BYD could have decision by Q2 2023
There's a recent development in the local car manufacturing industry, and it is something that could greatly benefit our economy.
As we all know, the Philippines has one of the most expensive power rates in the ASEAN region, which makes it less attractive for car manufacturers to set up production hubs here. Not to mention, some existing laws may also be prohibitive in attracting foreign investments like the 60/40 ownership rule.
However, as the global car industry is shifting towards electrification, the Philippines has something that could play to its strengths in positioning itself as a hub for sustainable manufacturing facilities.
According to Trade Undersecretary Ceferino Rodolfo, the Philippines is currently competing with Vietnam and Indonesia for the next electric vehicle assembly plant that BYD will set up in Southeast Asia. For those who may not know, BYD is one of the world's largest makers of EVs, and their battery technology is one of the most advanced as of late. In fact, even Toyota has collaborated with the Chinese auto giant to develop its bZ3 electric sedan.
Rodolfo added BYD is already in an “advanced stage of discussions” with the country's executives, and representatives of the automaker have already explored the possible factory sites last year.
If you ask how did the Philippines enter the discussion? The reason, according to the trade official, is two-fold – the EVIDA law, and the country's rich nickel reserves.
Speaking of the former, the recently-enacted EVIDA law grants tax breaks and other fiscal incentives to manufacturers that will assemble EVs, and EV components as well as set up their R&D centers in the country. In addition, President Marcos' recent EO 12 supplements the EVIDA law, cutting down the tariff on the importation of charging/distribution parts of electric cars and other related production equipment for 5 years. This should technically give BYD enough time to set up its manufacturing hub in the country while being spared from import duties and other additional tariffs for the time being.
On the other hand, the country's rich nickel reserves make the country a good fit for EV manufacturers and battery-making companies, as this metal serves as a key element for making lithium-ion batteries.
With BYD already set to build an EV production facility in Thailand, it remains unclear whether its next Southeast Asian factory will be a full-blown assembly plant or a final assembly hub with parts coming in from overseas. Either way, here's to hoping the country lands this huge investment.