Electric Vehicle Industry Act - ALBURO ALBURO AND ASSOCIATES LAW OFFICES

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Also, the matters contained in the following were written in accordance with the law, rules, and jurisprudence prevailing at the time of writing and posting, and do not include any future developments on the subject matter under discussion.

AT A GLANCE:

This Act shall apply to the manufacturer, assembler, importation, construction, installation, maintenance, trade and utilization, research and development, and regulation of electric vehicles, charging stations and related equipment, parts and components, batteries, and related support infrastructure.

In recent years, we have continuously seen and felt the serious effects of global warming and climate change. According to records, 2024 was considered as the hottest year.

Therefore, to address the issue of climate change, our lawmakers deemed it timely to enact Republic Act No. 11697 or the Electric Vehicle Industry Act (EVIDA), which took effect in April 2022. By passing this law, the lawmakers aim to initiate and sustain a movement towards more environmentally-friendly options to alleviate the effects of climate change.

The law was enacted in line with the State’s policy to:

(a) Ensure the country’s energy security and independence by reducing reliance on imported fuel for the transportation sector;

(b) Provide an enabling environment for the development of electric vehicles including options for micromobility as an attractive and feasible mode of transportation to reduce dependence on fossil fuels;

(c) Promote and support innovation in clean, sustainable, and efficient energy to accelerate social progress and human development by encouraging public and private use of low emission and other alternative energy technologies;

(d) Protect the health and well-being of the people from the hazards of pollution and the greenhouse effect;

(e) Safeguard and improve the integrity, reliability, and stability of the country’s electric power grid by optimizing the location of energy sources relative to demand;

(f) Promote inclusive and sustainable industrialization while recognizing the role of the private sector in order to support the transition to new technologies, generate jobs, spur small and medium enterprise growth, attract investments, grow globally competitive and innovative industries, and upgrade the country’s participation in regional and global value chains, consistent with the Philippine Development Plan and the country’s international obligations under the United Nationals Sustainable Development Agenda;

(g) Generate employment opportunities for our local skilled workforce to sustain their livelihood;

(h) Protect and safeguard the country’s cultural heritage through the Philippine transportation system, which remain an underlying factor in progress and innovation; and

(i) Recognize the role of local government units (LGUs) as competent partners of the national government in the smooth transition to this innovation by providing them capacity-building support.

DEFINITIONS OF ELECTRIC VEHICLES

An electric vehicle (EV) refers to a vehicle with at least one (1) electric drive for vehicle propulsion. For purposes of this Act, it includes a BEV, hybrid-electric vehicle, light electric vehicle, and a plug-in hybrid-electric vehicle.

A battery electric vehicle (BEV) refers to an electrically propelled vehicle with only a traction battery as power source for vehicle propulsion.

A hybrid-electric vehicle (HEV) refers to a vehicle with both a rechargeable energy storage system and a fueled power source for propulsion.

Light electric vehicles refer to EVs such as electric scooters, electric bicycles, electric personal transport, and other similar vehicles weighing less than fifty kilograms (50 kg).

A plug-in hybrid-electric vehicle refers to an HEV with rechargeable energy storage system that can be charged from an external electric energy sources.

ROLE OF GOVERNMENT AGENCIES

Section 5. Government Regulations. – All government regulations related to the EV industry shall be formulated to facilitate the creation of an enabling environment for competitive, equitable, and non-discriminatory private sector participation, with preference for indigenous technologies, to attain the long-term goal of energy security, energy sufficiency, and stable energy prices.

Section 6. Comprehensive Roadmap for Electric Vehicle Industry (CREVI). The CREVI refers to a national development plan for the EV industry with an annual work plan to accelerate the development, commercialization, and utilization of EVs in the country comprised of the following four (4) components;

(a) EVs and charging stations component which includes:

(1) Development of standards and specification of EVs and charging stations,

(2) Industry promotion of EVs,

(3) Designation of dedicated parking slots for EVs, and

(4) Construction or installation of charging stations in dedicated parking slots and dedicated spaces,

(b) Manufacturing component which includes:

(1) Promotion and development of the local manufacturing of the EV industry, and

(2) Manufacturing standards for EVs, batteries and facilities including recycling facilities, parts and components, and charging stations and related equipment,

(d) Human resource development component which includes skills and capacity-building of needed personnel.

The CREVI shall be incorporated in the Philippine Energy Plan and the National Transport Policy.

Section 7. Role of the Department of Energy. – The DOE shall be the primary agency tasked with the promotion of the adoption of EVs and the development of charging stations and related equipment. Towards this end, the DOE shall:

(a) Promulgate uniform and streamlined rules, regulations, and standards on the use, operations, and maintenance of charging stations and related equipment, in coordination with other concerned agencies, to include the accreditation of charging station service providers and requirements imposed by DUs on charging stations and charging station service providers;

(b) Convene within two (2) months from the effectivity of this Act, a technical working group comprised of the DOE, DOTr, Department of Trade and Industry (DTI), Department of Science and Technology (DOST), Department of Environment and Natural Resources (DENR), Department of Public Works and Highways (DPWH), Department of the Interior and Local Government (DILG), and the National Economic and Development Authority (NEDA) to ensure harmonized policies and consistent and streamlined standards and regulations in the EV industry. The members of the technical working group shall fully cooperate and collaborate in the harmonization of policies, including the different components of the CREVI and the creation, promulgation, and streamlining of standards and regulations in the EV industry. The technical working group shall be chaired by the DOE. It shall meet regularly or as necessary. The technical working group may also invite public and private stakeholders as resources persons;

(c) Develop and update the EV and charging stations component of the CREVi under Section 6(a) of this Act in coordination with the DOTr, and in consultation with the LGUs and other relevant national government agencies (NGAs). The component shall be completed not later than the 30th of May of every year;

(d) Develop and update the EV and charging stations component of the CREVI by consolidating its various components pursuant to Section 6 of this Act. The CREVI shall be made publicly available on its website not later than the 30th of September of every year;

(e) Implement, together with the DOTr and DTI, plans and programs pursuant to Section 7(a) of this Act trough information, education, communication, and demonstration campaigns consistent with the CREVI;

(f) Accredit charging stations service providers, and make available to the public on its website an annual inventory of all accredited charging station service providers and a list of all commercial use charging stations in the country;

(g) Require DUs to submit their respective charging infrastructure development plans as part of their Distribution Development Plans (DDPs) not later than the 30th of August of every year;

(h) Enforce compliance with the installation of charging stations as required under Section 18 and 19 of this Act;

(i) Enforce compliance with the unbundling of charging fees by commercial use charging stations;

(k) Consolidate and centralize data from the Energy Regulatory Commission (ERC), DTI, DOTr, DENR, Land Transportation Office (LTO), Land Transportation Franchising and Regulatory Board (LTFRB), LGUs, and other relevant NGAs insofar as EVs and charging stations are concerned for every access of the public; and

(l) Perform all other acts that are analogous to the foregoing, which are necessary and incidental to accomplish the policy objectives of this Act.

Section 8. Role of the Energy Regulatory Commission. – In addition to its functions under Republic Act No. 9136, otherwise known as the “Electric Power Industry Reform Act of 2001”, and other existing laws, the ERC shall:

(a) Regulate the rates charged by DUs on all charging stations, taking into account, among others, the utilization of the charging station, the promotion of efficiency, the rate-setting methodology of the ERC for DUs pursuant to Section 43 of Republic Act No. 9136, the unique requirements of charging stations, and its effect on the DU’s demand profile and distribution system;

(b) Promulgate uniform and streamlined rules and requirements for self-generating charging stations and centralized vehicle-to-grid facilities; and

(c) Perform all other acts that are analogous to the foregoing, which are necessary and incidental to accomplish the policy objectives of this Act.ℒαwρhi৷

Section 9. Role of the Department of Transportation. – The DOTr shall be the primary agency tasked with the development of EV demand generation, and the regulation and registration of EVs, as well as franchising of EVs used for public transportation. Towards this end, the DOTr shall:

(a) Coordinate with the DOE in the preparation of the EV and charging stations component of the CREVI pursuant to Section 7(c) of this Act;

(b) Promulgate uniform and streamlined policies, rules and requirements through its attached agencies on the use, operations, inspection, and registration of EVs, as well as franchising of EVs used for public transportation: Provided, That light electric vehicles which shall be for exclusive private use shall not be required to register with the DOTr and its attached agencies;

(c) Ensure that the CREVI shall form part of and be consistent with a comprehensive sustainable transportation plan established by the government;

(d) Coordinate with the National Commission for Culture and the Arts (NCCA) on the preservation of the artistic design of traditional jeepneys for EVs intended for use for public transportation: Provided, That as far as practicable, all manufacturers and importers of EVs intended for use for public transportation shall coordinate with the DOTr and the NCCA to emulate the artistic design of the traditional jeepneys to preserve the country’s cultural heritage;

(e) Conduct information, education, communication, and demonstration campaigns, together with the DOE and DTI;

(f) Mandate the inclusion of green routes in the LTFRB route plans;

(g) Incorporate EVs in the PUV Modernization Program;

(h) Develop a program for a just transition of the gradual phase-in of electric PUVs, in coordination with other relevant public and private stakeholders;

(i) Conduct capacity-building activities for affected PUV operators and drivers in coordination with the DOE and DTI; and

(j) Perform all other acts that are analogous to the foregoing, which are necessary and incidental to accomplish the policy objectives of this Act.

Section 10. Role of the Department of Trade and Industry. – The DTI shall be the primary agency tasked with the promotion and development of the ocal manufacturing of the EV industry. Towards this end, the DTI shall:

(a) Through the Bureau of Philippine Standards, formulate and review regularly relevant Philippine National Standards for the EV industry to ensure consumer protection and trade facilitation taking into consideration developments in trade and latest technology, including safety, quality, and environmental advances in the EV industry;

(b) Regulate the quality and safety of parts and components by implementing relevant standards to ensure product quality and consumer protection;

(c) Develop and update regularly the manufacturing component of the CREVI, in coordination with the DOE, DOTr, Board of Investments (BOI), and other relevant NGAs pursuant to Section 6(b) of this Act. The manufacturing component shall be submitted to the DOE not later that the 30th of May of every year;

(d) Develop and update regularly the human resource development component of the CREVI, in coordination with the Department of Labor and Employment (DOLE), Technical Education and Skills Development Authority (TESDA), Commission on Higher Education, and other relevant NGAs pursuant to Section 6(d) of this Act. The human resource development component shall be submitted to the DOE not later than 30th of May of every year;

(e) Develop, through the BOI and in coordination with other relevant NGAs, the EV incentive strategy pursuant to Section 24(a) of this Act;

(f) Develop, in coordination with the DENR, a program for the adoption of manufacturing and recycling standards for EV batteries and facilities; and

(g) Perform all other acts that are analogous to the foregoing, which are necessary and incidental to accomplish the policy objectives of this Act.

Section 11. Role of Local Government Units. – In addition to its functions under existing laws, LGUs shall:

(a) Include green routes in their respective Local Public Transport Route Plans consistent with the National Transport Policy;

(b) Issue Certificate of Inspection to charging stations;

(c) Provide segregated lanes for light electric vehicles in all major local and national roads, in coordination with the DPWH: Provided, That such lanes may be integrated with bicycle lanes;

(d) Submit to the DOE not later than 30th of January of every year the list of all commercial use charging stations in their respective localities;

(e) Issue permits for the construction or renovation of buildings or establishments pursuant to the guidelines promulgated by the DPWH in Section 12 of this Act; and

(f) Ensure compliance of public and private buildings and establishments with Section 18 of this Act.

Section 12. Role of the Department of Public Works and Highways. – In addition to its functions under existing laws, the DPWH shall establish guidelines on the following:

(a) Construction or installation of charging stations and other related equipment in buildings and other establishments; and

(b) Issuance of permits for the construction or renovation of buildings or establishments pursuant to Section 17 of this Act.

Section 13. Role of the Department of Science and Technology. – In addition to its functions under existing laws, the DOST shall:

(a) Develop and update regularly the research and development component of the CREVI, in consultation with the DTI and other relevant NGAs pursuant to Section 6(c) of this Act. The research and development component shall be submitted to the DOE not later than the 30th of May of every year; and

(b) Provide technical and financial support for the conduct of localized transport studies by accredited state universities and colleges at the local government level.

Section 14. Role of the Department of Environment and Natural Resources. – In addition to its functions under existing laws, the DENR shall:

(a) In consultation with the DOE, DOTr, DTI, and other public and private stakeholders, promulgate rules and guidelines on the recycling and disposal of EVs, charging stations and related equipment, parts and components, and batteries consistent with the provisions of Republic Act No. 6969 or the “Toxic Substances and Hazardous and Nuclear Wastes Control Act of 1990” and related issuances;

(b) In coordination with the DOTr, include EVs in the comprehensive air pollution management and control program in accordance with Republic Act No. 8749, otherwise known as the “Philippine Clean Air Act of 1999”; and

(c) In coordination with the DOE, establish guidelines for the accurate characterization, disposal, and handling of wastes involving EVs, charging stations and related equipment, parts and components, and batteries.

Section 15. Role of the National Economic and Development Authority. – In recognition of the importance of the role of the EV industry in national development, the NEDA shall include the CREVI in the Philippine Development Plan.

NON FISCAL INCENTIVES

SEC. 25. Non-Fiscal Incentives. – The following non-fiscal incentives shall remain in force for eight (8) years from the effectivity of this Act:

(a) For EV users:

(1) Priority registration and renewal of registration, and issuance of a special type of vehicle plate by LTO;

(2) Exemption from the mandatory unified vehicular volume reduction program, number-coding scheme, or other similar schemes implemented by the Metropolitan Manila Development Authority, other similar agencies, and LGUs;

(3) Expeditious processing by the LTFRB of applications for franchise to operate, including its renewal, for PUV operators that are exclusively utilizing EVs; and

(4) Availment of TESDA Training Programs on EV assembly, use, maintenance, and repair for its employees;

(b) For EV Manufacturers and importers, the expeditious processing by the Bureau of Customs on the importation of parts and components for the manufacture and assembly of EVs; and

(c) For EV manufacturers, the government shall allow expert foreign nationals to be employed under a form of technology transfer agreement, subject to the guidelines that shall be issued by the DOLE, the Professional Regulatory Commission, and the DTI.

FINANCIAL ASSISTANCE

Section 26. Financial Assistance. – Government financial institutions and other financial institutions, in accordance with and to the extent allowed by the enabling provisions of their respective charters or applicable laws, are encouraged to provide concessional financial packages for entities engaged in the activities mentioned in Section 24 of this Act, and preferential interest rates and payment scheme on consumer loans for the acquisition of EVs and charging stations.

The Bangko Sentral ng Pilipinas shall encourage banks to lend a certain percentage of their portfolio to EV, charging stations, and battery manufacturers, assemblers, and end users: Provided, That financing packages for EV fleets shall be prioritized and the procedure shall be streamlined.

PENALTIES

Section 28. Penalties. – A fine ranging from a minimum of Fifty thousand pesos (P50,000.00) to a maximum of Five hundred thousand pesos (P500,000.00), and may include suspension or revocation of permits issued, if applicable, shall be imposed upon any reason, both natural and juridical, who violates Section 6, 16, 17, 18, 19, 20, 21, 22, and 23 of this Act and all rules, regulations, and standards promulgated pursuant to Sections 7, 8, 9, 10, 11, 12, 13, 14, and 15 of this Act: Provided, That this is without prejudice to the penalties provided under existing laws, rules, and regulations prescribed by other concerned agencies. The DOE, DOTr, and DPWH shall, in coordination with the DTI and the DILG, issue appropriate rules and regulations on the imposition of these fines and penalties.

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Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries regarding legal services, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/ 0917-5772207/ 09778050020.

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