E-bike inclusion in EV tax incentives receives no objection

Views and position papers from government agencies and EV industry stakeholders for the revision of Executive Order 12 offered no objection to the inclusion of e-motorcycles in the tax incentives.

This comes as the Tariff Commission formally started the revision of EO12 series of 2023 during a public hearing last Wednesday in which stakeholders from different industries attended and gave their recommendations and findings to the commission.

Under EO12’s current version, different types of EVs got tax breaks, while e-motorcycles are still subject to a 30 percent tariff rate, which drew the ire of different stakeholders, noting the 'unfair' treatment that these modes of transport received.

EO12's revision is mandated a year after it took effect, and the Tariff Commission and the National Economic Development Agency will lead its review and public hearings before submitting their recommendations to the Office of the President.

The Department of Energy said that giving tax breaks to e-motorcycles is not only an efficient way to travel in terms of power consumption but is also aligned with the country’s goal to electrify its transport system to help cut down on carbon emissions.

“This proposed coverage expansion will send a clear price signal for consumers to switch to EVs, which are more efficient and cheaper to run per kilometer and assist in energy self-sufficiency,” DoE Utilization Management Bureau Supervising Science Research Specialist Andre Reyes said during the public hearing.

Meantime, Chamber of Automotive Manufacturers of the Philippines, Inc. representative Jasmin Nagera stressed that expanding EO12 to e-motorcycles will help expand the EV pool in the country.

Motorcycles hold the majority of numbers among motorists in the country, with around 8 million registered units, according to the Statista Research Department.

“We also agree with the DoE that if we are looking at the targets, we are way, way behind. So the more that we can do to maximize the potential of all these EV technologies, we really think that the government should take advantage,” Nagera said.

Meanwhile, Electric Kick Scooter Philippines revealed in its position paper that extending tax incentives to two-wheeled electric vehicles (e-motorcycles) is a crucial step to achieve a cleaner and more sustainable transportation sector.

Previously, Electric Vehicle Association of the Philippines has joined calls for the inclusion of electric motorcycles in the import tax breaks, saying such vehicles could be a “game changer”.

During the public hearing, EVAP emphasized that the tax incentives for certain electric vehicles should be for a limited time. It added that there should be an industry created for local manufacturing of EVs in the future.

The Department of Trade and Industry’s Board of Investment, on the other hand, said that the body supports giving tax breaks to e-motorcycles but also wishes to address the issues surrounding them.

EO12 was enacted to complement the Electric Vehicle Industry Development Act to create an industry for EVs in the country and help reduce carbon emissions, in compliance with the Philippines' commitment to the Paris Agreement. It modifies the tariff rates for EVs to help mainstream their use among Filipinos.

DTI plans to phase out internal engine combustion cars as part of a comprehensive plan to transition the nation to what environmentalists call "green traffic," or a decarbonized road network. The country wants to be entirely electric by 2040.