Local makers seek tariff cuts on e-vehicle equipment, parts

MANILA, Philippines — Philippine manufacturers of electric vehicles want the government to slash tariffs on raw materials needed to make e-vehicles to support the industry in boosting its local production.

Electric Vehicle Association of the Philippines (EVAP) president Edmund Araga yesterday asked the government to consider cutting, if not totally  eliminating, the import duties imposed on components and parts required to produce e-vehicles.

Araga said local makers are suffering from increased cost of production amid the fall of the peso against the US dollar.

“The primary struggle right now is that the value of the dollar is way too high, making it difficult for us to import after the peso’s baseline of 50 to $1 became 59 to $1. Nobody from our industry anticipated that it would hit that level and we don’t want to raise prices outright because it would be challenging to sell the units,” Araga said.

“For us to increase our production of e-vehicles, we just have to win one situation. That is to get a zero tariff to level off the playing field,” he said.

Araga said it is the perfect time to mainstream electric vehicles in the market, especially as fuel prices keep on going up on supply constraints caused by the war in Ukraine.

The EVAP chief said that local manufacturers are expanding their source networks in East Asia, particularly China and South Korea, in case they need to ramp up output.

“We plan to source out raw materials using our networks in South Korea, not only in China. This would be a way for us to break into manufacturing. If we have partnerships with foreign sources, we can start from there and then we can leap on later,” Araga said.

Based on records, there are at least 19,936 e-vehicles registered with the Land Transportation Office as of 2021. For 2022, Araga said more than 1,000 e-vehicles were sold in the Philippines in the eight months to August, already beating the 843 sold in 2021 and nearly 400 purchased in 2020.

Likewise, EVAP sees an opportunity in upgrading public utility jeepneys (PUJs), as mandated by the government. Under the PUV Modernization Program, the government eyes to convert PUJs into fuel efficient units, but is lagging behind the transition on budget constraints.

As of 2020, the government has modernized around 18,000 PUJs, leaving behind close to 180,000 units waiting to be upgraded.

Former president Rodrigo Duterte in April approved Republic Act 11697 or the Electric Vehicle Industry Development Act, mandating government and corporate offices to allocate at least five percent of their fleets for e-vehicles.