The Philippines is falling behind its neighbors in the Southeast Asian region in adopting electric vehicles (EV). According to a 2020 study, 45% of Philippine drivers surveyed stated that they are considering an electric vehicle for their next car purchase within three years. This choice is driven by the environmental impact of owning EVs, with more motorists becoming aware of the country’s vulnerability to the effects of climate change.
In August, the Department of Energy (DOE) began a series of public consultations for the development of the Philippine EV roadmap. This program aims to support the expansion of the Philippines’ electric vehicle market, and the government believes this is the right period to accelerate EV adoption in the country.
What are the challenges to electric vehicle adoption in the Philippines, and how can stakeholders push for its acceleration? We explore current initiatives to develop the EV market in the country and opportunities that other key industries can leverage.
According to the Philippines’ Land Transportation Office (LTO), there were 11,950 electric vehicles registered with the agency between 2010 and 2019. In this period, cars, sport utility vehicles (SUV), and utility vehicles, made up only 7.5% of registrations, around 896 units.
This is very low compared to sales in countries like Thailand, which reached almost 800,000 units in 2020. Creating an EV ecosystem in the Philippines is also challenging, and consumer uptake cannot increase in the current market environment.
Low technology utilization and lack of infrastructure for EVs are among the concerns of motorists, hampering the acceptance of electric vehicle innovations in the Philippines. While the intent to espouse more sustainable means of transport in the country is present, the lack of proper incentives, financing options, and EV model distribution systems in the Philippines are not conducive for the EV market’s growth.
To address these issues, the Philippine government must enact policies that will provide subsidies for electric vehicle owners. Production can also be ramped up in the country through tax cuts and incentives for manufacturers.
Local companies with strong sustainability programs have already transitioned to EVs for their vehicle fleets. Meralco, an electric power distribution company, launched their Green Mobility Program in 2020 and has successfully converted their entire fleet in the National Capital Region to electric vehicles. This program also included the installation of five fast chargers in strategic locations, and the number is expected to rise by early 2023.
Investors that can support the transition to EVs or strengthen the country’s EV value chain will find that motorists are looking for opportunities to choose green mobility options, especially given the rising prices of fuel. The electric vehicle market in the Philippines is ready for specialized offerings, such as compact EVs for short trips and city driving.
These models will not require charging stations, as home charging will be sufficient. Once policies for lower tariffs and incentives for buyers are enacted, the EV market will finally see growth and the Philippines can keep up with its Southeast Asian neighbors in EV adoption.
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