Tax Breaks on E-Motorcycles Welcomed by Stakeholders in the Philippines

Introduction: A Milestone for Electric Mobility

The Electric Vehicle Association of the Philippines (EVAP) has expressed its approval of the National Economic Development Authority (NEDA) Board’s decision to grant tax breaks to two-wheeled electric vehicles. This move, supported by President Ferdinand Marcos Jr., aims to accelerate the adoption of electric vehicles (EVs) in the country, reflecting a significant step towards a cleaner, more sustainable transportation system.

Expansion of Executive Order 12

During its 16th meeting on May 15, the NEDA Board approved recommendations from the Committee on Tariff and Related Matters (CTRM), following a mandatory review of Executive Order (EO) No. 12 (s. 2023). This review resulted in the extension of zero tariffs on 34 battery electric vehicle tariff lines until 2028. Additionally, the list of articles with reduced duty was expanded to include e-motorcycles, e-bicycles, and nickel metal hydride accumulators, all of which will benefit from zero duties until 2028.

Stakeholder Reactions

Edmund Araga, president of EVAP, praised the inclusion of two-wheeled electric vehicles under EO 12. He highlighted the importance of this expansion for promoting electric mobility in the Philippines, noting the positive impact on the EV industry’s growth and infrastructure development.

A Broader Scope for EO 12

The revised EO 12 now encompasses a wider range of EVs, including battery e-tricycles, quadricycles, hybrid EV (HEV) and plug-in hybrid EV (PHEV) jeepneys/buses, and HEV and PHEV cars and trucks. Completely knocked down (CKD) EVs for all vehicle types also benefit from the zero tariff rate until 2028.

Concerns Over Hybrid Electric Vehicles

Despite the overall positive reception, Araga voiced concerns about the inclusion of hybrid electric vehicles (HEVs) in the tax breaks. He argued that this inclusion might undermine the focus on battery EVs and PHEVs by allowing HEVs to compete in terms of cost and infrastructure development. Araga stressed that promoting battery EVs and PHEVs should remain a priority to reduce reliance on internal combustion engines (ICEs) and fossil fuels.

Government Support for the EV Transition

NEDA Secretary Arsenio Balisacan emphasized that EO 12 is designed to boost the electric vehicle market in the Philippines. The aim is to support the transition to new technologies, reduce dependence on fossil fuels, and cut greenhouse gas emissions from road transport. Balisacan highlighted that encouraging the adoption of EVs would contribute to a cleaner and more resilient transportation system.

Industry Campaigns and Legislative Background

Since the enactment of EO 12 in February 2023, industry leaders have actively campaigned for the inclusion of e-motorcycles in the list of vehicles benefiting from tariff reductions. Initially, e-motorcycles were subject to a 30% import tax, while other EV types enjoyed reduced or zero tariffs. EO 12 was introduced to complement the Electric Vehicle Industry Development Act (EVIDA), aiming to establish a robust EV industry in the Philippines and support the country’s commitment to the Paris Agreement on climate change.

Conclusion: A Step Forward for Sustainable Transport

The decision to extend tax breaks to e-motorcycles and other EV types marks a significant advancement in the Philippines’ efforts to promote sustainable transportation. While challenges remain, particularly concerning the inclusion of HEVs, the overall direction set by EO 12 is a positive move towards reducing carbon emissions and fostering the growth of the electric vehicle industry.