Published July 22, 2017, 10:01 PM By Myrna M. Velasco
The foray of the Aboitiz group into electric vehicles (EVs) via Singapore-incorporated QEV Technologies will be a “grand plan” of 50,000-EV fleet rollout, but it will also require massive government financing or subsidy hovering at P25 billion to P30 billion.
During the media launch of its EV venture and the presentation of the QEV-converted Sarao e-jeepney, Aboitiz Group Chairman Endika Aboitiz disclosed that they will be seeking government financing for the conversion kits of the EVs with targeted deployment of 10,000 units annually for the next five years.
According to Aboitiz, these EVs will be powered by electricity generated by the renewable energy (RE) plants of the Aboitiz Group, which he has been bargaining to company CEO and his brother Erramon Aboitiz to be given to them at discount, or “on half CSR (corporate social responsibility), half capitalism” platform.
QEV Technologies Spanish partner Enrique Banuelos said the cost of conversion is pegged at $10,000 per unit – and for the 10,000 units per year, that will be a bailout of $100 million annually from the government coffers, considerably done in a subsidy form.
That will then translate to $500-million subsidy over five years, or roughly R25 billion; although Project Manager Audrey Penaranda later qualified that the cost conversion could range in the R500,000 to R600,000 per unit; entailing then that the required government financing for the QEV venture would be R5 billion to R6.0 billion annually. She said the government could possibly earmark that amount from a fraction of its “six taxes” collection.
But such state-underpinned mode of financing need to be judiciously studied by the government economic managers especially on how it could go within the required procurement processes – primarily, if the financing would be given to a private sector player without the benefit of bidding or competitive selection.
QEV Technologies executives similarly noted that there will be “no monetary payback” to the government, as the drivers will not be required to shoulder or recompense any portion of the conversion cost from their daily earnings.
The rollout, according to QEV, will be along Ayala and SM Malls; and pioneering ventures in Shell gas stations. The company is also pursuing collaboration with Manila Electric Company (Meralco) on the EV program.
QEV and collaborator-firms are seen chipping in cost for the setting of the infrastructure support, primarily on the charging stations.
In separate interviews with Energy Secretary Alfonso G. Cusi and Finance Secretary Carlos Dominguez during the event, they indicated that QEV Technologies has been lobbying for fiscal incentives – but these are still under discussion with the Board of Investments.
On the financing part, Dominguez emphasized that it is being studied and anchored on the carbon emissions that public utility vehicles have been spewing out into the atmosphere.
“If it is justifiable, we have to consider some kind of incentive… but we’re ready to finance but we will determine what kind of incentive we will provide,” Dominguez said.
He added “we’re still discussing it, because we don’t know the exact conversion… but considering that one jeepney spews 26 tons of carbon every year in the air, it might be worth it, so we will be doing a calculation.”
Meanwhile, the energy department indicated that ‘test protocols’ on EVs are still being crafted, so there’s no outcome that can vouch yet the operational viability of the QEV-converted Sarao jeep in the Philippine thoroughfares.