The Philippine government has introduced measures to promote local EV and hybrid vehicle manufacturing after President Ferdinand Marcos Jr. signed Executive Order (EO) 121, establishing the Electric Vehicle Incentive Strategy (EVIS) Programme.

The policy provides up to PHP 60 billion (US$ 97.4 million) in incentives to encourage automotive companies to manufacture electric and hybrid vehicles, battery technologies and spare parts locally. The programme is intended to support the production of electrified vehicles and related components in the Philippines.

Local manufacturing

The Philippines has traditionally relied on imported finished vehicles, with much of the engineering and manufacturing activity taking place outside the country. EO 121 provides incentives to automakers that establish local production operations for hybrid vehicles, plug-in hybrids, battery-electric vehicles and commercial components.

Mitsubishi Motors Philippines Corporation (MMPC) is considering a PHP 7 billion investment under the EVIS Programme. According to MMPC Chairperson Noriaki Hirakata, the company is considering establishing a local EV battery assembly facility.

Potential impact on EV and hybrid prices

Local manufacturing of vehicles and batteries could reduce logistics, tariff and tax costs, with some of these savings potentially being passed on to consumers. Authorities project that EV prices could decline by 6%-12% from current levels once domestic EV production is fully operational.

The EVIS Programme is also expected to increase local access to spare parts and after-sales services, which could affect EV maintenance costs.

Potential impact on used petrol vehicles

The expansion of locally manufactured EVs and hybrids could affect the secondary market for conventional internal combustion engine (ICE) vehicles. As EV and hybrid prices decline and availability increases, consumers could have more alternatives to petrol-powered vehicles. This could reduce demand for older petrol-powered vehicles and put downward pressure on their resale values.

Changes in market demand could therefore affect the future resale value of existing petrol-powered vehicles. However, the extent of any impact will depend on the pace of EV and hybrid adoption, local production and vehicle pricing.

Electric vehicle incentive strategy explained

What is the Electric Vehicle Incentive Strategy (EVIS) Programme?

The EVIS Programme is a government initiative established through Executive Order 121 by President Ferdinand Marcos Jr. It provides up to PHP 60 billion to encourage the local manufacturing of EVs and hybrid vehicles.

How will EO 121 affect EV prices?

Authorities expect EV prices to decline by 6%-12% once local EV manufacturing is fully operational.

Are carmakers already investing under the programme?

Mitsubishi Motors Philippines Corporation (MMPC) is considering an investment of at least PHP 7 billion to potentially establish a local battery assembly facility for hybrid and electric vehicles.

Does the EVIS Programme cover only fully electric vehicles?

No. The programme covers locally manufactured battery-electric vehicles, hybrids, plug-in hybrids and fuel-cell vehicles, as well as related technologies and components.

How could the programme affect petrol vehicle resale values?

Greater availability of locally manufactured and potentially lower-priced EVs and hybrids could reduce demand for older petrol-powered vehicles, potentially putting downward pressure on their resale values. The extent of the impact will depend on the development of the local EV market.

Motorist Philippines

Motorist Philippines provides car-selling services, including free, data-driven car valuations based on market conditions, access to a nationwide network of verified buyers and cash transactions.

The company also provides services intended to facilitate vehicle sales, including valuation and buyer access. Its services are available to vehicle owners seeking to sell their vehicles as the Philippine automotive market develops alongside the implementation of the EVIS Programme.