Government agencies have formally recommended the suspension of the 30 percent import tariff on all electric vehicles (EVs) starting next year to achieve the targets designed under the Electric Vehicle Industry Development Act (EVIDA) and to help reduce gas emissions by adopting green mobility.

Patrick Aquino, director of the Department of Energy Utilization Management Bureau, during a press conference on Aug. 16 for the 11th PEVS with the theme “Plug-In and Accelerate”, said they have formally made a recommendation to the Tariff Commission (TC) to expand the coverage of zero duty to all electrified vehicles, such as two- and three-wheeler battery electric vehicles (BEVs), hybrid electric vehicles (HEVs), and plug-in hybrid electric vehicles (PHEVs), regardless of the country of origin.

However, Senator Win Gatchalian, the principal author of the EVIDA, has sought for the exclusion of two-wheeled electric motorcycles in a bid to protect local manufacturers of tricycles.

Executive Order 12, which removes the 30 percent on EVs, was only issued in January this year and took effect in February but was implemented only by the Bureau of Customs in June.

The current EO is good for five years and only covers pure EVs, although it provides for an annual review. Thus, some government agencies have already proposed for the revision of the EO to include new provision.

Aquino expressed hopes that the TC will allow the tariff suspension for the remaining four years of the EO. An EO on tariff, however, can only be issued by Malacanang when Congress is not in session.

Aquino is looking at two windows, which are the barangay election in October this year and the Christmas break.

“The proposal is to suspend import tariff, the word is import tariff suspension,” said Aquino, who also expressed confidence that the “TC will follow the same trajectory and listen to the recommendation because it’s not just DOE (Department of Energy) pushing for it, but the Department of Trade and Industry and the National Economic and Development Authority, as well, have thrown their support.”

In addition, the suspension of the 30 percent import duty is seen to apply to all EV importation regardless of the country source. This means EVs from outside ASEAN such as Japan, Korea, China, Europe and North America will be zero duty.

At present, only EVs from ASEAN countries have zero import duty while other countries have lower rate depending on their free trade deals with the Philippines.

While the suspension of tariff is expected to result in the lowering of prices of EVs in the local market, it also means foregone revenues for the government.

Aquino explained that the extent of the revenue loss will be shown during the TC public consultations. Nonetheless, he noted that the suspension of the EV tariff is timebound, just enough to support the development of the EV industry and help achieve the targets set under the EVIDA.

He also pointed out that the EVID law does not offer any other fiscal incentives to EV users. “We are not offering any subsidies and rebates, not offering lesser VAT. The fiscal incentives for users like you and me is down to the following — exemption from unified volume reduction scheme and 30 percent motor vehicle users registration,” he said.

While Aquino was looking at the 30 percent annual growth in EV adoption in the country, the domestic EV industry has been very bullish.

“We're looking at the possibility of having electric vehicles annually growing 30 percent,” said Aquino, citing the 9,666-unit registered EVs last year.

But the Electric Vehicle Association of the Philippines (EVAP) Chairman Emeritus Ferdinand Raquelsantos and Chairman Rommel Juan were both in agreement that the local EV sector has the capability to grow more than the 30-percent target.

EVAP data showed that they are projecting a total of 6,616,750 EV stock in the country by 2030 with the two-wheelers accounting for the bulk of 83.12 percent followed by passenger cars with 5.29 percent.