Global oil crisis seen to accelerate country’s EV adoption — Gatchalian

A Philippine lawmaker on Wednesday said the ongoing global crisis prompted by the war in the Middle East could be a “turning point” that will accelerate electric vehicle (EV) adoption in the country, helping it catch up with its 2040 targets.

“What’s happening right now with petroleum prices is an eye-opener. A lot of people will be exploring the transition,” Senator Sherwin T. Gatchalian, chairman of the senate committee on finance, told BusinessWorld on the sidelines of a panel discussion on the Philippines’ energy transition.

He also said that, alongside a potential surge in demand, banks are expected to become more “liberal” in financing EVs following recent events.

“Financing is key. Before, bank financing only favored the name brands, but now they’ll be open to other brands,” Mr. Gatchalian said.

In 2040, the country targets to achieve a 50% EV adoption rate.

This target is outlined in the Comprehensive Roadmap for the Electric Vehicle Industry (CREVI), the country’s EV adoption blueprint under Republic Act No. 11697, which was signed in 2022. The roadmap aims to deploy at least 2.45 million EVs and 20,400 charging stations nationwide by the target period.

When asked whether the country is on track to meet its 2040 target, the lawmaker said the goal remains far off.

“I don’t think we’ve reached 10% of the cars on the road. I think it’s less than — if I’m not mistaken — less than 5%,” Mr. Gatchalian said.
He cited range anxiety and limited infrastructure, particularly the lack of charging stations, as key bottlenecks that have slowed EV adoption in the country.

“But I think after this, we’ll see a faster transition, and that’s why we’re thinking of sustaining the non-fiscal incentives,” he added.

In a recent automotive sales report, EV sales rose by 70.6% to 3,098 units in February from 1,816 units in the same period last year, according to data from the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) and the Truck Manufacturers Association (TMA).

This was despite a decline in overall automotive sales during the same period, indicating a shift in consumer preference.

Eric T. Francia, president and chief executive officer (CEO) of ACEN Corp., said he is also seeing a surge in EV adoption as a response to the recent series of oil price hikes — similar to how financial technologies (fintech) were adopted during the COVID-19 pandemic.

“Definitely, there will be a surge in demand,” Mr. Francia said on the sidelines of the same event.
“I think this energy crisis will really be a catalyst and accelerate adoption, similar to what we’ve seen during COVID. It’s a bad event that has some silver lining,” he added.

To support more sustainable transportation through EVs, Mr. Francia said the power supply must be augmented with a larger share of renewable energy.

In support of the country’s EV transition initiatives, he said ACEN is helping companies and government agencies develop their EV transition plans, including installing charging stations at their facilities. This is in partnership with AC Mobility, Ayala Corp.’s mobility and automotive arm.

He also noted that EV infrastructure companies are doubling or even tripling their efforts to expand EV charging stations nationwide.

For those looking to transition to EVs, Mr. Francia recommended purchasing plug-in hybrid electric vehicles (PHEVs), which offer the advantages of both traditional and electric vehicles.

Apart from the excise tax exemption for fully electric vehicles under the Tax Reform for Acceleration and Inclusion (TRAIN) Law, as well as the 0% tariff on certain EVs under Executive Order No. 12 (2023), the lawmaker said the Senate is considering additional non-fiscal incentives to push wider EV adoption. These include designated parking slots, toll exemptions on key expressways, and higher excise taxes on internal combustion engine (ICE) vehicles.

The lawmaker also welcomed the declaration of a state of national energy emergency by President Ferdinand R. Marcos, Jr. on Tuesday, saying the Senate will work closely with the crisis committee and support it through budget allocations.

“It’s good that we have that declaration. It will trigger many mechanisms — price regulation, supply regulation, and, of course, concerted efforts from the government,” Mr. Gatchalian said. — Edg Adrian A. Eva