February 1, 2011, Business World
THE SENATE is considering incentives for the manufacture, sale and importation of hybrid/electric vehicles in an effort to reduce prices.
The Board of Investments (BoI) and industry yesterday urged the swift passage of legislation so as to make e-vehicles more accessible, particularly to the mass market.
“You need to reduce taxes on these types of vehicles,” said Sen. Ralph G. Recto, ways and means committee chairman, after a public hearing.
The Senate panel is currently reviewing three measures that propose exemptions from excise, import and value-added taxes (VAT) not just for the conveyances but also their parts and components.
E-vehicles are being touted as being a more sustainable mode of transport that would reduce fossil fuel dependency and costs, at an estimated P2.60 for an electric engine versus P5.10 for a diesel engine per kilometer.
Mr. Recto said the committee was looking to submit a report before the end of the month, adding that he was leaning towards duty-free imports of completely-built up units and VAT exemptions for required capital equipment to encourage domestic production.
Ferdinand I. Raquelsantos, president of Philippine Utility Vehicle, Inc. who was present at the hearing, said a brand-new e-jeepney currently costing P625,000 could be sold for P450,000 given the proper incentives.
“[I]f we have the volume, it would be more affordable to everybody,” Mr. Raquelsantos said.
BoI managing head Cristino L. Panlilio pointed to high e-vehicle costs as limiting their acceptance, saying: “the cost of an e-vehicle is really way above affordable range by the mass market.”
A brand-new e-jeepney priced at even P450,000 is more expensive compared to mass market jeepneys which start at P300,000.
“It is practically double that of a jeepney using a second-hand engine and the cost of an almost depreciated vehicle… and the payback is something like five years,” Mr. Panlilio pointed out.
Most hybrid/e-vehicles are supplied by Japan. But the Japan-Philippines Economic Partnership Agreement only provides a duty-free incentive for vehicles with a three-liter or higher engine capacity, he said.
A private hybrid vehicle such as the five-liter Lexus LS600hL costs nearly P9 million, while the 1.8-liter Toyota Prius is also priced at a steep P2.25 million for the est model.
“It would really be almost like an extreme luxury to own an e-vehicle at this point in time … A Prius you can at P2.2 million; a 1.8-liter [gasoline-powered] car you can for less than a million pesos … it’s not even 1% of car-owners [that are likely] to venture to a Prius for that kind of markup,” Mr. Panlilio said.
Photo of eJeepney with traditional jeepney by Reina/iCSC