EVAP wants zero import tariff only for EVs, PHEVs

Published May 17, 2022, 3:16 PM

by Bernie Cahiles-Magkilat

A group that pioneers in the promotion and development of e-vehicles (EVs) in the country has proposed to limit the zero import tariff privilege to plug-in hybrid electric vehicles (PHEVs) and full electric vehicle (EVs) and exclude hybrid electric vehicles (HEV) as these are conventional vehicles using the internal combustion engine (ICE).

The Electric Vehicle Association of the Philippines (EVAP) strongly argued its position to exclude HEVs from the zero tariff rate for EVs in an official submission to the Tariff Commission, which is hearing the removal of the 30 percent tariff most favored nation (MFN) rate for EVs as mandated under the RA 11697 or the Electric Vehicle Industry Development Act (EVIDA).

Primarily, EVAP would like the zero tariff privilege to adhere to the intent of the law EVIDA that it be limited to imported PHEVs and full EVs.

According to EVAP, HEVs are actually internal combustion engine or conventional vehicles in the sense that they source their power solely from petroleum and charging is done via its internal combustion engine.

“HEVs don’t contribute in diversifying energy HEVs are actually internal combustion engine or conventional vehicles in the sense that they source their power solely from petroleum and charging is done via its internal combustion engine,” stated the position paper signed by EVAP President Edmund A. Araga.

EVAP further said that HEVs don’t contribute in diversifying energy sources in the country which is one of the main intentions of the EVIDA law. HEVs are not even classified as Zero Emission Vehicles (ZEV), unlike PHEVs, thus are treated differently.

The higher cost of electrified units are mostly traced to their batteries, but EVAP noted that unlike PHEVS and EVs, batteries of HEVs are smaller thus they are cheaper and already approaches the cost of pure ICE vehicles.

“Providing similar incentives to HEVs will lead to significantly lower prices than PHEVs and EVs and eat up the market and slow down the adoption of PHEVs and EVs which would be detrimental to the whole intention of the initiative. It is important to provide an upper hand to PHEVs and EVs relative to HEVs,” EVAP said.

According to EVAP, it is common for countries now to provide incentives only to PHEVs and EVs and exclude HEVs as they are often considered as conventional vehicles and are already mostly competitive price wise. In addition, EVAP pointed out that HEVs have been included already under the TRAIN law excise tax incentives (50%) despite being a conventional vehicle.

Aside from HEV, EVAP also proposes the exclusion of electric-jeepneys (e-jeepneys) and electric-tricycles (e-trikes) from the tariff exemption so as not to affect the development and growth of the local e-Jeepney and e-Tricycle industry.

Moreover, EVAP has called for the provision of new tariff codes for some items instead of lumping them in existing codes to avoid confusion in implementation. This is mostly true for the key electrical components of electric vehicles including battery cells, packs and modules, traction motors and motor controllers.

EVAP has identified 19 tariff codes and items that need to have separate codes.

EVAP Chairman Ferdinand Raquelsantos said there are roughly 10 EVs and PHEV brands in the local market at present.

Nissan Motor Philippines has already made available its full EV car LEAF in the local market. Other EVs and PHEV models in the country include Mitsubishi Outlander, BYD E6, Dong Feng Rich 6 pick-up, Audi e-Tron, Dolphin, Changan, Jaguar I-Pace, Porsche Taycan, and Hyundai’s Ioniq, and Kona.

Toyota Motor Philippines, the country’s number one car brand, has only HEV models including Corolla Altis, Cross, Camry, RAV4, and Prius. Fort Lexus, its HEV line-up include LS, ES, IS, RX and NX.