The What’s What of Republic Act No. 11697
July 25, 2023
Republic Act No. 11697 or the Electric Vehicle Industry Act (the “EVIDA”) lapsed into law on April 15, 2022. The EVIDA is the latest law to set out the government’s policy of energy efficiency, conservation, sufficiency, and sustainability in line with Republic Act No. 11285 or the Energy Efficiency and Conservation Act.
The EVIDA aims to counter increasing fuel prices and reduce the country’s dependence on fossil fuels by encouraging the use of electric vehicles.
What does the EVIDA cover?
The EVIDA governs “the manufacture, assembly, importation, construction, installation, maintenance, trade and utilization, research and development, and regulation of electric vehicles”.
Which agencies are in charge of implementing the EVIDA?
The Department of Energy (“DOE”) is the primary agency tasked with the promotion of the adoption of electric vehicles and in the development of charging stations and related equipment in coordination with the Department of Transportation. These agencies will likewise consult local government units and other relevant government agencies when implementing the EVIDA. You may find a copy of the Implementing Rules and Regulations of the EVIDA here.
Comprehensive Roadmap for the Electric Vehicle Industry
The EVIDA contains the regulatory framework on electronic vehicles and outlines the Comprehensive Roadmap for the Electric Vehicle Industry (the “CREVI”).
The CREVI is a national development plan with four components:
- Electric Vehicle (“EV”) Adoption, including encouraging establishments to include charging stations;
- EV Manufacturing;
- Research and Development (R&D) on EVs; and
- Human Resources Development and Training (i.e., improving technical competencies to encourage EV adoption).
The CREVI sets the timeframe for when industrial and commercial companies, public transport operators, and government agencies will be required to have fleets consisting of at least 5% EV. The end goal is to transition these sectors into full-EV fleets.
The CREVI will be incorporated in the Philippine Energy Plan and the country’s National Transport Policy.
What are the Kinds of EVs?
The EVIDA defines an “EV” as a vehicle with at least one electric drive for vehicle propulsion.
The EVIDA Implementing Rules and Regulations, which were released on September 20, 2022, identified four classifications of EVs.
1. Battery EVs (BEVs)
A vehicle which is electrically propelled with only a traction battery as power source for vehicle propulsion is a “Battery EV” under the EVIDA.
2. Hybrid EVs (HEVs)
Hybrid-EVs are those with both a rechargeable energy storage system and a fueled power source for propulsion.
3. Light EVs (LEVs)
Light EVs are those used in micro mobility that provide alternative modes of transportation which include electric scooters, electric bicycles, electric personal transport, and other similar vehicles weighing less than fifty kilograms (50 kgs).
4. Plug-In Hybrid EVs (PHEVs)
Plug-in hybrid-EVs are hybrid EVs with rechargeable energy storage system that can be charged from an external electric energy source.
Not an Exclusive List
The list in the EVIDA IRR is non-exclusive and future EVs may be recognized by the DOE, provided that the vehicle has at least one electric drive used for propulsion.
What’s In It For Me?
EVs come at a steep price, but the EVIDA does provide some incentives to increase likelihood of adoption. Sections 24 and 25 of the EVIDA outlines some of these non-fiscal incentives for both EV Users and EV Manufacturers and Importers.
These incentives are available for eight years from the effectivity of the EVIDA.
Fiscal Incentives for EV Users
Discounts in Motor Vehicle User’s Charge (MVUC)
BEV owners get a 30% discount on the MVUC, while HEVs get a 15% discount.
Generally More Affordable EVs
While the fiscal incentives for importation don’t directly affect vehicle users (that benefit is direct to EV importers under Section 24(b) of the EVIDA and Section 29 of the EVIDA IRR), EVs enjoy import duty incentives under the TRAIN. In fact, just last January 13, 2023, the President ordered lower rates of import duty through Executive Order No. 12.
That means dealers can offer EVs at competitive prices when compared to regular, gas- or diesel-powered vehicles.
Non-Fiscal Incentives for EV Users
Exemption from Mandatory Number Coding Schemes
The unified vehicular volume reduction program (“number coding”) exemption applies to hybrids in the DOE’s list of recognized electric vehicles. Under the DOE’s EV recognition guidelines, the DOE will regularly release lists of recognized EVs upon approval of Notices of Application for Recognition.
Priority Registration and Renewal of Registration, and Special Vehicle Plates
While the LTO has yet to release any rules, regulations, or guidelines for priority registration of electric vehicles, the LTO recently published the Uniform Policy on License Plate Series, which specifies a letter assignment for electric vehicles. This should make it easier for the MMDA and local government enforcers to implement the number coding exemption.
Electric and hybrid vehicles are assigned under the following plate letters:
- The rightmost letter assignment of electric vehicles could be any letter from V, W, X, Y, Z, while the middle letter could be anywhere from the letters A to M. The LTO gives the following examples:
- AAV 1234
- AHW 4567
- AMZ 8901
- The right most letter assignment of hybrid vehicles could be any letter from V, W, X, Y, Z, while the middle letter could be anywhere from the letters N to Z. For example:
- ANV 1234
- ARY 5678
- AZZ 9012
Registration Exemptions for Light EVs
The EVIDA confirmed the Department of Transportation’s authority to exempt LEVs from vehicle registration, provided that they are:
- Exclusively for private use; and
- Not intended to be operated and used on any public highway.
This seems to confirm the LTO’s earlier Administrative Order No. 2021-039, issued May 11, 2021. This Order categorized electric vehicles and lists the driver’s license and registration requirements depending on vehicle type.
Encouraging Participation from Dealers, Manufacturers
Fiscal Incentives for Importers
As earlier mentioned, the EVIDA allows duty-free importation of completely built EVs for eight (8) years from the effectivity of the EVIDA.
Incentives for Manufacturers
While importers of EV parts will still undergo an evaluation process for fiscal incentives, the EVIDA and its IRR promise “expeditious processing.” This is on top of an EV incentive strategy to be reviewed by the Fiscal Incentives Review Board (FIRB) for manufacturers, including a provision on future government subsidies for buyers of EVs consistent with the CREVI.
Encouraging EV Adoption
In a statement released last March 2023, the DOE said that it is pushing for an increase in the rollout of EVs in the country to 10% from the original 5% mandated under the EVIDA. From 2023 to 2028, DOE will target the roll out of 2,454,200 EVs comprising cars, tricycles, motorcycles, and buses plying nationwide. Meanwhile, 65,000 EV charging stations will be installed nationwide. Citing data from the Land Transportation Office (LTO), the Electric Vehicle Association of the Philippines said that 13,934 EVs have been sold in the Philippines to date.
This Primer is posted for academic and general references only and does not constitute legal advice. For further information on this topic, you may contact the De Guzman San Diego Mejia Hernandez Law Offices (GSMH Law) by phone (02)85110908 or email (counsel@gsmhlaw.com). The GSMH Law website can be accessed at www.gsmhlaw.com. GSMH Law is bounded by our professional ethics to ensure that any information relayed to us and advice given thereon in the course of, or with a view to, professional employment shall be kept privileged and confidential.