Integrated Micro-Electronics Inc., a unit of AC Industries Inc. of Ayala Corp., signed Monday a $250-million cooperation agreement with US firm Zero Motorcycles for the assembly of electric motorcycles and manufacturing of electric batteries in the Philippines.
AC Industrial Technology Inc. chairman Jaime Augusto Zobel de Ayala and Zero Motorcycles chief executive Sam Paschel signed the agreement in a meeting on the first day of President Ferdinand Marcos Jr.’s state visit to the US on May 1.
Department of Trade and Industry Secretary Alfredo Pascual said the partnership between IMI and Zero is a testament to the expertise and capabilities of the Philippine manufacturing sector.
“We thank Zero Motorcycles for their trust. This is considered a historic agreement because it is a pioneering activity involving high-end electric batteries, motors and motorcycle assembly. With this investment, we will be better positioned as an export manufacturing hub for electric batteries and vehicles in the region,” said Pascual who witnessed the signing of the agreement together with President Marcos.
Zero Motorcycles agreed to subcontract its manufacturing operations such as electric motorcycle assembly and other related sub-assemblies and battery and motor assembly to IMI. The agreement projects an annual revenue of $65 million and is expected to generate over 200 new jobs for Filipinos in the high-performance motorcycle manufacturing.
IMI will assemble Zero’s electric motorcycle models in conjunction with the manufacturing facilities of Zero in California.
“We look forward to such amazing collaboration to help bring their innovative electric motorcycles to the world. This partnership aligns with our commitment to supporting companies in their growth and sustainability efforts while providing high-quality manufacturing services,” said IMI chief executive Arthur Tan.
The IMI-Zero facility in Laguna will assemble full electric motorcycles for Zero’s Europe, Asia and other markets, while supporting US demands for sub-assemblies. Zero’s electric motorcycles will be made available in 2024 through AC Industrials.
IMI’s headquarters are located in Biñan, Laguna where it operates as an original equipment manufacturer in diversified sectors that include automotive, industrial, medical, telecommunications infrastructure, storage devices and consumer electronics.
Both companies agreed to export about 18,000 units of e-motorcycles yearly. Manufacturing operations are expected to start this year.
ZERO said it is globalizing its manufacturing business, and the Philippines is clearly on its radar for expansion.
The activity is also seen to support the Philippines’ development of its electric vehicle ecosystem.
Under the Electric Vehicle Industry Development Act, the government, through the Board of Investments, aims to narrow the cost gap between traditional vehicles and EVs to increase market demand.
The law provides for the creation of the Electric Vehicle Incentive Strategy that will provide more incentives for EV-related investments to help establish an enabling environment for the sector.