AC Motors, the automotive arm of the Ayala Corp. conglomerate, aspires to become a pioneer in new energy vehicles sector and preeminent auto group in the country through disruptive technologies four years from now or by 2025 through disruptive technologies.
AC Industrials Chairman and CEO Arthur Tan revealed at the virtual “Mobility: Building an E-Vehicle Ecosystem”, a Liveable Cites Lab organized by the Liveable Cities Challenge Philippines and the League of Cities of the Philippines, that AC Motors aims to become a P50-billion revenue company, with 10 percent industry share and over P1.3 billion net income by 2025.
To achieve this, Tan said the company will pursue vehicle manufacturing, expand its multi-auto brand distributorship and retail business, and strengthen after sales services including financing, mobility, leasing, and parts distribution, among others.
So far, AC Motors is manufacturing and exporting motorcycles to
“This is to prove the fact that if we actually decide as a country, and we work together from a private public perspective that we can actually overcome all these myths that the Philippines is a service economy,” he said. AC has also subsidiaries handling exclusive distributorships in the country for global auto brands such as Volkswagen, Kia, and Maxus as well as interest in Honda Cars Philippines and Isuzu
In 2015, the Ayala Group teamed up with Austrian KTM AG to build a motorcycle production plant in Binan, Laguna. The motorcycle factory has manufactured more than 23,200 motorcycles. The facility expects to export 80 percent of its production of over 12,000 motorcycles, including 21 percent to ASEAN, this year.
Ayala Corp. through AC Industrial Technology Holdings Inc. is also engaged in automotive and electronics manufacturing.
The Board of Investments (BOI) has identified e-vehicles as priority economic activity, which is entitled to tax incentives under the CREATE Law and non-fiscal incentives. These include income tax holiday of 4-7 years, enhanced deduction of 5 or 10 years, duty-free importation of capital equipment, raw materials and accessories. EV exporters are also entitled to special corporate income tax for 10 years. Those that registered under the Motor Vehicle Development Program are also 1 percent or zero duty importation of parts and components.
BOI Executive Director Corazon Halili-Dichosa said that the government’s approach to e-vehicles is aligned with the recent World Bank study on reconfiguration of Philippine participation in global value chains or GVCs, which has seen a rapid switch to electric vehicles.
Currently, the Philippine automotive industry is composed of multinational and local manufacturing companies that serve the domestic and export markets. Pre-pandemic, the domestic formal market was around 350,000 units, and local production at almost 100,000 units. The motorcycle segment had sales over 1.7 million units, and production level of 1.2 billion units.
“New registrations of EV in the country have been increasing for the past 10 years, with almost 13,000 registrations, the majority are electric motorcycles and electric tricycles, while a small portion is accounted for by e-jeepneys. This trend is expected to continue as demand for solo mobility and EV sales increased during this pandemic, as a way to deal with health protocols for many going to work,” she added.
The transition on some electronic assembly firms like Foxconn, for electric vehicle assembly, will provide some opportunities for the
She cited data showing that electric vehicle sales were the least affected by the pandemic in 2020 with Tesla, doubling its sales in
To ensure the
These include human resource development, research and development, as well as industry support programs. For regulations, the Land Transportation Office (LTO) Administrative Order 20201- 039 provides for the consolidate and guidelines in the classification, registration and operation of all types of electric motor vehicles. The Department of Trade and Industry has also issued Department Circular number 2021-07-0023 providing for a policy framework on the guidelines for the development, establishment and operation of electric vehicle charging stations.
On Philippine National Standards, she added, there are also standards for vehicles, batteries, charging systems charge ports battery swapping systems, connectors, and other key parts and components of an electric vehicle.
The World Bank study has cited the country’s building blocks to support a competitive EV industry in terms of converting voluminous quartz and cobalt resources into lithium ion EV batteries to leveraging electronics strength to transition into EV electronic systems and sub assemblies for design customized integrated circuits for automotive OEMs and tier one companies. The
“In this light, the opportunity for us lies in upgrading our participation in the electronics vaccines. We can do well by attracting foreign direct investments to complement our local investments in the same capacity so that more value added is captured and manufacturing retained, and expanded. In this regard, the government has these existing support programs in place,” she said.