THE deal signed by Ayala-controlled Integrated Micro-Electronics, Inc. (IMI) and Zero Motorcycles has the potential to boost the Philippines’ status as an electric vehicle (EV) manufacturing hub, the Department of Trade and Industry (DTI) said.
Zero Motorcycles, a California company, and IMI signed their agreement in the US on May 1, which covers the production of electric motorcycles and battery and motor assemblies. The signing was carried out during an official visit by President Ferdinand R. Marcos, Jr. to the US.
“With this investment, we will be better positioned as an export manufacturing hub for electric batteries and vehicles in the region. This partnership… is a testament to the expertise and capabilities of our manufacturing sector,” Trade Secretary Alfredo E. Pascual said in a statement on Tuesday.
“We thank Zero Motorcycles for their trust. This is considered a historic agreement because it is a pioneering activity involving high-end electric batteries, motors and motorcycle assembly,” he added.
Under the agreement, Zero Motorcycles will subcontract its production operations and electric motorcycle and battery and motor assembly to IMI. The project is expected to generate $65 million in annual revenue and $250 million worth of investment over the next five years. The partnership is also expected to result in the creation of at least 200 new jobs.
IMI and Zero Motorcycles are expected to begin mass production by June 2023 at an assembly facility in Laguna for export to Europe, Asia, and other markets.
“IMI is expected to provide the needed manufacturing facility in the Philippines. Currently, IMI’s headquarters is located in Biñan, Laguna, where they operate as an original equipment manufacturer (OEM) facility in (industries like) automotive, industrial, medical, telecommunications infrastructure, storage devices, and consumer electronics,” the DTI said.
The DTI said it aims to reduce the cost gap between internal combustion engine vehicles and EVs to grow the market following the passage of Republic Act No. 11697 or the EV Industry Development Act.
“The law provides for the creation of the Electric Vehicle Incentive Strategy (EVIS) that will provide more incentives for EV-related investment to help establish an enabling environment for the sector,” the DTI said.
In a disclosure to the stock exchange, IMI said it narrowed its attributable net loss to $749,000 in the first quarter, compared to a loss of $1.97 million a year earlier.
The company posted a 4% increase in revenue to $346.83 million in the first quarter on the back of rising prices.
“We will be launching the production of multiple EV-related projects over the next two years and we continue to look for opportunities to secure market share in the EV space through our robust sales pipeline. We believe that our partnership with Zero Motorcycles, a market leader in electric motorcycles based in California, will solidify our position as a partner of choice in this emerging technology,” IMI President Jerome S. Tan said.
The EV Association of the Philippines (EVAP) said in a statement on Tuesday that it supports zero tariffs on electric motorcycles, but not e-jeeps and e-trikes, which have local manufacturers and assemblers.
EVAP President Edmund A. Araga clarified that the group supports the removal of tariffs for e-motorcycles as it would make EVs more affordable, as well as help lower greenhouse gas emissions.
The group added that zero tariffs on e-motorcycles would create a more sustainable transportation system.
The EVAP clarified its position following a statement from Mr. Pascual on April 24 that the EVAP and the Motorcycle Development Program Participants Association had sought the omission of e-jeepneys, e-tricycles, and e-motorcycles from the zero-tariff rules.
Under Executive Order (EO) No. 12 signed by Mr. Marcos in January, tariffs for certain EVs were reduced to zero for five years.
The EO covers cars, buses, vans, trucks, kick scooters, self-balancing cycles, bicycles, and pocket motorcycles with power not exceeding 250 watts and with a maximum speed of 25 kilometers per hour. Product lines excluded from the EO such as electric motorcycles are still subject to the 30% tariff rate. — Revin Mikhael D. Ochave