The Department of Energy’s goal of putting 100,000 electric tricycles on the road by 2017 and the Electric Vehicles Association of the Philippines’ (EVAP) goal of 1 million electric vehicles by 2020 represent key milestones toward dramatically reducing dependence on oil and ensuring that the Philippines leads in the growing electric vehicle manufacturing industry in the Asian region.

Policy support is needed to encourage investment in manufacturing facilities, enable technology demonstration and deployment and provide incentives to promote adoption and drive consumer demand for electric, hybrid and other alternative fuel vehicles. High initial costs, lack of fiscal incentives and vehicle registration and franchising issues are seen as major barriers to this emerging industry’s growth.

Although EO 226, from which the Investment Priorities Plan (IPP) derives its legal basis, grants Income Tax Holiday (ITH) for the manufacture and assembly of electric vehicles (EVs) and alternative fuel vehicles (AEVs) including charging stations for electric vehicles, and while Executive Order No. 488, grants duty free importation for components, parts and accessories for the assembly of electric, hybrid, flexible fuel (bio-ethanol and bio-diesel) and compressed natural gas motor vehicles, high capitalization requirements were often cited as the reason for inability of investors in this emerging industry from availing these incentive.

The clamor by the industry for the grant of fiscal incentives which could bring down the acquisition cost of alternative fuel vehicles through exemption from taxes and duties for the purchase and importation of raw materials, spare parts, components and capital equipment, will take some time to be acted on by government owing to the Department of Finance’s ongoing review and rationalization of fiscal incentives.

Since any form of incentives can provide additional boost needed to drive consumer demand for alternative fuel vehicles, non-fiscal incentives such as priority in registration and issuance of plate number, priority in franchise application, exemption from Unified Vehicular Volume Reduction (UVVRP) or Number-Coding Scheme and provision for free parking spaces in new establishments could help influence consumers to choose these type of vehicles.

The enactment of this bill is earnestly requested as this will provide an enabling environment to promote the mainstream use of electric, hybrid and other alternative fuel vehicles.

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