DTI seeks removal of tariffs on imported electric vehicles

The Department of Trade and Industry asked the Tariff Commission for the removal of tariffs on electric vehicles, regardless of the source, for a period of five years in line with the government’s promotion of cleaner engines.

Economic managers earlier cited the need to promote electric vehicles as a way of mitigating the impact of the Russia-Ukraine crisis on the transport sector.

DTI officials said in a public hearing conducted by the TC on Friday the tariff suspension for the next five years would support the accelerated adoption of electric vehicles as a viable mode of transportation to reduce consumption of oil.

The Department of Energy, which has a similar petition submitted to the National Economic Development Authority, also said the temporary removal of tariff rates on EVs would provide energy security, consistent with the Philippine Energy Plan 2020 to 2040 which provides the direction for 10-percent penetration rate of EVs in the road transport sector.

The move will also reduce the country’s dependence on imported fuel for the transportation sector and support the transition to emerging technologies, according to DOE officials.

Energy officials said the suspension of tariffs would expand market sources, foster extended growth of the domestic EV industry and encourage consumers to consider acquiring EV over conventional vehicles.

Data showed that as of February 2022, there were 13 models of EV battery, 22 models of hybrid EV and six models of of plug-in hybrid EVs available in the country.

Based on market prices, the cost of acquiring an EV can range from P1.6 million to P9.49 million. The price of EV trucks range from P3.7 million to P15.8 million, while light kick e-scooters and e-bikes are priced between P7,000 and P48,000 per unit.

Prices of e-scooters and e-motorbikes range from P20,000 to P125,000.

Japan was the leading supplier of completely built-up EVs from 2019 to 2021, accouting for 74 percent of total imports. It was followed by China with 25 percent and the rest from Thailand, Singapore, Taiwan, United States, South Korea and Europe.

Data also showed that imports of lithium-ion batteries for EVs increased sharply from 22 units in 2019 to 6,762 units in 2020, but declined by 10 percent to 6,084 inits in 2021.

Majority of lithium-ion batteries, or about 98 percent, were sourced from China, and the rest from Hong Kong, South Korea, Japan, Taiwan, Indonesia and Singapore.

The Tariff Commission called for position papers and feedbacks from groups, agencies and /or individuals on EV tariff reduction, not later than May 16, 2022.