Big, bold step for local Electric Vehicle industry

The two-day 1st Association of Southeast Asian Nations (Asean) Electric Vehicles and Hybrid Summit (June 29 and 30) at the World Trade Center has been hoped to be the “jolt” that would bring to life the country’s dormant electric vehicle (EV) industry.

For an event that generated little media chatter in the days and weeks leading to it, there was a surprisingly substantial gathering of forces from government and private sectors, including major mainstream media, local EV makers and carmakers, and representatives from Singapore, Korea, Indonesia, Malaysia, and Thailand, among others.

Together with the Philippines, the above-mentioned countries form the Asean Federation of Electric and Hybrid Vehicle Industries.

The Chamber of Automotive Manufacturers of the Philippines Inc. (Campi) displayed its members’ showpieces: Mitsubishi’s Outlander plug-in hybrid electric vehicles (PHEV) and full-electric i-Miev; Nissan’s Leaf and e-Power Note; Lexus 300h; and Toyota’s Prius PHV.

Complementing these displays were audio-video presentations and plenary displays of the rest of the chamber’s 16 members (Baic, BMW, Daewoo, Foton, Honda, Isuzu, Kia, Mazda, Mercedes-Benz, Peugeot, SsangYong, Suzuki, and Volkswagen).

Local and imported manufactured e-trikes were also displayed.

Mitsubishi Motors Corporation formally turned over five Outlander PHEV, and five i-MiEV units to the Department of Environment and Natural Resources, along with four electric vehicle quick charger units.

MMC plans to reach out to institutions including government administrations, universities, and electric companies to join the project, which aims to reduce CO2 emissions and traffic congestion in the Philippines.

Campi president Rommel Gutierrez said: “We strongly support all efforts of the government to promote the Philippines as a key player within the Asean automotive sector.”

Electric Vehicle Association of the Philippines (Evap) president Rommel T. Juan told the crowd that Evap had completed and had submitted to the Board of Investments the Philippine EV road map for the next five years.

PH EV parts

“On the technical side, there are now 49 EV parts and components covered by standards set by the Bureau of Philippine Standards, plus one standard on the dimensional limits of the electric jeepney body. Next in line is the standard for the vehicle itself, which we are now working on,” said Juan.

“To reduce our warranty costs and enable us to sell outside of Metro Manila, we have tied up with the Technical Education and Skills Development Authority (Tesda) to teach a course on EV maintenance, servicing and repairs in all the major cities in the country. This should help spread EV technology in the countryside,” added Juan.

Excise tax exemptions

On the business side, a measure that would exempt both electric and hybrid vehicles from the forthcoming excise tax is almost close to becoming a law.

Juan said: “This would help reduce our costs, which in turn we can pass on to our customers in the form of lower selling prices.”

Green retail financing

Juan said that “on the financing side, given the proof of concept, green retail financing is now beginning to become available and accessible from the major banks and financial institutions.”

He added: “Loans to finance capital expenditures of manufacturers and assemblers’ area are also now available. For so long a time, financing has been the missing link in our efforts to move sales and the industry forward.”

Juan likewise said that the government’s PUV (public utility vehicle) modernization program will soon be implemented.

This program requires jeepneys more than 15 years old to be upgraded with modern jeepney substitutes powered by either Euro 4 diesel or electric/hybrid engines.

“This will give us the volume we need to take advantage of economies of scale, and give us a captive market for at least the next six years,” said Juan.

He admitted during the June 29 press conference that there has been tremendous pressure on the Philippines for it to step-up the EV/hybrid industry, as neighboring Asean countries have achieved substantial headway in terms of government subsidies, incentives, ownership schemes, infrastructure support, and sales for EVs and hybrids.

In Malaysia, for instance, EV charging stations are being set up at 66 Petronas stations around the country.

The New Strait Times, in its March 26, 2017 issue, said that “under the National Electric Mobility Blueprint, the government aims to have 100,000 electric cars, 100,000 electric motorcycles, and 2,000 electric buses on our roads by 2020. In addition, it aims to have 125,000 charging stations to support these vehicles.”

Electric Vehicle Association of Malaysia president Tan You Soon said: “Our country started standardizing for electric motorcycles, e-bikes, electric cars, charging stations and infrastructure, because if (you) are not making standards, every vehicle in the Philippines will have a problem with charging.”

Four months ago, the Thailand government approved a series of investment perks for its EV industry.

The Bangkok Post on March 28, 2017 reported that carmakers found the promotional privileges for EVs attractive enough to draw future investment in eco-friendly vehicles.

The Thai BOI approved promotional privileges for EVs (including hybrid EVs and plug-in hybrid EVs), highlighted by tax holidays of up to eight years.

Korea, meanwhile, has offered tax discounts and free parking, among others.

The Korean government offers subsidies for battery electric vehicles (BEVs).

Local governments in Korea also offer subsidies, though these vary by locality.

Korea also offers a variety of non-monetary benefits as well, including permanent environmental improvement charge exemption for zero emission vehicles (ZEVs), special parking privileges for BEVs, exemption from congestion fees, reduced public parking fees, and lower electricity prices, according to the International Council on Green Transportation.

ICGT said that Korea announced its EV incentive program in 2011, with subsidies and tax benefits available initially in five regions, expanding to 17 regions in 2015.

The Philippines’ DTI Assistant Secretary Rafaelita M. Aldaba said that “government policy support is important for the adoption of EV in the very near future.”

She added that “Experiences across the world have shown that EV policies were keys to success in countries like Denmark, Norway and Holland.

“In Denmark, for instance, infrastructure support and incentives were crucial to the growth of the EV industry.

“In Hong Kong, tax incentives were provided. In China, it’s easy ownership, and in Korea, subsidies.

“Apart from fiscal and non-fiscal incentives, education would also be key to the success of the industry.”

Aldaba also revealed, “China is already the largest auto market in the world, and in terms of EV development, it has taken the leadership position.”

She added that in 2016, 507,000 EVs and PhEVs were sold in China, representing a 53-percent increase from 2015.

In Europe, 222,200 units were sold, corresponding to a 14 percent increase, while 107,130 units were sold in the United States, representing a 36 percent increase.

Manila Electric Company vice president Raymond Ravelo said that the company has been testing fast-charging and battery-swapping technologies to study their effects not only on vehicles, but also on the electrical grid in terms of power and system requirements.

He also disclosed that Meralco is planning to address “the projected volume growth from EVs within our franchise area.” He added that the company continues to offer the Meralco PowerLab facility “for the testing of new EV units in the market for performance, range and consumption.”