E-vehicles to fuel P10.5-B revenues, savings

MANILA, Philippines - The country stands to gain close to P10.5 billion in terms of revenue collections and savings from the use of electric vehicles (EVs) and the passage of the Alternative Fuel Vehicles (AFV) bill. 

According to the Electric Vehicle Association of the Philippines (EVAP), the widespread use of EVs and the approval of the AFV bill would bring benefits in terms of revenues and savings.

“With the income tax gain on job generation and its multiplier effect, the credits from emission reduction, reduced pollution-related health expenses and VAT (value-added tax) on sales and on additional energy demand, the country stands to gain close to P10.5 billion  as compared to only P320 million in foregone revenues from tax exemption if the AFV bill is not approved,” EVAP executive director Leonido Pulido said. 

The group estimates some 10,000 new jobs to be created in the downstream and upstream industries for the local manufacture of EVs, as well as actual operations of the EV systems.

Pulido said the new jobs would mean more disposable income and higher consumer spending, which in turn, would create more sales for the EV industry. 

The group said the multiplier effect of the generated sales of P33.49 billion of the EV industry in nine years, given a multiplier of five, is P167.46 billion. And so at one percent withholding tax, the Philippine government stands to collect about P1.67 billion.

Pulido said an estimated additional withholding tax of P689.52 million would be generated from the fourth year up to ninth year of the implementation of the AFV Incentives Act. 

“An estimated VAT of P1.57 billion is expected to be contributed to the government in nine years based on the gross revenues of P33.49 billion from sales of 100,000 e-trikes and 10,000 e-jeepneys,” he said.

The country is likewise seen to benefit in terms of reduction of dependence on fossil fuel to power the transport sector with the use of EVs.

“Assuming that 100,000 e-trikes are deployed, the dollar savings from gasoline imports alone would amount to P4.5 billion (90 million liters x P50.00/liter) or $100.41 million,” Pulido said.

The country could also earn carbon credits for emission reduction. 

“With the initial deployment of 100,000 e-trikes alone, the total avoided carbon dioxide emission is estimated to reach 355,806 tons per year. Assuming the market price of carbon credit is $10 per ton, the country stands to gain $3.56 million or P159.54 million per year,” Pulido noted.

He added that the use of EVs would bring about savings on health-related expenses.

“Even with a 10 percent penetration rate by EVs in our local transport scene, the savings brought about by the reduction in pulmonary and cardio vascular diseases and premature death is P1.79 billion,” he said. 

The AFV bill seeks to provide fiscal and non-fiscal incentives for EV manufacturers, suppliers, importers, dealers and users. 

In other countries, EV manufacturing and use enjoy incentives. 

The EVAP is pushing for the use of EVs in the country as such provide eco-friendly and efficient transport.

“Finally, public transport operators are realizing that using EVs for their vehicle fleets is not only environmentally friendly and good for the air around us, but is also much much quieter, more convenient to use, requires less maintenance and most importantly, is cheaper to operate,” EVAP president Rommel Juan said. 

“With the cost of electricity to operate it being only 40 percent of the money you spend on fuel for the same distance travelled, you cannot go wrong with an EV,” he added.