DOE expects approval of zero-tariff on all EVs this year

MANILA, Philippines — The Department of Energy (DOE) is hopeful that the incentives on the importation of electric vehicles (EVs) will be extended to two-wheeled and three-wheeled units this year to help boost EV adoption in the country.

A recommendation was earlier made to the Tariff Commission for the inclusion of two and three-wheeled EVs in the executive order that enforces zero-tariffs on EVs.

A zero tariff for EVs under Executive Order 12 signed by President Marcos in January last year applies only to four-wheeled vehicles.

“We have discussed this already with the Tariff Commission, and the Energy Utilization Management Bureau (EUMB) is working with the Department of Trade and Industry in coming up with a cost benefit analysis. But we have already flagged this before the secretaries that we really have to extend the incentives to include hybrid, two-wheeled and three-wheeled electric vehicles for friendlier zero tariff treatment,” DOE Undersecretary Felix Fuentebella said.

“Incentives that were given to pure EVs should be extended to hybrid, two-wheeled and three-wheeled,” he said.

A deliberation on the recommendation is slated to be held next month.

“In terms of getting the actual issuance, the President exercises power when Congress is not in session. We’re looking at the Easter window, Holy Week. If not issued by then, then the next window is the break for summer,” DOE-EUMB director Patrick Aquino said.

The issuance of EO 12, which temporarily reduces the tariff rates to zero percent on completely built-up units of certain EVs for a period of five years, is one of the government’s efforts to help improve EV adoption in the country.

The DOE said that by eliminating the tariff rates for the two and three-wheeled EVs as well, consumers in both private and public sectors would have greater opportunities to choose EVs over traditional vehicles.

The agency said the DTI and the National Economic and Development Authority have also expressed their support to the recommendation.

The DOE sees the transition to EVs as a key component to the decarbonization of the economy as envisioned by President Marcos.

While the agency expects the target of increasing to 50 percent the share of EVs in the country by 2040 as challenging, it is optimistic that it can be achieved.

Isao Sekiguchi, president for Nissan ASEAN, said the presence of EV in the Philippines is still marginal, but the market is expected to continue growing in the coming years.

“The growth of EV in ASEAN differ from country per country. We see a stronger growth of 15 to 20 percent in Thailand, Singapore, and Vietnam. For the Philippines, Indonesia, and some other markets in ASEAN, we still see a growth of five to 10 percent.  I would say five to 10 percent max in the coming years for Philippines,” Sekiguchi said.

“For the Philippines, I think it will come, but what makes the breakthrough to a certain extent is the policy. One specific policy I would say is to give incentive,’’  he said.

Sekiguchi said infrastructure, such as charging stations, would also have to be ready for EVs, to increase its penetration.

For the first quarter of 2023 alone, the DOE reported that the number of EVs sold has surpassed the total EV sales for the previous three years.

The Comprehensive Roadmap for the Electric Vehicle Industry sets a minimum 10 percent target EV share for all sectors, excluding EV trucks, by 2040 under the business-as-usual scenario.

The aggressive clean energy scenario, on the other hand, sets a more ambitious target of at least 50 percent of all fleets by 2040.