The Electric Vehicle Association of the Philippines (EVAP) lamented the delay in the implementation of the EV Incentive Strategy (EVIS), which proposed to grant a set of fiscal incentives to EV manufacturing in the country, to fully maximize the potential of the domestic industry, attract investors and develop the the domestic EV ecosystem.
EVAP President Edmund Araga to Logistics News PH on the sidelines of The 13th Philippine Electric Vehicle Summit on Wednesday, October 23, that foreign investors are just awaiting for more certainty in the incentive system for EV manufacturers and participants in the EV ecosystem under the EVIS before they cast their lots for the Philippines. The EVIS is supposed to be a major pillar for the EV Industry Development Act (EVIDA), which was passed in April 2022 yet.
“This (EVIS) is the one being awaited by EV investors to establish their plants here,” he said noting they have met prospective investors in China and other countries that expressed readiness to pour in their capital once the policy incentive system is put in place.
Incentives
The proposed fiscal incentives under EVIS include fixed incentive support (FIS) for up to 50 percent support depending on activity, on capital expenditure to manufacture, including initial expense and training costs for the start-up operation for the use thereof, excluding land.
Another incentive will also be given on production volume incentives (PVI) for up to 30 percent depending on vehicle segment. Incentive support would be given up to 2035 or until target number of units is reached.
In June this year, Trade and Industry Secretary Cristina Roque said the DTI has already approved the incentive strategy for EV manufacturing in the country and would be submitted for approval by the Fiscal Incentives Review Board. A draft executive order for Malacanang has been prepared, but Araga said there are still some kinks to be ironed out.
Since any incentive program would entail revenue loss, Araga said government should allocate a certain budget like what was provided under the Comprehensive Automotive Resurgence (CARS) program.
This he said as they got wind of discussions that DTI and the Border of Investments (BOI), which spearhead the EVIS, don’t have the budget to support the EVIS.
“If we really want to strengthen our manufacturing sector, then the DTI should have a bigger budget. I hope the government can roll it out, but I guess they have other priorities like the flood control projects,” he said.
Ecosystem
The EVIS seeks to narrow the cost gap between EVs and traditional motor vehicles and enable the shift of the local traditional motor industry to EVs. It aims to provide time-bound, targeted, performance-based and transparent fiscal and non-fiscal support in order to attract local EV and EV parts manufacturing. The incentive strategy sets local products to be achieved within 8 years. The incentive support will cover EVs, EV charging stations, EV parts and components, and EV testing facilities.
Already, analysis on the policy and economic policy has been completed as well as the industry value chain industry. There are also opportunities to explore nickel refining for EV batteries.
EVIS seeks to achieve EV production of 6.3 million units by 2040. It also sets a target of 147,000 EV charging stations under the clean energy scenario.
In a speech at the opening of the EV Summit, Araga said that estimated total investments in the local EV assembly and battery material and manufacturing have reached over PHP1 billion. But the EVIS could actually generate PHP11.4 trillion in economic output and create about 700,000 local jobs in EV assembly, battery production, EVCS installation, and maintenance services soon.
Araga has urged for coordination among government agencies to finally implement the EVIS via an executive order signed and issued by Malacanang.
Data from the Land Transportation Office showed that registration of EVs skyrocketed to 29,715 units from January to July this year, significantly higher than the 2024 figure.
“We call for the support so we can sustain our milestones and we can keep on working hand-in-hand to achieve our goals and make mobility int he Philippines, more efficient, more environmentally friendly, and more sophisticaled,” Araga concluded.
