auto huawei
A BYD electric car equipped with Huawei's HiCar system in Shanghai, China. Another Chinese tech company Xiaomi is also planning to build its own car. Image Credit: AFP

Manila: The Philippines is in the crosshairs of the world's second largest electric vehicle maker, BYD, as a location for a $500 million assembly factory due to zero tariffs on imports, a favorable supply chain, and the region's second largest access to nickel mines.

Chinese EV maker BYD (Build Your Dreams), supported by investment guru Warren Buffet, is looking into three areas, one of which being the Philippines. Vietnam and Indonesia are the other two, according to a report by Clean Technica, a new energy industry publication.

The Philippine Board of Investments (BOI) revealed in January that BYD is interested in putting a facility in the Asian country, but also stated that Vietnam and Indonesia are competing for the same location.


Rumours unfounded

Previous rumours claiming that the Chinese EV assembler had already chosen the Philippines were unsubstantiated, while the BOI was already actively supporting BYD in its hunt for a location.

The Philippines' BOI is said to be actively aiding BYD in its quest for a potential location for its multibillion-peso assembly plant. BYD representatives visited the Philippines in the end of 2022 with the intention of establishing an EV assembly plant.

BYD, the world's biggest EV maker, which also supplies batteries to Tesla, is one of the companies being considered for generous tax incentives by Manila. In 2022, BYD sold more than 1.82 million EVs.

In February, BYD recorded a total monthly sales of 193,655 "new energy vehicles", a year-on-year growth of 112.6%.

Several EV brands are also on the list of the Fiscal Incentives Review Board (FIRB), a government body led by the Philippines' Department of Finance (DoF) and co-chaired by the Department of Trade and Industry (DTI). Other high-level agencies also include the Department of Budget and Management (DBM), the National Economic and Development Authority (NDA), and the Office of the President.

Zero tariff incentives

Its job is to coordinate authorities that offer tax breaks to corporations, particularly large-scale projects.

CleanTechnica cited "sources" at the BOI as saying there's a greater interest by BYD to locate in the country after examining in detail the particulars of the ease of doing business.

A new law, known as the  Electric Vehicle Industry Development Act (EVIDA) of the Philippines, was initially intended to increase local vehicle consumption by enticing buyers with incentives, like  free parking and vehicle registration benefits. It has also encouraged importers to consider the Philippines as a destination for its products, or even local assembly.

EVIDA, which became a law in April 2022, provides for zero tariff regime for companies or entities involved in the installation and maintenance of EV charging stations.

The Executive Order (EO) 12 signed in January by President Ferdinand "Bongbong" Marcos Jr, has reduced tariff rates on EV imports to zero.

Asean market

As of 2020, trade between countries within the Association of Southeast Asian Nations (Asean) is virtually tariff-free, with tariffs on 98.6% of products fully eliminated under the ASEAN Trade in Goods Agreement (ATIGA).

The ATIGA comprises several new elements to ensure the realisation of free flow of goods within ASEAN, including the following: tariff liberalisation, removal of non-tariff barriers, rules of origin, trade facilitation, customs, standards and conformance, and sanitary and phytosanitary measures.