The Rundown: Taiwanese Airlines Record Profits, EV License Tax Exemption, and Manufacturing Sector Maintains Solid Growth

A weekly snapshot of Taiwan business news stories brought to you by CommonWealth and AmCham Taiwan’s TOPICS

China Airlines and EVA Air quarterly profits surge, plan to resume Taipei-London flights in December 

Rising air cargo prices and volumes drove China Airlines Ltd.’s (CAL) third-quarter revenue to skyrocket, reaching NT$34.474 billion – an annual increase of 30% – and a net profit of NT$2.917 billion. In terms of operating income and profit, this was CAL’s best performing quarter since the onset of the COVID-19 pandemic, reversing its loss of NT$0.25 per share in the first half of the year in one fell swoop.

EVA Airways Corp. also announced its third-quarter financial report, with consolidated revenue of NT$25.814 billion – an annual increase of 40.3%. Its net profit was NT$1.484 billion, which turned a loss into profit compared with the same period last year. Its net profit per share was NT$0.29, a record high since the second quarter of 2019.

The Central Epidemic Command Center (CECC) announced that from November 6, that India, the UK, and Myanmar would be removed from its “key high-risk countries” list. China Airlines and EVA Airways subsequently announced plans to resume flights between Taipei and London as soon as December.

Cabinet approves bill to extend electric vehicle license tax exemption

Taiwan’s Cabinet approved on Thursday, November 4, a draft amendment to the Vehicle License Tax Act extending the exemption for electric vehicles (EVs) until December 31, 2025. EVs are currently exempted from license plate tax and excise tax until the end of the year.

The Ministry of Finance estimates that the combined output value of electric vehicles will reach NT$110.7 billion in the next four years, employing 25,228 people, with the number of EVs surpassing 357,445.

The amendment will reduce overall tax revenue by about NT$5.13 billion, according to estimates by the Ministry of Finance. Still, the Taxation Office noted that government expenditures to reduce pollution caused by fueled vehicles are as high as NT$8.606 billion, meaning it is still beneficial to transition to EVs.

Manufacturing sector retains fast growth pace

The Taiwan Institute of Economic Research (TIER) presented on November 3 the September composite index for the manufacturing sector. Due to steady economic growth internationally, economic data such as exports and export orders continued to show double-digit growth. The September composite index for the manufacturing sector was 16.27 points, remaining just inside the “yellow-red” range for the fifth consecutive month, reflecting fast growth.

However, TIER noted that COVID-19, coupled with lack of containers and port congestion, has caused transportation costs to soar, which has brought uncertainty to supply chain stability. Factors such as the pandemic, maintenance of high-end raw material prices, and China’s power rationing also affect demand, raw material input, and costs.

This edition was translated from the original Chinese by Julia Bergström