EVAP seeks 5-year extension of zero tariff for EVs, parts

Extending the modified import duty rate on electric vehicles (EV), parts, and components for another five years will be good for the country’s EV industry, the Electric Vehicle Association of the Philippines (EVAP) said Thursday.

At a press conference during the 11th Philippine EV Summit 2023, EVAP president Edmund Araga said that following the issuance of Executive Order No. 12 last January, EV sales in the country rose 15% in the first quarter of 2023 alone.

“That is an indication that the impact of EO No. 12 is significant,” Araga said.

President Ferdinand Marcos Jr. issued EO No. 12, which modified the tariff rate on four-wheeled EVs, parts, and components to zero for five years, after the National Economic and Development Authority Board endorsed the temporary reduction on import duty.

The EO cited Republic Act 11697 or the Electric Vehicle Industry Development Act (EVIDA), which declared it a state policy to ensure the country's energy security and independence by reducing the reliance on imported fuel for the transportation sector.

The law also provided for the state to enable the development of electric vehicles, including options for micro-mobility as an attractive and feasible mode of transportation.

Araga, however, said that the five-year period of modified tariff rates for EVs under EO No. 12 “actually is still a short time.”

“If you ask me, yes, we want [an extension] because it is beneficial to us… Another five-year [extension] will be better,” he said.

The EVAP chief said that once the five-year period lapses, a review of the EV industry performance will be conducted, and “that is the time that they [government] would reassess whether to extend the [modified] tariff,” Araga said.

Based on the data from EVAP, there are about 15,3000 EV units being used in the country.

The group is projecting the EV stock to reach more than 6.6 million units by 2030.

Senate committee on energy vice chairman Sherwin Gatchalian also floated the possibility of further extending the zero excise tax rate on EVs and 50% on hybrid vehicles.

Under the Tax Reform for Acceleration and Inclusion (TRAIN) law, the 100% excise tax exemption for pure EVs and the 50% exemption on hybrid ones have a “sunset period,” meaning they are temporary for a maximum period of seven years.

“The theory is that, at a certain point in time, EVs will be as competitive as internal combustion engine vehicles, so there's no need to remove excise tax anymore,'' Gatchalian said. 

“[But] if we see that electric vehicles will still not be competitive at a certain point, we can extend the deletion of excise tax,” the senator said. —VBL, GMA Integrated News