The Philippines is undergoing a significant transformation.

The shift towards the use of electric vehicles (EVs) is accelerating, impacting mobility in the country.

With an influx of China-made EVs into the domestic automotive market, this shift may occur sooner than anticipated.

Chinese auto brands such as Foton, Geely, BYD, Hongqi, and GAC, which each produce their respective EV models, are entering a market that was previously dominated by Japanese and Western car manufacturers.

Japanese automakers were among the first to introduce green, environmentally friendly vehicles, showcasing models like the Mitsubishi Outlander, Toyota Prius, and Nissan Leaf at the Tokyo Motor Show. These vehicles contributed to the early development of the market for eco-friendly cars.

Seismic shift

According to the latest data from the Department of Trade and Industry (DTI), factors such as aggressive marketing, competitive pricing, and the continuous introduction of technology-laden vehicles have contributed to the shift towards EVs. This trend is expected to lead to the industry reaching 6.6 million units by 2030.

DTI reports a 45% increase in the number of registered EVs in the Philippines in 2024, with the percentage expected to grow as more automakers release electric cars, e-motorcycles, and electric public transport vehicles.

The Land Transportation Office estimated that there were 16 million registered vehicles in the country in 2024, although it did not specify the proportion that were EVs.

Various executive agencies, including the Departments of Transportation and Finance, are developing policies to encourage EV adoption.

To support the transition to electric mobility, safety and quality regulations for EVs are being implemented.

In a statement released in early March, the Electric Vehicle Association of the Philippines (EVAP) highlighted the need for collaboration between energy providers, mall operators, real estate developers, and local government units to expand the EV charging network.

Metro Manila currently has over 100 charging stations, with additional stations being installed in Cebu and Davao. Nationwide, there were a total of 847 charging stations last year, according to Department of Energy (DOE) data.

AC Mobility, a company under the Ayala conglomerate, plans to expand its charging network by installing 700 charging stations at 300 locations nationwide in 2025.

The sum of all parts

With the increasing number of vehicles, the demand for replacement parts, such as tyres and batteries, is also growing.

According to 2020 data from the Asia-Pacific Economic Cooperation, the automotive parts sector involves over 250 local businesses that produce and import auto parts and components.

This sector is one of the country's largest employers outside the national government, with over 67,000 workers, second only to San Miguel Corporation, which employs over 70,000 individuals.

The growth in annual vehicle sales, particularly for EVs, drives demand for automotive parts, including EV batteries.

Two critical components of battery production - nickel and cobalt - are abundant in the Philippines, positioning the country to meet the rising demand for these materials.

These minerals are in high demand, leading to concerns about potential supply shortages and hoarding.

Battery production hub

A report published in 'The First Philippine Industrial Park Auto Parts Industry Brochure' noted that the country's resource base, combined with the government's commitment to green energy initiatives and policies supporting foreign investment, positions the Philippines as a potential hub for battery manufacturing.

The report stated that the government can offer a skilled workforce and a strategic location to serve both the local market and the broader Southeast Asian region.

In addition to natural resources, there are state-backed research and development facilities to ensure that manufacturing operations meet global safety and operational standards.

The DTI has expressed its aim to strengthen the country's position in the automotive sector in the medium term and to make the Philippines a regional hub for vehicles and parts in Asia through a strong domestic supplier base.

However, the DTI also points out that local auto parts businesses face challenges related to competitiveness, due to a lack of economies of scale and a weak supply base.

As a result, the DTI has recommended policy upgrades and temporary subsidies to support sector growth.

Congress has also taken action, with the passage of the Electric Vehicle Industry Development Act (EVIDA) in 2022, which provides tax incentives, mandates EV charging stations in shopping malls, and sets fleet conversion targets for both the public and private sectors.

New normal

With the implementation of EVIDA, EVs are becoming a more common form of transportation in the Philippines.

According to the Electric Vehicle Association of the Philippines (EVAP), the EV market has seen increased sales due to growing consumer interest, improved charging infrastructure, and government policies.