Ushering the EV era

For ordinary Filipinos who take public transportation, drive to work, haul goods, or run a business, the arithmetic has changed. And when the arithmetic changes at the fuel pump, people begin to look for alternatives. In the last several weeks, electric and hybrid transportation have become very attractive.

In a column in December 2024, I noted four future trends: Chinese EV brands would dominate; charging infrastructure would be the main bottleneck in EV adoption; hybrids would outsell full battery electric vehicles in the short term; and rising fuel prices could accelerate the entire process.

True enough, the unexpected oil shock that resulted from the ongoing Middle East conflict has just pushed all four trends into sharper view. What looked then to me like an emerging pattern is now marking the beginning of a market shift. And the shift, in my opinion, will continue even as oil prices eventually stabilize.

Official industry data showed electric vehicle sales rose by 18% month on month in February, and by 70% from a year earlier. Hybrids accounted for most of the volume, with battery EVs and plug-in hybrids also posting strong gains. Full March industry figures are not yet out.

But the number of EV dealerships opening up is an early sign of a mainstream shift, driven not by environmental idealism but by the urgent desire to mitigate surging fuel prices. BusinessWorld and Reuters have both reported that the fuel crisis is driving EV demand, especially in oil import-dependent markets.

And what is leading the surge are hybrids, not pure EVs. A hybrid keeps a gasoline engine as backup and does not depend entirely on a charging network that remains thin outside major urban centers. It addresses range anxiety without requiring a quick solution to the charging infrastructure problem.

A hybrid is a transition technology, a bridge between the world we have and the one we are trying to build. And for the practical Filipino buyer looking for quick relief from surging fuel prices, that bridge is the most sensible choice right now. That practicality is shown in the present sales mix.

Reuters reported that BYD is targeting 1.5 million overseas sales in 2026, and that overseas markets accounted for about 45.8% of its first-quarter sales. Chinese EV makers are pushing into import-dependent Asian markets when high fuel prices are making their value proposition easier to explain.

Locally, BYD Cars Philippines reported over 26,000 sales in 2025, up over 440% from the previous year. VinFast has been expanding its Philippine footprint as well, pairing dealership growth with pricing and financing structures aimed at lowering the upfront cost of ownership. Locally, affordability always comes first. And the company that can offer a credible vehicle at a lower monthly cost has the advantage.

Japanese carmakers are not absent from this transition. But they are arriving through a different door. Toyota has entered the battery EV conversation from the higher end of the market. Its Urban Cruiser BEV starts at over P2 million, which makes it credible but still beyond the reach of many Filipino buyers.

Mitsubishi Motors, meantime, said that subject to approval under the government’s Electric Vehicle Incentive Strategy program, Mitsubishi Motors Philippines would produce a new hybrid electric vehicle model at its Santa Rosa, Laguna plant around the middle of 2028.

That move will involve investment in facilities and equipment, expansion of the local supply chain, and additional jobs, which is more important than a showroom launch. It also suggests that at least one major Japanese manufacturer now sees where Philippine sales data already points: hybrids, not pure EVs.

However, I believe that trust remains a real issue for newer EV brands. Many Filipino buyers are still building familiarity with BYD, VinFast, and their peers. Concerns about battery life, long-term durability, resale value, and after-sales support remain, especially outside Metro Manila where service networks are still thinner. This is not a fatal problem, but it is a real one. Low sticker prices can open the door. But they do not, by themselves, close the trust gap.

The harder constraint is infrastructure. The Department of Energy said in 2025 that the country had nearly 1,100 charging stations, mostly in urban areas, while the target is around 7,300 nationwide by 2028. That gap is enormous. Until that network exists, hybrids will continue to hold the stronger hand.

It is also not just a question of quantity. It is a question of geography. Chargers in malls and premium urban districts are useful, but they do not solve the problem for the truck driver on a Luzon highway, the transport operator in Iloilo, or the family in Cagayan de Oro weighing whether to go electric. The charging network the country needs runs along national roads and into secondary cities, not only into parking basements.

The Philippines also lags its neighbors in attracting EV manufacturing investment, and that has a direct cost to consumers. Thailand and Indonesia have used industrial policy, incentives, and scale to position themselves as regional EV production hubs.

The Philippines has relied more on import liberalization, including zero tariffs on certain EVs and components through 2028. Only one carmaker, Mitsubishi, is making the leap so far.

This proves that the country can still build a domestic foothold in the transition, if appropriate policies are put in place.

Also a consideration is how much the EV transition will cost the government in foregone fuel tax revenue, and is that a problem worth worrying about. The longer structural question is what replaces fuel tax revenue (excise and value-added taxes) as transport operators and motorists shift to EVs.

That fuel tax base will shrink for sure, and the present oil shock may simply speed up the process, especially with the President having the authority to temporarily suspend or reduce fuel excise taxes if the world crude price exceeds a certain threshold.

Reports cited by BusinessWorld said a tax suspension from May to December could cost the government about P136 billion in foregone excise taxes, excluding additional VAT effects, for that period. And if tax erosion is made permanent by the EV transition, what happens to government spending?

Long-term thinking tells me that pouring more political capital into defending a revenue line that is bound to erode is the wrong fight. The better approach is to design the replacement now. While fuel taxes raise significant revenues today, the decline is coming. Meantime, many EV incentives end in 2028.

In the transition, perhaps Congress should consider a road-use charge for EVs that reflects their actual use of infrastructure; rational taxation of commercial charging; and, a public policy framework that extends charging beyond the profitable urban core. These can start as soon as EV incentives end.

The EV transition in the Philippines is no longer just a policy ambition or an environmental slogan. It is becoming an economic response to a crisis. The current oil shock may prove to be more than a temporary disruption. It may become the event that changed consumer behavior for good.

The driver watching the meter spin at the pump, the family postponing a gasoline car purchase, the logistics company recalculating its fuel bill for the next quarter, all of them are doing the same math now. The market is moving. The infrastructure and the fiscal framework need to move with it.

Marvin Tort is a former managing editor of BusinessWorld, and a former chairman of the Philippine Press Council.

matort@yahoo.com