How did Nissan get the Kicks e-Power declared as a BEV?

There seems to be an issue brewing with one of the most popular hybrids in the Philippines... or at least formerly a hybrid.

We're talking about the issue that is being brought up by the Nissan Kicks because it seems Nissan Philippines, Inc. (NPI) has just secured an official recognition from the Department of Energy (DOE). Instead of a hybrid electric vehicle (HEV), the DOE is classifying the Kicks as a battery electric vehicle (BEV) just like the Nissan Leaf.

Spirit and Letters: The curious case of the Nissan Kicks e-Power BEV image

Just like you, my eyebrow is raised. How can that be? How can a car be declared as a battery electric vehicle when it has an engine that runs on internal combustion?

The explanation is actually fairly simple, and it involves a gray area in the EVIDA law and Nissan maximizing the opportunity. As with any legislation, Republic Act 11697 or the Electric Vehicle Industry Development Act (EVIDA) law has a definition for a Battery Electric Vehicle which reads:

Battery EV (BEV) refers to an electrically propelled vehicle with only a traction battery as power source for vehicle propulsion with reference to those provided under Section 5 of the EVIDA-IRR.

For reference, this is the definition of a Hybrid Electric Vehicle (HEV) under the same law:

Hybrid-EVs (HEVs) refers to a vehicle with both a rechargeable energy storage system and a fueled power source for propulsion with reference to Section 5 of the EVIDA-IRR.

Spirit and Letters: The curious case of the Nissan Kicks e-Power BEV image

Section 5 of the IRR states the same things, and on the surface, it’s pretty straightforward: a BEV is a vehicle that is driven by electric power alone, while a HEV is driven by both. But there already lies the flaws in the law that Nissan used to their advantage for the e-Power system in the Kicks.

I am no lawyer (I did want to be, at one point) but there are three issues that I can spot. The first is the definition that a BEV is one wherein only an electric motor can drive the wheels. The e-Power system of the Kicks falls into this category because the motor is the sole device that can provide rotational force to the wheels. The engine in an e-Power cannot directly rotate the wheels under any circumstances because there exists no direct mechanical link (via a clutch, driveshaft, or transmission) between the engine and the axles.

Spirit and Letters: The curious case of the Nissan Kicks e-Power BEV image

The second lies in the definition of a hybrid, and the key word there is propulsion. A hybrid, as defined, states that both an electric motor and engine are able to provide propulsion. The engine in an e-Power cannot do that. Generation, yes. Propulsion, no. It appears the law was written based on the system most commonly used on Toyota hybrids which have been the most prevalent here prior to EVIDA; in that system, both the motor and engine have a direct ability to drive the axles.

Spirit and Letters: The curious case of the Nissan Kicks e-Power BEV image

The third is that the definition of a BEV never expressly stated that it cannot have an engine as a means of charging. It never required an EV to have a charging port as the sole means of charging. While common BEVs have charging ports, the EVIDA law never dictated that charging can only be done by a plug. It never expressly stated that an engine acting as a generator cannot do the same.

Nissan found this gray area, recognized it, and urged the DOE to call it a BEV. And the DOE -like any government agency- has to follow the letter of the law. And that's how the Kicks ended up legally as a BEV.

The problem is the classic dichotomy between the letter of the law and the spirit of the law. The letter of the law on a BEV says e-Power is a BEV. The spirit of the law, however, is that the intent of a BEV is a vehicle without tailpipe emissions at all because no BEV exists that has an internal combustion engine... except now. In many minds, mine included, it is not a BEV under the spirit of the law. The irony is that it was Nissan that was the proponent for the badge Zero Emission with the Leaf; a BEV both in the spirit and letter of the law.

Every automotive enthusiast fiber of my being says it isn’t a BEV. To me, the e-Power is a series hybrid where the series is from engine to charge system to battery and then to motor.

Spirit and Letters: The curious case of the Nissan Kicks e-Power BEV image

Don’t get me wrong: I think Nissan played it absolutely brilliantly. It’s not far removed from the brilliance we see when Formula One teams look at the FIA rulebook and find a special advantage that no one else spotted. We know Nissan has been trying to lobby the e-Power as a BEV in other markets, but the Philippines is the only case where we know they succeeded. 

Their lawyers, product planners, consultants, and executives certainly earned their bonuses this year. Slow clap, Nissan.

What is important to recognize is that in the field of vehicle electrification, there is lots of room for innovation. Toyota has been doing hybrid drive for a while, and that system is fully developed. Honda is using a switching two-motor hybrid system that fits their brand of drive. Mazda uses a hybrid system that is more integral and in-line with the drive system. Everyone does it differently. Nissan just did it their way with e-Power, and they spotted that the law had a massive gray area that benefitted their system.

Spirit and Letters: The curious case of the Nissan Kicks e-Power BEV image

I know Nissan has to embark on a massive campaign to market the “gas fueled, electrically driven” messaging of the Kicks and the e-Power system in general because they plan on launching more models with it; and they need to strike when the iron is hot. But Nissan has to be very cautious about their messaging from here on out because some could misinterpret it or even be misled by it. The Kicks e-Power -while a BEV legally- needs to be gassed up at a station. You do not park it in the EV parking spot in a mall because it does not have a charging port.

Spirit and Letters: The curious case of the Nissan Kicks e-Power BEV image

There are quite a few that will object to this. I imagine Nissan’s rivals are looking at ways to have the law amended to make it clear that a BEV cannot have an engine; no ifs or buts. The problem is laws take years to amend; by then, the 5-year period for EV’s benefits may have lapsed. There is even an online petition against the Nissan Kicks e-Power started by a (now former) member of the Electric Vehicle Association of the Philippines (EVAP) that goes so far as to accuse Nissan, DOE, and EVAP of being “complicit in misleading Filipinos” by classifying it as a BEV and not a HEV. I’m not sure about the collusion part, but I understand his frustration.

Here’s my take though, and it all depends on what Nissan does from here on out. BEVs and HEVs do get very similar advantages under our law like exemption from number coding. But a BEV has a distinct edge over a HEV: the latter incurs a 50% excise tax while the former is 0%. That’s a big amount.

If Nissan Philippines drops the SRP of the Kicks e-Power to reflect that drop in excise tax from 50% to 0%, then that’s all well and good. A token rebate or time-limited discount won’t do; drop the SRP and pass on the savings to the customer and we won’t care that it’s a BEV under the law even though any person knowledgeable about cars knows it is a series hybrid.

Like every Filipino, we just like to pay taxes… especially if it was zero.