For a period of 5 years

While there are still issues surrounding the source of energy and the carbon emissions computed from production, there’s no way around it: the electric vehicle is the future of personal transportation and mobility.

Be that as it may, the prices are high if you look at the EVs available in the local market. Actually, in the volume sector, the prices could even be seen as prohibitive due to many factors such as exchange rates, parts supplies, shipping costs, production costs and delays, and more.

There’s nothing that can be done on a local level about many of the factors… except for one: import duty.

PBBM signs EO to cut import duty for EVs to zero image

In the government’s drive to push electrification, President Ferdinand Marcos, Jr. has signed Executive Order 12 to temporarily amend the Customs Modernization Act by cutting the tariff on electric vehicles. The EO also cuts down the tariff on the importation of charging/distribution parts of electric cars and other related production equipment.

What that means is instead of incurring a full 30% import duty on EVs (e.g. Nissan Leaf), there will now be none. Yes, zero percent. This also applies to certain electric motorcycles as well as other commercial vehicles that are also EVs; in such cases, the import duty drops from 30% or 20% to 0%.

This effectively gives automakers the green light to import their EVs and offer the cars to customers at far more attractive prices; something that the recent EV Industry Development Act (EVIDA) was not able to do because import duty had not been removed.

PBBM signs EO to cut import duty for EVs to zero image

But take note: this is not a permanent thing. The EO makes it clear that the 0% import duty on qualified electric vehicles will only be applicable for 5 years. After that period, the import duty (and prices) will shoot back up to 30%.

The rationale of the government is to give the industry time to set up local production of EVs (hence the provisions of EVIDA), lower the cost of charging equipment (as mandated in the EO) as well as make EVs more attractive to customers so that they can actually -and realistically- consider an EV over an internal combustion engine (ICE) vehicle.

So, now that EV prices will undoubtedly drop (at least for the next 5 years) will you buy an EV over an ICE car?