EconomyForex

Laying the groundwork for an emerging EV industry

3 Mins read

The mainstream adoption of electric vehicles (EVs), once seen as a dream akin to science fiction, could possibly be in the Philippines’ near future.

Among President Rodrigo R. Duterte’s final undertakings as the country’s chief executive is the approval of Republic Act No. 11697, or the Electric Vehicle Industry Development Act (EVIDA), a law aiming to regulate and develop the Philippines’ electric vehicle (EV) industry. The measure outlines the regulatory framework for the manufacturing and adoption of EVs, and includes quotas for their adoption by various industries such as cargo logistics, food delivery companies, tour agencies, and utilities providers.

According to the Palace, the main goal of the policy is to promote the industry as a “feasible mode of transportation to reduce dependence on fossil fuels.” The administration adds that the law governs “the manufacture, assembly, importation, construction, installation, maintenance, trade and utilization, research and development, and regulation of electric vehicles.”

The roadmap will feature an annual work plan to “accelerate the development, commercialization, and utilization of EVs” and recognizes preferential parking slots for EVs and charging stations in dedicated spaces as key to their adoption. In fact, the law stipulates that establishments with 20 or more designated parking slots should dedicate 5% of their space for the use of EVs and provide charging points.

The law also sets manufacturing standards for “EVs, batteries, and facilities, including recycling facilities, parts and components, and charging stations and related equipment”, to be overseen by the Department of Energy, which will also lead the EV adoption campaign.

EVIDA has breathed new life into an industry that has long been fighting for more mainstream attention. As the law provides for the creation of a Comprehensive Roadmap for the Electric Vehicle Industry, it will create a concrete the development plan for the EV industry en route to widespread commercialization of the technology.

The law has also put into the spotlight other measures to push for EV adoption in the Philippines, such as the Department of Trade and Industry’s (DTI) proposal for a zero-tariff for EV imports against the current 30% tariff.

The Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) said the proposal to suspend tariffs is consistent with EVIDA and will support overall EV adoption.

“CAMPI supports all EV technologies including hybrid electric vehicles (HEV), plug-in hybrid electric vehicles (PHEV) and battery electric vehicles (BEV). All these have potential for fuel consumption reduction and vehicle emission mitigation in the mid- to long-term,” CAMPI President Rommel R. Gutierrez said in a statement.

“The scope of the proposal is consistent with the definition of EVs under EVIDA, which includes HEVs, PHEVs, BEVs and light electric vehicles,” it said.

The group shared further insight into the adoption of EVs in the private vehicle market, saying that EV adoption is growing as its members begin to offer original equipment manufacturer EVs.

“Private vehicles accounted for approximately 94% of the total vehicle fleet (excluding trailers and motorcycles) in 2021. In terms of fleet size, there is no doubt that electrification of private transportation will substantially reduce fuel consumption and vehicle emissions,” CAMPI said.

“While there are many factors affecting the wide-spread adoption of EVs, the group is optimistic that EVIDA measures and the 0% tariff proposal put the automotive industry in the right direction in terms of vehicle electrification,” it added.

Another benefit of EVIDA is that it will create investor interest in the country, especially in the technology sector, as it revs up manufacturing capacities.

“With EVIDA, the Philippines is now in a stronger position to further attract tech investment and create high-value jobs by taking advantage of the ongoing global shift to electric vehicles (EVs),” Trade Secretary Ramon M. Lopez said in a statement.

“This measure (is) a move towards lessening direct usage of oil products in transport, thus, signifying reduced air and noise pollution in urban areas. This will also reduce the transportation sector’s direct dependence on oil, especially amidst rising fuel prices affecting both businesses and consumers,” he added.

EVIDA directs the Board of Investments to create an EV Incentive Strategy (EVIS) that will provide fiscal and non-fiscal inducements to reduce the production cost gap between EVs and traditional vehicles. According to Trade Undersecretary Rafaelita M. Aldaba, the law will be critical in the context of rising competition in the ASEAN region to attract EV investment.

“The EVIS will allow the government to provide competitive and industry-specific fiscal and non-fiscal support to attract private sector investments in strategic EV segments, especially manufacturing, which is a crucial step in deepening our participation in the regional automotive value chain,” Ms. Aldaba said.

DTI said that EVIDA will serve as a blueprint for a comprehensive and coordinated policy direction among national government agencies in terms of promoting EV to ensure investors’ confidence and attract EV-related investments, as well as positioning the country to reap the benefits of investing in the emerging global EV industry.

“EVIDA aims to promote innovation in the field of clean energy and sustainable transportation while developing a sunrise industry in the country and generating more employment,” DTI said. — Bjorn Biel M. Beltran

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