Politics

Gov’t told to help quicken adoption of electric vehicles

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By Kyle Aristophere T. Atienza, Reporter

THE GOVERNMENT should help fast-track the adoption of electric vehicles (EV) in the Philippines by offering subsidies and tax breaks to users, analysts said at the weekend.

“Tax credits on income or value-added tax payments may be explored for purchasers of both new and used models to expedite EV adoption at all price levels,” Terry L. Ridon, a public investment analyst, said in a Facebook Messenger chat.

“The purpose of the subsidies is clear — to expedite EV adoption and contribute to reducing emissions in the long-term,” he added, noting that the government should prioritize making them more affordable.

“EVs can only truly contribute to the fight against climate change if the entire passenger car market shifts to EVs, and not limited to affluent car buyers only,” he said, adding that electric car prices should not be far from their gas-powered counterparts.

Earlier this year, former President Rodrigo R. Duterte signed a law that seeks to accelerate the shift to e-vehicles by requiring operators to use electric cars for at least 5% of their fleet.

Global leaders have been considering a shift to EVs as a solution to climate change, despite claims that battery-powered cars are bad for the environment.

In the US, there’s a push to give buyers of second-hand units tax credits, according to a report by the New York Times. Electric vehicles remain expensive for most Americans.

High prices are caused by shortages of batteries, raw materials such as lithium and semiconductor components, it said, noting that strong demand from rich buyers “means that carmakers have little incentive to sell cheaper models.”

For low- and middle-income people who don’t have their own garages or driveways, another obstacle is the lack of enough public facilities to recharge.

Mr. Ridon said the country needs more charging stations to make e-vehicles more appealing to consumers.

EVs would only become viable alternatives to combustion cars if they become more available and affordable and if the charging station infrastructure can be rolled out faster, he said.

The state can participate as a joint venture partner for these charging stations or allow government financial institutions to finance these together with the private sector, he added.

Electric cars would not significantly cut greenhouse gas emissions if charging stations rely on dirty energy, said George T. Barcelon, president of the Philippine Chamber of Commerce and Industry. 

Renewable energy for EV charging is critical, he said by telephone, adding that it would eliminate the strain on the national grid.

Transport expert Rene S. Santiago said the government should focus more on fast-tracking EV adoption in the public transport sector.

“It’s easier to put up charging stations at terminals and public routes than in private or commercial establishments,” he said by telephone.

Mr. Santiago said the focus on private vehicles has undermined the opportunity to transform public transportation, which could also ease traffic.

“Why do car owners deserve special treatment?” he asked. “Rolling out incentives for EV buyers and introducing more tax breaks for market players “means subsidizing the rich,” he added.

“The government should instead help the public transport sector in EV adoption.”

The Department of Trade and Industry has been proposing a zero tariff policy for EV imports from 30% now. The Electric Vehicle Association of the Philippines has said zero tariff for imported EVs would not make them significantly more competitive than internal combustion cars.

Under the EV law, the government will evaluate the manufacture and assembly of EVs, charging stations, batteries and parts and components  for possible perks.

Imports of completely built EVs are entitled to incentives under the Tax Reform for Acceleration and Inclusion Law.

The law also exempts the importation of completely built charging stations from duties for eight years.