Last updated: 10 October 2016
Words I BERTRAND O. PESAYCO I Photos I REVOLI S. CORTEZ
With Japanese technology and Filipino skills combined, BEMAC hopes to make the roads emissions-free, one e-trike at a time.
At a vehicle plant in an industrial area in Carmona, Cavite, I found myself looking at stacks of steel chassis that were awaiting their turn at the start of a short assembly line the length of a swimming pool.
The assembly line is simple but rudimentary: no sparks fly from welding and no paint spray waft the air. Assembly merely involves parts that come ready to be bolted together from the chassis and the fiber-reinforced plastic panels, to the axle, wheels and electrical system. At the end on the line emerges a shiny e-trike: a three-wheeled passenger vehicle that runs on a bank of batteries. And this crucial power source is expected to change the way Filipinos commute.
The company making these e-trikes is BEMAC Electric Transportation Philippines, Inc., owned by Uzushio Electric Co., Ltd., an electric company in Japan. BEMAC is under contract to make 3,000 e-trikes for the Department of Energy, funded by the Asian Development Bank (ADB) at a cost of $30 million. With this project, ADB, together with the Philippine government, hopes to start replacing some 3.5 million noisy, smoke-belching tricycles that run on fossil fuel. The project targets to produce 100,000 units of e-trikes.
A global drive
Making an e-trike is truly global in scope. The lithium-ion batteries, electronic parts, electric motor, steel axle, and tires come from Japan and other countries, while the steel chassis, fiberglass body, and cushion are from the Philippines. BEMAC has partnered with Almazora Motors Corporation, which has been making quality trucks, buses, and Asian Utility Vehicles in the country since the 1900s, for the assembly of the 3,000 e-trikes.
A lot is riding on the success of the project: one is the prospect of an emissions-free country that will rely on batteries to run its most basic commute – tricycles.
But the shift won’t be easy. At P495,000 ($10,000) each — the cost of a small car — an e-trike is already out of reach for the typical Filipino tricycle driver who’s expected to trade-in a way of life he has embraced for generations. Technology carries a cost. As it is, BEMAC is already absorbing part of the cost when it brought the unit price down to win the government contract.
“We want to make the country better,” says Masato Yokoi, BEMAC assistant vice-president. “We are not purely pursuing business. If it’s business alone, we should not be doing this. We want to change the world, starting with the Philippines.”
Mr. Yokoi’s lofty dreams for the world, however, need to make commercial sense before it is able to take off. Half of the cost of the e-trike is for the batteries and electrical components alone. And battery advancement and usage in vehicles worldwide is not moving as fast as Yokoi’s vision does.
While the company is not selling directly to retail customers, it targets small and medium-scale enterprises (SMEs) and local government units that have the resources to offer livelihood opportunities to their constituents.
But does an e-trike actually make business sense for SMEs? A four-hour charge on an e-trike’s battery can make it run for up to 80 kilometers. Plugging it in a typical household outlet, a full charge costs P52.80. To run the same distance, a tricycle consumes two liters of gasoline at P80.
Mr. Yokoi cited similar e-trikes made by their Chinese and German competitors which use lead acid batteries that need to be replaced every year. While this type of battery brings down the cost of the e-trike, it proves costlier in the long run. For lead acid batteries to work, competitors have resorted to battery swapping where enterprising businesses lend out batteries for P150 fully charged. The batteries are simply swapped for a fresh set once they run out. However, this service is not regulated by the government and is subject to market whims.
Making practical sense
Trying to run the numbers with a typical tricycle driver, an e-trike proves a tough sell. Ricky Cruz, who’s been driving a tricycle at a middle-class subdivision in Parañaque City for the past 20 years, says he can put together a gas-run tricycle for P100,000. What actually places a tricycle out of reach is the cost of a franchise to operate, as LGUs have long stopped issuing lines to prevent overcrowding on the streets. Franchises can be bought from those who already own them and are willing to sell for a hefty P1 million.
“Tricycle drivers will consider an e-trike if they come with a new franchise, coupled with subsidy from the LGU to help acquire one,” says Mr. Cruz. “Until that happens, we won’t be able to afford them.”
As BEMAC silently churns out e-trikes at the Carmona plant hoping to complete the delivery of 3,000 units to ADB this year, Mr. Yokoi wishes other companies will join in.
“Delivering 100,000 e-trikes is simply too big a job for BEMAC to handle alone; it will take us 10 years (to produce the volume),” he admits. “We need more dreamers to shift to this electrical future.”
BEMAC Electric Transportation Philippines Incorporated
Bertrand O. Pesayco is chairman and chief executive officer of Writers Edge, Inc., an editorial services firm that publishes iSME.ph. Before setting up the company, he worked with various companies under the Lopez Group, and was a reporter for BusinessWorld covering the transportation, telco, and motoring beats. Aside from running a 14-year-old company together with his wife, he also pursues his passion in cardboard modelling and driving his Vespa scooter. Bitan can be reached at firstname.lastname@example.org.