EV charging infra investors seek tax breaks

By Myrna M. Velasco

The oil companies being invited by the government to set up electric vehicle (EV) charging infrastructure facilities have been seeking tax credits or other forms of incentives from the Department of Finance (DOF) and other relevant government agencies.

Many countries installing EV chargers have been bestowing tax breaks to investors; as well as incentives or subsidy schemes to buyers of electric vehicles – even for developed countries like the United States, European member-states, China, Japan and India. EV investment perks in these countries range from tax exemptions, tax credits as well as other perks like access to bus lanes and waivers on parking and toll fees.

In the Philippines, initial tax breaks came in the form of lower excise taxes for EVs under the first package of the Tax Reform for Acceleration and Inclusion Act (TRAIN) – that had been vis-à-vis the higher tax rate impositions to conventional vehicles.

“In the longterm, I guess EVs will reach Southeast Asia, but it will require some level of support from the government – it’s still more expensive to produce cars. So you need a whole program and incentive schemes to make that happen,” Petron Corporation Chief Finance Officer Emmanuel E. Eraña has asserted.

Phoenix Petroleum Philippines President Dennis A. Uy indicated that they are looking at the same investment trajectory for EVs – not necessarily for now, but in the longer term.

Nevertheless, for the propounded build-up of EV charging infrastructure, prospective investors noted that the “tax regime” and incentive schemes are not clear, hence, they have been urging the government to lay down explicit policy direction as well as standards on EV fleets and infrastructure build-up.

Leading oil firm Petron, in particular, admitted that it has been looking at setting up EV charging stations, on the invitation of the Department of Energy.

Nevertheless, according to Petron General Manager Lubin B. Nepomuceno they are looking at several concerns that may eventually stymie investment propositions on this domain – mainly on tax perks, the chicken-and-egg dilemma on rollout of EVs; technology obsolescence predicaments on the battery; as well as power grid stresses that may be triggered by fast-charging mold for large electric vehicles.

“Whatever the government wants to do with electric vehicles, we’ll support it… they want us to put charging stations... we can look at some where it can be installed, but we wouldn’t want to install them in areas where there would be safety issues,” he said.

Nepomuceno reckoned though that EV charging installations are not even a problem at this point, because the bigger industry muddle is actually the lack of electric vehicles yet that shall be utilizing them.

He added that the “throw-away technologies” on the battery for EVs would be another matter that government must deeply discern, with him emphasizing that “there are intrinsically linked problems to EVs… what they’re saying is: At 70 percent, you can’t use the battery anymore – so where do you now dispose that?”

The Petron executive further stressed “if you talk about large vehicles, imagine if it is fast-charging, you will be draining the grid – there are attendant problems for cities that have a grid to even use it for big vehicles – these have been draining the grid and have been causing problems on their power supply.”