ELECTRIC VEHICLE (EV) investments need to be made with an eye towards the US market, where automakers must weigh the benefits on offer from the US Inflation Reduction Act, which the Philippines also needs to consider when developing its own industry, a US Chamber of Commerce (USCC) official said.
“In the US, there is a question of compatibility with the Inflation Reduction Act (IRA) and whether EV batteries or other related products would qualify for benefits under the IRA… because that will determine whether or not those products are going to be competitive in the US market,” John Patrick Goyer, executive director for Southeast Asia for the USCC, told BusinessWorld.
The IRA provides tax credits or incentives for the purchase of new and used clean vehicles and associated EV charging equipment.
While more US investment in the Philippines is possible, “it is going to depend on what those incentives look like and on the condition of the market,” Mr. Goyer said.
The Department of Trade and Industry (DTI) is pushing for more incentives for EV manufacturers and customers to attract US and South Korean carmakers.
Joseph Um, president of Korean Chamber of Commerce of the Philippines, told reporters last week that the EV market will open up with more incentives, particularly in light of the underdeveloped charging infrastructure.
“Korea is quite advanced in EVs. However, the challenge is the lack of charging stations and infrastructure in the Philippines, because I think EVs are only available in Metro Manila as of now.”
The DTI launched the Electric Vehicle Incentives Scheme (EVIS) in October, with a target of 4 million domestically manufactured EVs in the next 10 years.
EVIS addresses both suppliers, in the form of fiscal incentives under the Corporate Recovery and Tax Incentives for Enterprises Law, and EV users via a consumer subsidy program.
The government will offer EV buyers rebates or discounts valued at P10,000 to P500,000.
Aside from the EVIS, the Philippines also issued Executive Order 12, which modified the rates of import duty on electric vehicles, parts, and components under the Customs Modernization and Tariff Act. The order reduced tariff rates on completely built-up EV units to zero for five years.
Fiscal, non-fiscal, and financial incentives for both EV users and manufacturers are also authorized by the Electric Vehicle Industry Development Act. — Justine Irish D. Tabile