Volvo to take advantage of lower excise tax and launch hybrids in 2018

AUTO NEWS

Safe and electrified?

Here are some interesting developments related to the excise tax, as the new law has prompted one premium auto brand to introduce their more advanced models in the Philippines. 

Volvo Cars Philippines has just announced that they will be launching their brand's hybrid models for local sale, and are targeting competitive prices relative to competitor models with conventional combustion engines. 

The announcement is in line with a specific provision in the reforms to the automotive excise tax schedules specified in Republic Act 10963, or the Tax Reform for Acceleration and Inclusion (TRAIN). Under the new law, hybrid vehicles or models that can be driven on fuel (gasoline or diesel) and on electric power can enjoy a 50% relief from the excise tax schedule that applies to its Net Manufacturer's/Importer's Selling Price (NMISP) price bracket. The application of only half the tax rate means that very fuel efficient hybrid vehicles could potentially be priced competitively in the market. 

We contacted Volvo Cars Philippines representative Mr. Paolo Ella as to what model line up they are looking at, and he shared with us the first four hybrids that will come in.

“Right now, we are looking at the hybrid versions of the XC90 SUV, the S90 sedan, the V90 Cross Country, as well as the XC60,” said Paolo Ella of Volvo Cars Philippines. “All four of them come with the T8 engine.”

Mr. Ella further shared with us that Volvo Philippines is still waiting for feedback on the arrival of the first batch of Volvo hybrids in the country, though he did state that their target dates for introduction is sometime in Q3 or Q4 this year.

Internationally, these models are already available at Volvo dealerships, but local introduction under the older tax schedules would have resulted in prohibitive prices for these eco-friendly models. The exemptions in RA 10963 have opened the doors for their introduction into the market. 

As for Volvo's full EV models which, under RA 10963, would be fully exempt from excise taxes, Ella stated that they could be introduced, but will be challenging considering the lack of local infrastructure.  

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