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Hybrid exclusion from zero-tariff policy meant to spur EV charging station development — BoI


HYBRID vehicles were excluded from zero-tariff treatment because their widespread adoption could delay the development of charging infrastructure for electric vehicles (EVs), the Board of Investments (BoI) said.

Ceferino S. Rodolfo, Trade undersecretary and Board of Investments (BoI) managing head, said:

“We want to develop the infrastructure, the charging stations. The problem with hybrid (vehicles) is that most of them will not need any charging stations,” Mr. Rodolfo told reporters last week.

“The charging stations would not be developed if hybrid vehicles (are allowed for import at zero tariffs). Pure EVs… would spur investment in charging stations,” he added.

The National Economic and Development Authority (NEDA) Board announced in November that it endorsed the issuance of an executive order (EO) that would lower the most favored nation tariff rates to zero percent on imported completely built-up units of EVs for a five-year period.  

The endorsed EO did not include zero tariffs for imported hybrid vehicles.

Once signed by President Ferdinand R. Marcos, Jr., the zero tariffs will cover electric passenger cars, buses, mini-buses, vans, trucks, motorcycles, tricycles, scooters, and bicycles. The current tariff rates for EVs range from 5% to 30%.

According to the NEDA Board, the EO seeks to expand market sources, boost adoption of EVs, and reduce the dependence on imported fuel.

Mr. Rodolfo added that the decision to exclude hybrid vehicles is in line with the government objective of attracting investment in the local production or assembly of EVs.

“Our ultimate goal is for local assembly, the manufacturing of electric vehicles, which will be leveraging our abundance of green metals, which we want to further add value to. Add to that our strength in software development and strength in electronics manufacturing,” Mr. Rodolfo said.  

Mr. Rodolfo said that the decision not to include hybrid vehicles is still subject to review in the draft EO.

“The decision of the NEDA Board is to provide a review clause. After one year, we will review the coverage of the products in the EO,” Mr. Rodolfo said.  

Foreign business chambers have urged the government to reconsider the EO and include hybrid in the zero-tariff order.  — Revin Mikhael D. Ochave

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