Philippines’ push for electric vehicles

While the market is still small compared to the gas-run vehicles, EVs are growing in the Philippines and industry officials believe that there is a potential for growth of the segment in the country, similar to first world countries such as those in Europe.

An EV vehicle waits for passengers inside the Ateneo de Manila University in Katipunan, Quezon City, Philippines. By Iris Gonzales

An EV vehicle waits for passengers inside the Ateneo de Manila University in Katipunan, Quezon City, Philippines. By Iris Gonzales

The streets of Metro Manila seem the same day in and day out. The roads are packed and traffic is always heavy; a novelist has dubbed the Philippine capital as the gates of hell amid the slow moving grind. And the surrounding air is dark with an overcast of soot and smog.

A closer look however in some streets in the metro would show a growing trend in the country: the entry of electric vehicles or EVs. There are now electric buses plying the country’s central business district, the City of Makati. E-tricycles or trikes, the three-wheeled pedicabs common in developing countries, are in many cities while e-jeepneys, another common commuter minivan in countries such as the Philippines are also plying many routes all over the metropolis.

Indeed, while the market is still small compared to the gas-run vehicles, EVs are growing in the Philippines and industry officials believe that there is a potential for growth of the segment in the country, similar to first world countries such as those in Europe.

The Electric Vehicle Association of the Philippines (EVAP), the umbrella organization of EV sellers in the country, estimates that close to 40,000 EVs will ply Philippine roads by the end of this year.

During the fourth Philippine Electric Vehicle Summit 2015 held in February, the group’s president, Rommel Juan, an entrepreneur, said that this year alone, they expect to sell 23,500 EVs or 20,000 e-bikes and e-motorcycles, 3000 e-tricycles and 500 jeepneys.

This is a huge increase from last year’s numbers, Juan said.

According the group’s data, there were 15,750 EVs sold in the country last year, comprising of 15,000 e-bikes and e-motorcycles, 500 e-trickes and 250 e-jeepneys.

“We therefore estimate that by end of 2015, we will have a total of about close to 40,000 EVs on Philippine roads,” Juan said in his speech.

In the long run, the target is to roll out one million EVs in the Philippines.

“All we need to do is to just sustain the gains we have achieved, maintain the momentum, and we will reach our goal by 2020,” he said.

Juan is optimistic the Philippines can achieve the goal because it is the unheralded public transport sector that is generating excitement with electric vehicles.

This is in contrast with other countries where electric vehicles are fast becoming popular, particularly the flashy electric sport car models like the Tesla or the various hybrid cars offered by manufacturers.

“In a country where mass public transport is not yet that efficient and reliable, the Philippines is finally embracing electric vehicles and slowly but surely more forward thinkers are realizing their viability as an alternative transport solution for the country,” Juan said.

For instance, there is the so-called Makati Green Route (MGR) introduced by the Institute of Climate and Sustainable Cities and EV manufacturer PhUV Inc.

“The Makati Green Route utilizes over 20 e-jeepneys in the Legaspi and Salcedo Villages in the city in ferrying office workers around the designated routes,” he said.

These e-Jeepneys used at the so-called Green Route are the first to ever receive the new orange license plates issued by the Philippines transportation office for e-jeepneys.

“It truly was a real trailblazer. Now, seven years after the introduction of the first e-jeepney route, at last many other areas are following suit,” Juan said.

Aside from local government units or the cities in the metropolis, there are also universities and private companies that have now shifted to EVs for their service vehicles.

One example is Manila Electric Co. (Meralco), the country’s biggest power distributor as well as private schools such as the Ateneo de Manila University and De La Salle University in Cavite, in the southern part of the National Capital Region.

These offices and institutions have a fleet of e-jeepneys going around their compounds and campuses.

EV station inside the Ateneo de Manila University in Katipunan, Quezon City, Philippines. By Iris Gonzales

EV station inside the Ateneo de Manila University in Katipunan, Quezon City, Philippines. By Iris Gonzales

Filinvest City, a mixed-use development owned and operated by Filipino-owned property giant Filinvest Land, has also announced that it is operating a fleet of e-jeepneys inside its huge mall in Alabang in the city of Muntinlupa, in the southern part of Metro Manila.

Aside from e-jeepneys, the number of electric tricycles or e-trikes is also increasing.

EVAP Executive Director Bodie Pulido said that Kea Motors, a pioneer e-trike manufacturer, has launched a fleet of e-trikes. It also put up the very first commercial charging station in Bacoor, Cavite.

In promoting, electric vehicles, Juan said EVs for public transport make sense primarily because they are environment friendly.

“They will improve our communities’ already heavily-polluted urban roads because they do not exhaust any harmful fumes. And at least, you can have alternatives on clean sources of power such as solar or biomass. This is unlike oil which we import 100 percent,” Juan said.

EVs are also cheaper to maintain unlike regular vehicles, which have a lot of moving parts and thus require much more maintenance and repairs.

He believes that maintenance cost of EVs is lower by at least 15 percent.

Another reason, Juan said is that electricity is cheaper than fuel.

“You can generate total cost savings of up to 40 percent. This means more income for the operator and driver,” Juan said.

In the Philippines, where the traditional jeepneys are so noisy because their engines are usually second hand, Juan said EVs offer a quiet and thus, more convenient alternative.

“Commuters will not have to contend with noisy second-hand jeepney motors or the 2-stroke motorcycle engines of tricycles. So people who live beside tricycle routes would finally get a restful night’s sleep because electric vehicles are very quiet,” Juan said.

And if the Philippines becomes an EV manufacturing hub in Southeast Asia, Juan said as much as 100,000 new jobs might be generated.

In terms of carbon emissions, Juan said that with the initial deployment of 100,000 e-trikes, total avoided carbon emissions would be around 355,806 tons per year.

“At a market price of carbon credits of $10 per ton, this translates into $3.56 million or P160 million per year,” he said.

The same number of e-trikes would also saves the Philippines $100 million in gasoline imports, according to estimates made by Juan’s group.

Aside from environmental benefits, EVAP believes there are also corresponding health benefits.

Juan said that even with just a 10 percent penetration rate by EVs, savings through reduction in pulmonary and cardiovascular diseases and even premature death is estimated at P1.79 billion.

The government’s coffers also stand to benefit from a growing EV industry, EVAP said.

Revenues generated by the EV industry, for instance, are estimated at P1.57 billion from value added tax (VAT), which will be collected in nine years based on gross revenues of P33.5 billion from sales of 100,000 e-trikes and 10,000 e-jeepneys.

And because EVs will boost electricity sales, which are, in turn slapped with VAT, there will also be additional VAT collected from an estimated additional power demand for the next nine years of 88.8 gigawatt-hours.

Juan said there are indeed benefits in subsidizing the EV industry in terms of potential revenues that it could generate, as seen in the experience e of other countries.

In Asia, for instance, China subsidizes its EV industry to the tune of about $9,281 per EV through 100 percent tax exemptions. Japan is doing the same thing albeit at a lower cost or about $2,700 per EV via a 2.7 percent tax exemption.

Beyond Asia, other developed countries such as Ireland and Monaco also offer a $9,000 subsidy per vehicle. This is higher than the $8,000 per vehicle subsidy of Canada and the $7,500 per vehicle subsidy of the United Kingdom.

A number of other countries also give 100 percent tax exemption for EVs. These are the Czech Republic, Denmark, Greece, Iceland, Netherlands, Norway, Sweden and the United States while Denmark, Germany, Iceland, Monaco and Netherlands also provide non-fiscal incentives such as free parking and special lanes for EV users.

Juan said that to make the local industry at par with its counterparts abroad, the Philippine government must also support the industry by providing fiscal and non-fiscal incentives.

“So we now see more reasons why we need to support the domestic EV industry to make it at par not only with our Asian neighbors but also with the rest of the world,” Juan said.

He said a pending legislation in Congress, the Alternative Fuel Vehicles Bill, would help boost the industry.

The measure seeks to provide incentives such as lower tariffs and fee exemptions for the manufacturer, assembly, conversion and importation of electric, hybrid as well as other alternative fuel vehicles.

In a position paper, EVAP said the measure would be a “shot-in-the arm” that would energize the industry’s growth momentum, which shall incentivize the technology providers to infuse the needed technology in the Philippine manufacturing set up.”

For its own initiative, EVAP said it offers business professionals and vehicle industry experts the chance to exchange knowledge and best practices on EV technology, network with colleagues both here and abroad and exchange ideas regarding electric vehicle technology and sustainable mobility.

Juan said some foreign EV investors are on the lookout for local partners, especially in the manufacturing and assembly sectors, which EVAP hopes to tie up with local companies.

“We hope that more foreign investments would continue to pour into the local EV industry and in the very near future, make the Philippines the EV manufacturing hub in the region.

Indeed, there are reasons to shift to EVs, Juan said for both private and public use.

And the momentum is gaining ground, he said.

Philippine tourist destinations such as Boracay, Davao and Surigao – provinces outside Metro Manila — are utilizing e-Trikes while cities and central business districts are now adopting electric vehicles into their public transport landscape.

The growing support for EV infrastructure is also a testament to the growth of the business.

Meralco, which holds the franchise to distribute power in Luzon, one of three major islands in the Philippines, has built charging stations in a commercial property in Taguig City, in Metro Manila and inside the campus of the Ateneo, a Jesuit-run Catholic university in Quezon Cit.

In an interview, Meralco senior vice-president Al Panlilio said all these initiatives for EVs are on backed by expectations that the industry would indeed happen.

“EVs will happen. It’s just a matter of time,” Panlilio said.

But while a robust EV industry would boost Meralco’s electricity sales, Panlilio said it’s also all about promoting a more sustainable and environment friendly transportation sector.

“At the end of the day, it really is beneficial to the environment,” he said.

Juan’s dream is for the Philippines to become the manufacturing hub of EVs in Southeast Asia.

“We would love to believe that the nation has now accepted electric vehicles as a viable alternative mode of transport. We continue sustaining our gains and pretty soon, we can finally lay claim to the title Electric Vehicle Hub of Southeast Asia,” he said.

Meralco’s Panlilio said that in the future, the power distributor is also open to manufacturing EVs on its own or through partnerships.

“At the end of the day, we’ve always wanted to do that and manufacture but the raw materials are imported. Maybe the best way is to find a partner outside. We are talking to a lot of people, trying to open some doors and see where we could play a role,” Panlilio said.

The Philippines’ Department of Energy (DOE) is also supporting the growth of the sector.

In February 2015, the department commenced the bidding for the supply and delivery of 3,000 units of energy efficient electric tricycles to be distributed in various local government units (LGUs).

Energy Undersecretary Donato Marcos this project would not only benefit the electric transport industry, but also the ordinary Filipino citizens and tricycle drivers, who can enjoy an alternative mode of public transport.

The project is targeting LGUs nationwide with initial roll out of 3,000 units in the National Capital Region and nearby provinces.

“The E-Trike project aims to promote sustainable transport, address the increasing carbon emissions in major cities, and reduce oil dependence of the local transport sector. The project also aims in transforming the public tricycle sector and jumpstarting a new industry in the transport sector,” Marcos said.

Each unit of e-trike, which will run on rechargeable battery, will be offered to LGUs under a lease to-own deal.

The $300 million project has the support of the Asian Development Bank with the goal of replacing 100,000 gasoline-run tricycles presently used around the country.

The ADBI under its Market Transformation through the Introduction of Energy-Efficient Electric Vehicles Project funds the project.

For the ADB, supporting the project is part of its pro-environment advocacies because e-trikes are a cleaner and greener transport solution for the Philippines.

It would provide a better quality of life for tricycle drivers, the ADB said.

According to the Energy department, the five-year program will enable the government to save more than $100 million a year in avoided fuel imports.

It would also decrease annual carbon dioxide emissions by about 260,000 tons if it would replace 100,000 gasoline-fed tricycles with e-trikes.

Data from the department showed that there are roughly 3.5 million gas-fed motorcycles and tricycles are currently operating in the Philippines.

Indeed, EVs can help protect the environment by providing a better and greener solution that would displace fuel-fed vehicles.

And the solutions to reducing traffic pollution in the country are as varied as they are endless.

A carpooling platform founded in Brazil but is now in the Philippines, Tripda also envisions itself as a solution to the Philippines’ environmental woes especially the road pollution caused by traffic.

In an interview, Tripda founder Brazilian national Pedro Meduna said Tripda’s mission is to make traveling more fun and to protect the earth with one shared car ride at a time.

“Tripda connects people making similar trips so that everyone wins: the driver, the passenger and the environment. A Tripda ride is cheaper, simpler, greener, safer, faster and friendlier than other forms of travel.

Founded in 2014, Tripda is a global platform rapidly expanding throughout North America, Latin America and Asia. Currently, the company operates in 13 countries.

Essentially, Tripda is a carpooling platform that connects people who are already driving from one place to another and happen to have available seats in their car with other people who also want to go to the same destination.

Meduna said carpooling in Metro Manila can really do a lot for the environment, specifically in terms of reducing carbon emissions.

“If we consider that every person that books a ride to travel with Tripda were to drive their own cars instead of carpooling, we would need additional 130 trees in Manila to offset CO2 emissions. We calculate that up to this point Tripda saved 21 tons of additional CO2 in Philippines. Taking the same concept world-wide we would need additional 18,000 trees to offset CO2 emission, meaning that Tripda has already saved 3,000 tons of additional CO2,” he said.

Indeed, the possibilities and ways of reducing environmental harm in the country are endless. The electric vehicle industry believes EVs can provide an important solution to reducing the country’s road pollution and reliance on imported fuel.

On the other hand, foreign firms such as Tripda are also offering innovative solutions such as carpooling.

It is now up to the government to strongly support these initiatives by providing policy support in the case of Tripda or providing incentives, in the case of carpooling.

About Iris Gonzales

Iris Gonzales is a Manila-based writer. She covers the economy for The Philippine Star and blogs about human rights and development issues for the London-based New Internationalist.

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