DTI wants zero tariff on e-vehicles

MANILA, Philippines — The Department of Trade and Industry (DTI) wants tariffs on electric vehicles (EVs) removed for a period of five years to help encourage demand and generate investments for the EV industry.

During the hearing conducted by the Tariff Commission on the proposed temporary lifting of most favored nation (MFN) tariff on EVs and parts and components yesterday, DTI-Board of Investments chief investment specialist Reynaldo Lignes said the DTI wants to remove the tariff on EVs, regardless if it originated from MFN or a free trade agreement partner country, for a period of five years.

“This is envisioned to drive down the purchase price of EVs, thereby generating demand and encouraging investments in charging stations and most importantly, to reduce the country’s vulnerability to heavy dependence on oil imports,” he said.

He said such a measure is seen to encourage consumers to consider EVs as a cleaner and greener transportation option.

“Furthermore, a vibrant domestic demand based on EVs could also potentially promote a host of local investments in parts manufacturing, battery manufacturing, mining and electronics industry, as well as building up a pool of human resource capabilities on EV technology,” he said.

He said the agency aims to promote local manufacturing of EVs and turn the Philippines into a regional production hub for such vehicles.

The proposed temporary removal of MFN on EVs covers battery EVs, hybrid EVs, light EVs (scooters, bicycles), and plug-in EVs, as well as parts and components such as lithium-ion accumulators, motor controllers, and AC charging stations.

The MFN rate for EVs is up to 30 percent.

Chamber of Automotive Manufacturers of the Philippines Inc.’s Jasmin Nagera said in the same event that the group supports the proposed removal of tariffs on EVs.

“We recognize this measure will be able to help in (EV) penetration and therefore, we express unequivocal support to the proposed tariff reduction by the DTI and DOE (Department of Energy),” she said.

For the Electric Vehicle Association of the Philippines (EVAP), removal of import tariff on EVs would reduce cost, but the vehicles would still remain more expensive than internal combustion engines or those running on gasoline.

EVAP also said that for electric motorcycles, these may be granted import tariff exemption but for a shorter period in order to help build demand to attract manufacturing investors in the country.

Trade Secretary Ramon Lopez earlier said the DTI was pushing for the removal of the tariff on EV imports before the end of the term of the current administration.

He said once this is in place, the impact would likely be seen towards the second half of the year.