Hybrid vs electric vehicles
Hybrid vehicles—those that are propelled by both an internal combustion engine and an electric motor—will no longer be slapped import tariffs until 2028, a move that the Marcos administration expects will “stimulate demand for electric and hybrid vehicles, encourage domestic manufacturing and assembly, and generate new jobs within the green technology sector.”
President Marcos okayed the measure as chair of the National Economic and Development Authority (Neda ) Board, which approved during its 16th meeting last week the expansion of the coverage of Executive Order No. 12 to include hybrid and plug-in hybrid jeepneys, buses, and trucks as well as e-motorcycles, e-bicycles, and the batteries widely used in hybrid electric vehicles (EVs).
EO 12, which was signed in January last year, provided for the slashing of import duties on electric vehicles, including their parts, to zero—from the current range of between 5 and 30 percent—until 2028, which should make them cheaper, thus stimulating demand among those who want “greener” transportation options.
“By encouraging consumers to adopt EVs, we are promoting a cleaner, more resilient, and more environmentally friendly transportation alternative,” said Neda Secretary Arsenio Balisacan.
Charging infrastructure
Energy Secretary Raphael Lotilla was just as enthusiastic, saying that broadening the scope of EO 12 would simplify environmentally friendly choices for consumers and foster innovation and growth within the country’s electric vehicle industry program.
Not everyone, however, is ecstatic about the Neda Board’s decision.
Edmund Araga, president of the Electric Vehicle Association of the Philippines (Evap), claimed that the inclusion of hybrids in the EO’s scope will undermine efforts to wean the country away from fossil fuels and put pure electric vehicles—or those that run solely on an electric motor—at a serious price disadvantage.
Evap said in a position paper that it “strongly opposes” the expansion of the tariff exemption to hybrids as they fully source their power from petroleum “and thus do not contribute to the development of the charging infrastructure,” one of the main objectives of the Electric Vehicle Industry Development Act of 2022 that sets the framework for EV operations in the country, from charging stations to batteries, parts, components, and other related infrastructure.“The further reduction in prices of HEVs (hybrid electric vehicles) would be detrimental to the growth of BEVs (battery electric vehicles) and further slow down charging infrastructure development,” Evap said.
E-vehicle of choice
Indeed, out of the 10,602 EVs sold in 2023, 9,293 units were hybrids or 87 percent of the total. On the other hand, only 462 units of battery electric vehicles were sold, for a mere 4.36 percent of total sales, based on data from the Chamber of Automotive Manufacturers of the Philippines Inc. and the Truck Manufacturers Association.
Trade Secretary Alfredo Pascual also said last March amid the review of EO 12 that cutting tariffs on hybrid vehicles to zero was “not justifiable,” as it would go against the government goal to make electric vehicles account for at least half of the vehicles on the road by 2040.
It will fall on the private sector, after all, to install those charging stations but if hybrids—which are not only cheaper but do not need to be charged—will be the e-vehicle of choice, then it is likely that the deployment of charging stations across the country to ease “range anxiety” or the fear that the charge will run out will slow down since there will not be enough pure EVs that will use them.
The Comprehensive Roadmap for the Electric Vehicle Industry, that calls for a smooth transition to an electrified transport sector, aims to reach 311,700 EVs by 2028, and put up at least 7,300 EV charging stations. As of April 2024, there are 563 registered charging stations nationwide recognized by the Department of Energy.
Smaller carbon footprint
There is no arguing that hybrids leave a smaller carbon footprint than the conventional gas or diesel-fired vehicles that account for 99.999 percent of the 14.3 million registered vehicles at the end of 2023, as they do not need as much petroleum to travel the same distance. But small does not mean zero.
Even then, hybrids could be positioned as part of the transition to full EVs, that by introducing more Filipinos to the benefits of going electric, not just felt by the pocket but by the environment, too—they will be primed to take the next major step and go full electric with the right policy environment, incentives, and price points in place.
Indeed, the Philippines must not be content with just hybrids and the government must review the road map as well as the legal framework to determine if it is going in the right direction toward a clean and green transportation network.
But at this point in the country’s journey toward a cleaner transportation system, the perfect must not get in the way of the good enough for now.
