Bill seeks to include two-wheeled EVs in tariff exemption

MANILA, Philippines – A bill has been filed in Congress aiming to exempt two-wheeled electric vehicles (EVs) from certain import tariffs.

If passed, House Bill 9574 will amend certain provisions of the Electric Vehicle Industry Development Act (EVIDA), which currently still subjects two-wheeled EVs to such tariffs.

Enacted in July last year, EVIDA is a law aimed at promoting and accelerating the development, manufacturing, utilization and commercialization of EVs in the country. It recognizes the importance of EVs in reducing dependence on fossil fuels, mitigating climate change, and promoting sustainable transportation options.

Party-List Rep. Margarita Nograles, who filed House Bill 9574, explained that the current tariff structure imposes higher upfront costs on two-wheeled EVs, making them less economically attractive to consumers compared to conventional gasoline-powered two-wheelers. This is despite their huge share vis-à-vis four-wheeled versions in the market.

"This situation creates a significant barrier to the growth of the electric vehicle industry, impeding environmental sustainability efforts and hindering the transition to clean transportation," Nograles said.

The lawmaker’s proposed amendment to EVIDA Act aims to achieve the following objectives.

First is the temporary decrease of the Most Favored Nation (MFN) tariff rates. The amendment pursues to introduction of a temporary reduction in the MFN tariff rates for all electric vehicles. Lowering the tariff burden enhances the affordability and competitiveness of electric vehicles, more particularly two-wheelers, making them a more attractive option for consumers. The temporary nature of this reduction recognizes the need to provide immediate support to the industry while allowing for a reassessment of tariff rates in the future.

Second is the call for a 0% MFN tariff rate. In addition to the temporary reduction, the amendment proposes the demand for a zero percent MFN tariff rate on two-wheeled electric vehicles for the next five years. 

"This striving measure aims to eradicate tariff-related barriers entirely, signaling a strong commitment to promoting the growth of the electric vehicle market. By demanding a 0% MFN tariff rate, the amendment aligns with global efforts to incentivize the adoption of clean and sustainable transportation,” Nograles explained.

Nograles added that the proposed amendment aims to briefly reduce tariff rates, and demands a 0% MFN tariff rate for two-wheeled EVs.

It would also yield several significant benefits, including affecting market stimulus and industry growth. Lower tariff rates and a 0% MFN tariff rate incentivize consumers to choose electric two-wheelers over conventional vehicles, leading to increased market demand. 

This, in turn, stimulates investment in the EV industry, promotes the establishment of manufacturing facilities that will create employment opportunities, and drives technological advancements.

The amendment also promotes environmental sustainability, as the accelerated adoption of two-wheeled EVs contribute to a reduction in greenhouse gas emissions.