The Ayala Group sees a five-year window in solidifying sourcing of electric vehicles (EVs) and building an EV ecosystem just when cost parity is achieved by this type of vehicle with its internal combustion engine (ICE) counterpart.
Antonio Zara, president of AC Motors Automobile Group, in a presentation, said the five-year exemption from duties and excise tax given to pure EVs under Executive Order 12 would reduce the purchase price of EVs significantly, allowing the introduction of mass market models, particularly the B segment of vehicles or those which cost at around P1.5 million.
This would eventually accelerate adoption straight to EVs, bypassing the hybrids which are still subject to taxes and duties.
According to AC Motors’ study, EVs would take up as much as 14 percent of total motor vehicle sales by 2027 from a forecast of 2 percent this year.
Zara said if the exemptions are lifted after 2027, AC would tap the Philippines’ free trade agreements such as with Korea where tariff on car imports is a low 5 percent. There are negotiations to bring this down to zero.
During this five-year period, Zara said brands should have established EV manufacturing not just in Korea but also in Indonesia and Thailand with which the Philippines has an FTA.
“In a scenario where government does not extend (the incentives), all the sourcing will naturally gravitate to these markets. China would be closed out because the free trade agreement with China does not allow EVs and allows only cars with engine size of less than 1.5 liters,” Zara said.
Zara said the Philippines is too late not just in EV manufacturing but in automotive manufacturing in general.
“We need to find our niche just like how Thailand defined its own with the pick-up and the big bikes,” Zara said, adding the Philippines’ niche is in commercial vehicle manufacturing such as vans for public utility.
According to Zara, the transformation of the Philippine market towards electrified mobility is inevitable.
“It’s just a matter of time,” said Zara, adding brands under the AC Group are gearing up towards such transition.
“We expect the (B) segment or (vehicles costing) P1.5 million will achieve parity in total cost (in five years). That’s when you will start seeing shifts from ICE to EVs on a larger scale. The shift will not be only for private vehicles but even for for-hire vehicles because the cost benefit for maintenance and for energy is significantly much more. The cost of ownership for for-hire will be cheaper,” he said.
Zara said AC Motors and the Ayala Group are building an entire ecosystem for the EV: Ayala Land for the infrastructure; Bank Philippine Islands for financing; AC Industrials for the hardware; 917Ventures for the software infrastructure and; AC Energy, one of the biggest renewable energy producer in Southeast Asia.
“We are in a unique position to fulfill this ecosystem. So while we will continue our drive to supply the market with ICE (vehicles), we’re taking this opportunity to grow our share actively and aggressively (in EV),” Zara said. Irma Isip
