Stakeholder welcomes tax breaks to e-motorcycles

The Electric Vehicle Association of the Philippines welcomed Monday the decision of the National Economic Development Authority (NEDA) Board, chaired by President Ferdinand Marcos Jr., to grant tax breaks to two-wheeled electric vehicles.

"Appreciate on the expansion of EO 12 (Executive Order 12) covering the two wheels," Edmund Araga, EVAP president, said in a text message.

The NEDA Board, during its 16th meeting on May 15, approved the recommendations of the Committee on Tariff and Related Matters (CTRM) following the mandatory review of Executive Order (EO) No. 12 (s. 2023).

The agency said the NEDA Board has agreed to maintain the Most Favored Nation (MFN) rate at zero until 2028 on 34 tariff lines of battery electric vehicles currently covered under EO 12. 

“It has also decided to expand the list of articles with reduced duty to include e-motorcycles and e-bicycles, and nickel metal hydride accumulators, and reduce the duty on these articles to zero until 2028,” the NEDA said.

The expansion in the coverage of EO 12 also includes other types of EVs, particularly battery e-tricycles and quadricycles; battery, hybrid EV (HEV) and plug-in hybrid EV (PHEV) jeepneys/buses; and HEV and PHEV cars and trucks; as well as completely knocked down (CKD) EVs for all types of vehicles. 

The tariffs on these articles shall be reduced to zero until 2028, according to the NEDA.

Araga, however, was not in favor of the inclusion of hybrid electric vehicles.

"It defeats its purpose on prioritizing battery EVs and PHEVs in competing with ICE (internal combustion engine) in terms of cost and proliferation of EV industry infrastructure," he said.

He added it is not fair to say that consumers will be more convinced to switch to electric in using hybrid EVs "as it may just lead to consume barrels of fuels being imported by the government and that awareness in using combustion engine is still on top of their mind in buying their next vehicle."

NEDA Secretary Arsenio Balisacan earlier said EO 12 is designed to stimulate the electric vehicle (EV) market in the country, support the transition to emerging technologies, reduce our transport system’s reliance on fossil fuels, and reduce greenhouse gas emissions attributed to road transport.

“By encouraging consumers to adopt EVs, we are promoting a cleaner, more resilient, and more environmentally friendly transportation alternative,” he added.

Since EO 12 took effect in February 2023, EV industry leaders have been campaigning for the inclusion of e-motorcycles

Under EO12's initial version, only e-motorcycles are still subject to a 30% import tax, while other types of EVs got reduced or removed from tariff rates.

EO12 was enacted to complement the Electric Vehicle Industry Development Act (EVIDA) to create an industry for EVs in the country and help reduce carbon emissions, in compliance with the Philippines' commitment to the Paris Agreement. It modifies the tariff rates for EVs to help mainstream their use among Filipinos.—AOL, GMA Integrated News