EV manufacturing to get P9-B tax perks under CARS (Sabong News)

Trade and Industry Secretary Ramon M. Lopez said an executive order (EO) is being prepared to extend the P9-billion worth of tax incentives to the electric vehicle (EV) manufacturing sector. In a speech at the launch of SM Supermalls’ e-charging station, Lopez vowed to work on the signing of the EO before the end of the Duterte administration on June 30 this year. The incentive package is part of the Comprehensive Automotive Resurgence Strategy (CARS) program of the Board of Investments (BOI). The CARS program allots P9-billion maximum incentives to each of the three program participants that can produce 200,000 units each of their enrolled car model over a six-year period. The third slot is still vacant since the program has only attracted two participants – Mitsubishi Motors Philippines and Toyota Motor Philippines. “The third one we can allocate to the third participant in the CARS,” said Lopez. . According to Lopez, the draft EO would be presented to the President. “Hopefully, it can be passed by the President in this administration,” he added. Aside from the CARS program, the government is really bent on developing the EV manufacturing industry, which is now listed in the Strategic Investment Priority Plan (SIPP) to ensure that EV projects, including EV infrastructure will receive government support. Industries in the SIPP can avail of fiscal incentives of 4 to 7 years of income tax holiday (ITH) for manufacturers, and even a special corporate income tax after the ITH. He said the tax incentives will encourage the infrastructure of EVs as well as the development of the vehicle itself. With the enactment of the E-Vehicles Act, imported EVs will have zero tariff from 30 percent. Liberalized importation of EVs will be allowed initially to create a scale for EV manufacturing in the country and encourage businesses to invest in EV infrastructure, including EV charging stations. “So obviously, we just have to prepare first the infrastructure,” said Lopez as he thanked the SM Group for its initiative to set up EV charging station initially on three SM Supermalls for private vehicles. An EV charging station may entail P1 million to P2 million investment. . He said that once a scale in EV sales is achieved, SM would be encouraged to build more charging stations and that two charging stations per SM branch may not suffice. “You really have to scale that up and I’m sure you have that in your plans,” he said. Lopez vowed that government will work on EV Act’s implementation. The tariff reduction is undergoing the process for hearings by the Tariff Commission so that the zero tariff can take effect. Once done, he said, the tariff rate will pass and approved by the Committee on Tariff and Trade Related Matters before the end of Duterte’s term. Complementing the EV Act is the development of the local minerals, such as nickel, cobalt copper, industry, for the production of batteries. These projects are likewise listed in the IPP to encourage more manufacturers. Last week, he reported of US firms interested to invest in nickel zinc batteries manufacturing in the country using local minerals. Also demand for clean energy is growing to support the RE needs of data centers and hyperscalers, which require the use of RE only. With that Lopez has been pushing for 100 percent foreign equity in RE projects from 40 percent to encourage more players. For his part, SM Supermalls President Steven Tan said their initial e-charging stations are located in Mega Mall, North Edsa, MOA and Aura. Tan said that within the next few months more EV charging stations are coming up especially in destination malls like Clark, Baguio, Pampanga, even Tuguegaro,all the way down to Bicol. “This is actually a form of service to encourage people to shift to electric vehicle more and more and this is part of SM green movement initiative not just for our malls, but also for our customers,” he said. As a matter of fact, he said, SM Prime, the builder of SM Malls, has committed of 50 percent clean renewable energy by the end of the year. “50 percent of our energy consumption will come from clean energy source,” said Tan.