October 22, 2020

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Philippine policies, infrastructure must be ready for e-vehicles

Senator Win Gatchalian recently said that the government needs to be ready with its policies and infrastructure before electric vehicles (EVs) become more affordable and popular in the country.

The Senator, who chairs the Senate Committee on Energy, is pushing for the creation of sound policy and regulatory framework for the adoption of EVs and the sustainability of the EV ecosystem.

Citing the 2019 data of the Bloomberg New Energy Finance, it was forecast that the cost of EVs could reach parity with traditional internal combustion engine (ICE) vehicles by 2024 as batteries become much cheaper.

As such, the government must have the right policies, infrastructure, and incentives so it can roll out the EVs in a big way, as the country moves toward the promotion of sustainable transportation in a post-COVID-19 world.

According to the lawmaker, Senate Bill 1382 or the Electric Vehicles and Charging Station Act, which he authored and sponsored, supports the transition to new technologies, aims to generate jobs, and attract investments to grow globally competitive.

While the COVID-19 crisis shows that effective public transport is vital to keeping cities running and quarantine measures have put a strain on the country’s public transport system, over the long term, public transport is an investment that can create jobs, reduce carbon emissions, and innovate people’s access to their workplaces.

The bill is now up for interpellation in the Senate. Once the bill becomes a law and if implemented correctly, the Senator expresses confidence that the country’s dependence on oil will be greatly reduced and that the country will save PH₱ 297.92 billion (around US$ 6.7 billion) of annual oil importation.

The bill provides fiscal and non-fiscal incentives for the importation, utilisation, and manufacture of EVs. This includes a 9-year exemption from value-added tax, customs duties, and discounts on the Motor Vehicle User’s Charge as well as expedited registration procedures for EV users.

According to the 2018 Philippine Statistical Yearbook, the country imports 96.84% of crude oil. At least 74% of the country’s crude oil import comes from the Middle East, making the country more vulnerable to supply and pricing disruptions.

Senator Gatchalian is also sponsoring the measure to further promote and adopt EVs in the country, which he says will help reduce Philippine greenhouse gas (GHG) emissions and foster greater energy independence. He pointed out that the transport sector is the second biggest GHG contributor in the country with 31.6%, citing the 2017 DOE data.

In July, the Department of Trade and Industry proposed a PH₱ 83 billion (US$ 1.6 billion) incentive package to support the local manufacturing of EVs.

According to a news report, support to the e-vehicle subsector would come in the form of production assistance and consumer subsidy.

The objective is to provide time-bound, targeted, performance-based perks and transparent fiscal and non-fiscal support in order to attract EV and EV parts manufacturing, particularly electronic parts and other strategic components, batteries, charging stations and the establishment of testing facilities in terms of the production support.

The Philippines is expected to have a stock of 36 million units of motor vehicles by 2030 and 6.6 million of these would be EVs. At least half of the projected inventory of EV will be locally-manufactured.

The government is targeting to manufacture 100% adoption rate for PUVs, trucks and three-wheelers, 50% for e-buses and two-wheelers, 23% for UVs other than PUVs and 3% for passenger cars.

The sales of plug-in hybrid EVs are still small in the Philippines, with only 54 manufacturers and importers, 19 charging stations, 11 parts manufacturers, and 18 dealers and traders. The industry employs 71,840 workers, both direct and indirect.