Philippine electric vehicle (EV) sales are expected to post double-digit growth through 2030, outpacing overall vehicle sales as rising pump prices increase demand for more energy-efficient transport, according to a research company.

A September 4th report from said research firm forecast that EV sales in the Philippines would continue to outperform the wider vehicle market, supported by government incentives, higher fuel prices and growing model availability. For 2026, the research firm projects EV sales to increase by 11.2%, while its definition of EVs includes battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs), but excludes non-plug-in hybrid electric vehicles (HEVs).

The research firm expects EV sales to continue increasing through 2030, representing an average annual growth rate of 29.3% between 2026 and 2030. It had earlier projected the Philippines' total vehicle sales to decline by 8.7% this year.

Overall vehicle demand has declined this year as higher fuel prices resulting from the Middle East war have increased the cost of vehicle ownership and transport, the research firm said. At the same time, elevated pump prices have made electrified transport a viable alternative to petrol-powered vehicles.

The research firm said consumers able to purchase a new vehicle have a stronger incentive to consider models that can reduce fuel expenditure. This is expected to benefit BEVs, PHEVs and HEVs, particularly among higher-mileage drivers and urban consumers.

EV penetration in the Philippines is expected to rise to 7.7% this year, from 6.4% in 2025, and further to 11.4% in 2027, 13.7% in 2028, 15.6% in 2029 and 17.3% by 2030. Meanwhile, internal combustion engine (ICE) vehicle sales are expected to recover more slowly.

Electrified vehicles are therefore expected to account for a rising share of market growth during the second half of the decade, the research firm added.

EV incentives and adoption

Government incentives reducing import duties on EVs and their parts are expected to help make electrified models more affordable, the research firm said.

Executive Order (EO) No. 12, issued in 2023, reduced import duties on certain EVs and their parts and components to zero for a five-year period, or until 2028.

In 2024, President Ferdinand R. Marcos, Jr. expanded the tariff incentives to cover e-motorcycles, e-bicycles, nickel-metal hydride accumulator batteries, e-tricycles, quadricycles, HEVs, PHEV jeepneys or buses, BEVs, HEVs and PHEV cars and trucks, as well as completely knocked-down EVs for all types of vehicles.

The research firm said that while electric models are becoming increasingly available in these segments, their higher purchase prices and energy requirements could make consumers more cautious about switching directly from ICE vehicles to BEVs.

EV adoption is also being hindered by a lack of charging infrastructure and possible changes to the incentive framework for EVs and their parts after it expires in 2028. Both factors could reduce the pace of EV adoption by limiting affordability and weakening consumer confidence in the transition to electric mobility, the research firm said.

The Electric Vehicle Association of the Philippines (EVAP) recently called on the government to extend tariff incentives for EVs and their parts until 2040 to align with the Energy department's clean energy targets.

Asked for comment, Trade Secretary Maria Cristina A. Roque said the department is studying EVAP's proposal to extend zero import duties for EVs and their components.

"We will talk to the economic team on this because we are really pushing for the manufacturing [of EVs] in the Philippines," she told reporters on the sidelines of a forum on Wednesday.

Mr. Marcos recently issued EO 121, establishing the Electric Vehicle Incentive Strategy (EVIS), which creates an incentive programme to encourage local EV manufacturing.

Lack of charging stations

The research company said EV charging stations remain concentrated in urban areas in the Philippines, limiting the adoption of electrified transport.

EVAP data showed that the country has charging points, including alternating current (AC) chargers, direct current (DC) chargers and battery-swapping stations.

The research firm said this limits the practicality of BEV ownership for consumers without access to home charging and drivers who regularly travel between cities or through less-developed areas. It urged the public and private sectors to accelerate investment in charging infrastructure to support BEV adoption.

Other barriers to BEV adoption include poor road quality, traffic congestion and the continued popularity of sport utility vehicles (SUVs), crossovers and pickup trucks, the research company said.

Despite these barriers, growing competition among Chinese automakers expanding in the Philippines and falling battery costs could improve EV affordability and adoption. The research firm said this would be particularly relevant to the popular SUV and crossover segments, where price remains a key consideration for consumers.

Republic Act No. 11697, or the Electric Vehicle Industry Development Act, also provides a framework to encourage EV adoption. Under the law, the government is targeting EVs to account for at least 10% of government vehicle fleets.

Demand for BEVs could be supported by the rollout of vehicle models by firms such as BYD Cars Philippines, Chery Auto Philippines, MG Motor Philippines, VinFast Auto Philippines, Inc. and Tesla Motors Philippines.

The research firm said the expansion of Chinese brands will be particularly important because it could reduce the price gap between EVs and comparable ICE vehicles while increasing consumer awareness of electrified technology.

In the January-to-July period, total EV (xEV) sales more than doubled, while total vehicle sales fell by 10.2%, according to the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) and the Truck Manufacturers Association (TMA).

CAMPI-TMA data showed that xEV sales accounted for 6% of total automotive sales during the seven-month period.