogoro agrees with EVAP that the importation should be limited as “we want to have local manufacturing ultimately,
I agree with the position of Autohub one year is too short a time to be able to have a local manufacturing.”
Varon said EV technology is costly and manufacturing takes time to establish.
“We (first) need to drum up demand for e-motorcycles. With a zero percent incentive, we can make it affordable and more accessible,” he said.
Varona said Gogoro seeks a five-year duty exemption or until EO 12 lapses in February 2028.
Autohub said e-motorcycles can be an option as government starts regulating the industry.
The BOI expressed reservation over the inclusion of e-motorcycles, and said issues like registration, road use and public safety should be considered.
