9 economic benefits of using e-vehicles in PH

MANILA, Philippines – Electric vehicles are finally gaining a foothold in the local transport scene. 

Finally, public transport operators are realizing that using electric vehicles for their vehicle fleets is not only environmentally-friendly, good for the air around us, much more quiet and convenient to use, requires less maintenance, but most importantly, cheaper to operate.

With the cost of electricity to operate it being only 40% of the money you spend on fuel for the same distance traveled, you cannot go wrong with an EV. (READ: ‘One million electric vehicles in PH by 2020’)

The Electric Vehicle Association of the Philippines or EVAP was formed in 2009 not only to put together the major EV players in the country and push their EV advocacies as a group, but was also organized to secure incentives from the government.

All over the world, Electric Vehicles enjoy incentives. In Norway, the Tesla is the second most sellable car, because regular cars are charged a horrendous amount of tax, but the Tesla is excused.

In Turkey, the majority of new taxis being bought are all electric owing to the fact that, if it’s an EV taxi, they are not charged a large franchise fee by the government. 

China is the most incentivized EV industry as the government gives as much as a $10,000-subsidy for those who buy a new EV. 

In the Philippines, the EVAP is pushing for the Alternative Fuel Bill which is being championed by Senator Bam Aquino in the Senate and Congressman Mark Villar in the lower house to get incentives for Electric Vehicle Manufacturers and dealers.

Here are more reasons to support electric vehicles:

1. New jobs

EVAP estimates that 10,000 new jobs may be created, including in downstream and upstream industries, with the development of the Electric Vehicle Industry in the Philippines.

Starting with manufacturing, the manufacturing facilities now being set up by both local and foreign players will be needing local skilled workers such as welders, painters, machine operators, body makers and general vehicle assembly workers.

There will also be new jobs generated through the actual operations of the EV systems such as charging station operators, maintenance and service technicians, ETrike and EJeepney drivers, and transport operators.

This is a new, sunrise industry and the possibilities are endless.

2. More taxes for the government

EVAP estimates that with the new industry that will be established, there will be additional withholding taxes of P689.52 million starting Year 4 up to Year 9 after the signing of the Alternative Fuel Vehicles Incentives Act. 

3. Multiplier effect

The injection of more disposable income will lead to more consumer spending which will, in turn, create more incremental sales for the EV industry. The multiplier effect of the generated sales to the EV industry given a multiplier of 5 is P167.46 billion. At 1% withholding tax, the Philippine government stands to collect P1.67 billion. 

4. Carbon credits from emission reduction

With the initial deployment of 100,000 ETrikes alone, the total avoided carbon dioxide (CO2) emission is estimated to reach 355,806 tons per year. Assuming the market price of carbon credit is US$10 per ton, the country stands to gain US$3.56 million or P159.54 million per year.

5. Dollar savings from Oil Import Reduction

Assuming that 100,000 ETrikes are deployed, the dollar savings from gasoline imports would amount to P4.5 billion (90 million liters x P50/liter) or $100.41 million.

6. Savings from pollution-related health expenses

Even with a 10% penetration rate by electric vehicles in our local transport scene, the savings brought about by the reduction in pulmonary and cardio vascular diseases and premature death is P 1.79 billion ($400 million x Php 44.815 = P17.9 billion x 10%)

7. Net VAT gain on EV Sales

An estimated VAT of P1.57 billion is expected to be contributed to the government in 9 years based on the gross revenues of P33.49 billion from sales of 100,000 ETrikes and 10,000 EJeepneys.

8. VAT collection from additional energy demand

The estimated additional power demand from the deployment of ETrikes and EJeepneys for the next 9 years is 88.8 gigawatt hours. This assumes that each unit of EV consumes anywhere from 2.4 kwh to 5.6 kwh per day during battery charging and operates 300 days in a year. 

9. Net Revenue Gain with all things considered 

With the income tax gain on job generation and its multiplier effect, the credits from emission reduction, pollution-related health expenses, VAT on sales and on additional energy demand, the country stands to gain close to P10.5 billion as compared to only P320 million in foregone revenues from tax exemption if the AFV bill is approved. It’s actually a no brainer.

Now we know that there will be expected power shortages and problems by 2015 but the nice thing about EVs is that charging time can be planned and energy can be stored.

So EVs must be charged at night while you sleep and when most industries are closed and power use is low. This might even help the power companies balance their power distribution. – Rappler.com

Rommel Juan is the Vice President of Pioneer Electric Vehicle Manufacturer Phuv Inc and founding member and current president of the Electric Vehicle Association of the Philippines. He is the lead organizer of the Philippine Electric Vehicle Summit and president of eco-friendly Pinoy fastfood chain Binalot Fiesta Foods Inc.