By Erika Mae P. Sinaking, Reporter
PRESIDENT Ferdinand R. Marcos, Jr. has approved an incentive program to attract investments in the local manufacture of electric vehicles (EV) and their components, as part of the government’s push to boost the country’s role in the regional EV supply chain.
Executive Order (EO) No. 121 aims to narrow the cost gap between EVs and conventional vehicles, set domestic production targets over the next eight years and encourage major auto manufacturers to establish operations in the Philippines, Malacañang said on Thursday.
The Electric Vehicle Incentive Strategy (EVIS) program offers “time-bound, targeted, performance-based and transparent” fiscal incentives to manufacturers of battery electric and hybrid passenger cars, commercial vehicles, as well as their parts and components.
“There is a need to implement the EVIS program to enable the country’s EV industry to seize market opportunities arising from the global transition to electric mobility, deepen its participation in the regional supply chain, strengthen the country’s manufacturing base, and contribute to sustainable economic growth and the attainment of the State’s energy security and environmental objectives,” the order stated.
Palace Press Officer Clarissa A. Castro said the EVIS program will encourage major automakers to establish EV manufacturing facilities in the Philippines.
“When they invest and manufacture vehicles here, more jobs will be created for Filipinos, from engineers and technicians to factory workers, logistics providers and local suppliers,” she told reporters in Filipino.
MITSUBISHI INVESTMENT
Mitsubishi Motors Philippines Corp. (MMPC) said on Thursday it will participate in the EVIS program through its parent company’s P7-billion investment to produce hybrid EVs in the Philippines.
“Backed by Mitsubishi Motors Corporation’s P7-billion investment commitment, we are ready to support the government’s vision through the local production of hybrid electric vehicles, further enhancing the country’s manufacturing capabilities and competitiveness,” MMPC Chairman Noriaki Hirakata said in a statement.
MMPC said it will support the expansion of local EV manufacturing capabilities and the development of the automotive supply chain in the Philippines.
“Through this investment, we look forward to creating greater value for the Philippine economy, supporting the country’s sustainability objectives, generating opportunities across the automotive ecosystem, and contributing to the continued growth of local vehicle manufacturing,” Mr. Hirakata said.
China Bank Capital Corp. Managing Director Juan Paolo E. Colet said the new order is a positive step toward promoting EV manufacturing in the Philippines.
“While fiscal incentives are important, the government must also address other factors that influence investment decisions across the automotive value chain. These include competitive energy costs, the availability of high-quality industrial estates, access to skilled labor, efficient port and transport infrastructure, and a more supportive regulatory environment,” he told BusinessWorld in a Viber chat.
INCENTIVES
Qualified manufacturers may register up to two EV models under the EVIS program.
To qualify, companies must undertake new investments, invest at least P5 billion in capital, satisfy production targets and introduce locally manufactured EV models within three years from registration.
Registered participants may receive fixed investment support (FIS) equivalent to the applicable percentage of total capital expenditure used for tooling, equipment, research and development cost to manufacture the EV model.
For the domestic manufacture or assembly of EVs as well as parts and components, the FIS is equivalent to 40% of capital expenditure for battery EVs and 30% for hybrid EVs, plug-in hybrid EVs and fuel cell EVs.
Participants may also get a production volume incentive (PVI) of up to 12% of the ex-factory unit price but not exceeding P200,000 per unit for domestically manufactured or assembled EVs. However, this is tied to a minimum planned production of 10,000 EV units.
The participants will be entitled to the FSI and PVI for a maximum of 10 years from the start of production of the enrolled EV models.
Under the EO, total fiscal support for the EVIS will be capped at P60 billion, with up to P15 billion allocated for each enrolled EV model.
Instead of cash grants, registered participants will receive tax payment certificates.
The Department of Trade and Industry, through the Board of Investments, will oversee implementation of the EVIS program in coordination with the Fiscal Incentives Review Board.
Companies that fail to introduce locally manufactured EV models or components within three years of registration may face cancellation of their registration, monetary fines, or the refund of fiscal incentives.
