The Philippines Is One Of 3 Locations Considered For BYD’s Southeast Asia Expansion

Zero tariff on importations, a favorable supply chain, and the second largest access to nickel deposits in the region puts the Philippines in the bullseye of the world’s second largest electric vehicle maker, BYD, as a location for an assembly plant estimated to cost $500 million.

The Philippines is one of three locations that BYD is scouting. The other two are Vietnam and Indonesia.

Last January, the Philippine Board of Investments (BOI) announced BYD’s interest in locating a plant in the country, but also said Vietnam and Indonesia are competing for the same space. Earlier reports citing that the Philippines was already the choice of the Chinese EV assembler were not substantiated, though the BOI was already actively assisting BYD in its search for a possible location to locate its multi-billion-peso assembly plant. At the end of 2022, BYD officials visited the Philippines interested in building an EV assembly plant.

BYD is one of several EV brands under scrutiny Fiscal Incentives Review Board (FIRB), an inter-agency body led by the Philippine Department of Finance (DoF) and co-chaired by the Department of Trade and Industry (DTI) collaborating with the Department of Budget and Management (DBM), the National Economic and Development Authority (NDA) and under the Office of the President. Its work is coordinating agencies to grant tax incentives to businesses specially for large scale projects.

Last weekend, CleanTechnica sources at the BOI confirmed a greater interest by BYD to locate in the country after examining in detail the particulars of the ease of doing business here.

The country’s Electric Vehicle Industry Development Act (EVIDA), initially designed to increase the uptake of local vehicle consumption, wooing buyers with incentives, including free parking and vehicle registration perks, has also worked to encourage importers to look at the Philippines as destination of its products and even assembly.

EVIDA has another component that favors setting up and maintaining charging stations, importation of charging station equipment, and vehicle purchase incentives. However, it was not until the issuance of Executive Order (EO) 12 reducing the tariff rates on battery-electric vehicles (BEV) to zero for a period of five years.

Philippine President Ferdinand Marcos Jr. signed it into law last January 13, starting a frenzy of EV importations and setting up sales outlets or distributorships of mostly Chinese-made electric cars. The law temporarily cuts the most-favored nation (MFN) tariff rates on completely built up (CBU) electric vehicles, but excludes hybrids from the mix.

Nickel reserves in Indonesia and the Philippines account for nearly half the world’s nickel production. Thus, a battery manufacturing plant initiated by Indonesia Battery Corp (IBC) in a consortium led by South Korea’s LG Group will soon be operational. An initial investment of about US$1.2 billion was put in the project, which is expected to operate by the second half of this year and directly source its nickel requirements in the region. Battery makers use lithium iron phosphate in its EV batteries, and BYD, being the largest battery maker in the world, is said to be seriously considering the Philippines for its raw material source.

BYD is already present in the Philippines successfully selling its EVs to a niche but moneyed market. The car distributorship has not relented in its promotion of EVs, and is leading other companies in terms of mix and availability.

Its offerings cover the whole spectrum of vehicle segments and pricing is very competitive to ICE models in each class. However, the lack of a charging station ecosystem is hampering the take up of EVs, but BYD pioneered in setting up charging stations in the areas in which it is most popular.

In 2022, BYD sold a total 911,141 battery-electric vehicles. Comparatively, Tesla produced nearly 1.37 million vehicles and sold 1.31 million of these in the same period. This 47.2% increase in sales was driven to a large extent by the Model 3. BYD, on the other hand, produced a total over 1.85 million plug-in electric cars (BEV and PHEV) globally, which is triple the increase versus 2021 sales of over 597,000 cars, and nearly 400,000 more than Tesla.


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