President Ferdinand R. Marcos Jr. has signed an executive order establishing the Electric Vehicle Incentive Strategy (Evis) program, a P60-billion package of fiscal incentives aimed at accelerating the local manufacture of electric vehicles (EVs), attracting investments, and positioning the Philippines as a regional automotive manufacturing hub.
Executive Order No. 121, signed on July 29 but was only published on the Official Gazette website on Thursday, carries a P60-billion budget for up to four manufacturers, each eligible for incentives of P15 billion.
‘The program seeks to create more jobs, attract new investments, strengthen local manufacturing, reduce the country’s dependence on imported oil, and position the Philippines as a key player in the global electric vehicle supply chain,’ Palace press officer Claire Castro said in a briefing on Thursday.
The Evis program is currently the country’s largest incentive package for vehicle manufacturing, surpassing the P27-billion Comprehensive Automotive Resurgence Strategy (Cars) program launched in 2015 to support local internal combustion engine (ICE) production.
Qualified participants are entitled to Fixed Investment Support (FIS) and Production Volume Incentive (PVI) for 10 years from the date of registration of the enrolled EV models or their parts and components.
The FIS subsidizes a portion of a company’s capital investments in EV manufacturing.
Under the EO, manufacturers of battery electric vehicles (BEVs) and their parts and components may receive fiscal support equivalent to 40 percent of eligible capital expenditures, while manufacturers of hybrid, plug-in hybrid and fuel-cell electric vehicles may receive 30 percent.
Eligible costs include tooling, equipment, research and development, engineering modifications, start-up expenses and worker training, excluding land acquisition.
Meanwhile, under the PVI, registered manufacturers may receive incentives of up to 12 percent of the ex-factory price, capped at ?200,000 per locally manufactured vehicle.
The incentive is available for domestically assembled passenger and commercial EVs.
Rather than cash subsidies, qualified participants will receive non-transferable Tax Payment Certificates (TPCs) that can be used to settle income tax, value-added tax, excise tax and import duty obligations to the national government.
The Department of Trade and Industry’s Board of Investments (BOI), Department of Finance, Bureau of Internal Revenue and Bureau of Customs have been tasked to establish a digital system for issuing and redeeming the TPCs.
To qualify for the investment support, companies must commit at least P5 billion in new investments for EV manufacturing or assembly and introduce their enrolled EV models to the domestic or export market within three years of registration.
Manufacturers seeking the production incentive must produce complete EV units, manufacture mandatory parts and components, and commit to a minimum production capacity of 10,000 units.
The BOI will lead the implementation of the Evis Program and oversee the evaluation of applicants through a newly created Inter-Agency Committee on Electric Vehicle Industry Development, which shall be composed of representatives from the Department of Finance, Department of Energy, Department of Transportation, and Department of Budget and Management.
The EO also bars companies from claiming incentives for the same activity under other government incentive programs and provides for the suspension, refund or forfeiture of incentives if participants fail to meet investment and production commitments.