The EV era
If Congress has its way, we might experience greater chaos on our roads, particularly in highly urbanized and densely populated areas like Metro Manila. More electric vehicles (EVs) of the two- and three-wheeled kind will probably populate our streets, adding to the congestion and confusion on our thoroughfares. That is, unless new regulations are also put in place to govern the use of such vehicles on public roads.
A lawmaker is proposing amendments to Republic Act 11697 or the Electric Vehicle Industry Development Act to include two- and three-wheeled vehicles in the law’s scope. This means electric motorcycles and tricycles and the like will also be entitled to tax incentives such as zero import duty until 2029, and other perks currently available only to electric cars.
House Bill No. 9573 proposes that duty exemptions will cover not just four-wheeled electric vehicles but also two-wheeled and three-wheeled electric vehicles as well as “such other vehicles with at least one electric drive for vehicle propulsion…[including] a BEV [battery electric vehicle], hybrid-electric vehicle, light electric vehicle, and a plug-in hybrid-electric vehicle…”
What I found odd is that the same bill provides that “in the case of imported electric jeepneys and electric tricycles, the Department of Finance, upon recommendation of the DTI, may suspend the [duty-free import] exemption in order to protect local manufacturers…” It is unclear to me why such exclusion has been made particularly for electric-powered public utility vehicles.
If there is one land transportation segment that needs updating, and preferably to electric, it is the public utility segment. Why should there be an option to suspend the privilege of their duty-free or tax-free importation? In fact, why should “local manufacturers” of electric jeepneys and electric tricycles, if any, require “protection” from imports?
What if electric jeepneys and electric tricycles made abroad, if any, are cheaper to source and quicker to deploy for local public utility operators? And what if local manufacturers, because of their inefficiencies and higher labor costs, end up making products that will be more expensive for local operators? What will be the parameters to trigger the need for their “protection” from imported electric vehicles?
If electric cars can be imported tax-free until 2029, then maybe the same should apply to all other types of vehicles running on electric or battery power. This seems to be fair. But why exclude electric jeepneys and electric tricycles? Is it because there are no local manufacturers of electric cars just yet, and there are already local producers of electric jeepneys and tricycles?
The duty-free exemption under the law is time-bound, anyway. It is only until 2029, if I am not mistaken. Perhaps the “protection” clause is unnecessary considering that it is already 2024 and, at best, the protection is good only for five years? Isn’t it better to allow the tax-free importation of all types of public utility vehicles running on electric power, but give incentives to local makers to make their products more competitive?
As for the ensuing chaos on our roads, it is certain that as soon as two-wheeler and three-wheeler EVs are exempted from import duties, there will be an influx of imports. And with the possible retail price drop, more people requiring mobility will turn to these types of EVs. For sure, these will be a lot cheaper than any electric car, which can cost at least P500,000 locally.
Moreover, with inexpensive electric bicycles, scooters, and similar types of personal mobility devices running on electric power becoming more readily available, many individuals will surely consider these alternatives to public transportation. Considering as well that such motorized EVs do not yet require government registration and operator licensing.
And this is why legislators should perhaps consider requiring additional regulation to govern the use of all types of EVs on our roads, and not just electric cars. There should be clear regulations and rules on the use of two-wheel and three-wheel EVs of all types, whether for carrying passengers or just for use as a personal mobility device. Otherwise, chaos on our roads is certain.
Just recently, the National Federation of UV Express went to court to force the government to take motorcycle “taxis” off the streets. The group, composed of UV Express operators, wants a Mandaluyong trial court to stop the ongoing government dry run temporarily allowing the use of motorcycles as public transportation.
Angkas, Joy Ride, and Move It are currently offering motorcycle taxi services under a pilot study of the Land Transportation Office (LTO). UV Express operators, in a report on GMA News Online, claimed that over a third of their revenues were already affected by these MC taxis, and adding more MC taxi operators would halve their revenues.
Other than directly competing with them for commuters, the UV Express operators also claimed that it was unfair for MC taxis to continue operating without franchises. Other public transportation like jeepneys and buses, UV Express, Grab cars, and even school and tourist buses, all secure franchises, at a cost, from the Land Transportation Franchising and Regulatory Board or LTFRB.
If memory serves me, the pilot study for MC taxis started in 2019. Angkas, I believe, started even before that. In short, MC taxis exist under a temporary permit. And Congress has not passed a law to regularize the operation of motorcycles as public transport. Tricycles are different as they get franchises from local governments and not the LTFRB.
And this is precisely the kind of situation that we wish to mitigate in the future when more EVs populate our streets. By removing import duties, we are opening the doors to more imported EVs on our roads. This should be matched with appropriate rules and regulations to govern their ownership and use. Safety of the public, and perhaps fare regulation in the case of public transport, should be the prime considerations.
Marvin Tort is a former managing editor of BusinessWorld, and a former chairman of the Philippine Press Council
