The lack of supply from mainstream auto brands and the unbelievable fuel price increases stand to help EV-only brands establish their foothold in the country
The 10th Philippine Electric Vehicle Summit is a timely reminder that electric vehicles will impact the local automotive landscape. This event, organized by the Electric Vehicle Association of the Philippines (eVAP), received lukewarm interest in the past decade. The predominance of Internal Combustion Engine legacy automakers, and the lack of proper charging infrastructure over the years, have made it difficult for eVAP to get its message across. EV proponents struggled to push their agenda to a market that seemed unprepared for change.
eVAP was suddenly thrust into the limelight this year with the implementation of Republic Act No. 11697, or the Electric Vehicle Industry Development Act. Growing public interest in EVs brought about by rising fuel prices, and environmental sustainability awareness has made the organization’s existence all the more relevant.
A global wave of interest and market acceptance of EVs has helped eVAP’s cause. And with more manufacturers pledging to switch to EV mass production in 10 to 15 years, it seems it’s now a matter of when, not if, eVAP becomes a mainstream organization in the Philippine car industry.
Despite the Chamber of Automotive Manufacturers of the Philippines’ claim that vehicle sales are on a solid rebound, with a 64.2% growth in September 2022 sales over the same month in 2021, the fact that 2020 and 2021 sales were so bad because of the Covid-19 pandemic lockdowns that any figure this year is bound to be a significant increase. However, the lack of supply has been holding back a further surge in vehicle sales.
The global semiconductor shortage has severely affected the manufacturing volume of almost every car manufacturer. And this is reflected in showrooms where waiting times for a brand-new car can last anywhere from three to six months.
We reached out to a Japanese brand car dealership to know how dire the customer queues are for its models. With its popular sedan model, reservations have been pending since April this year. The brand’s two top 7-seater crossovers have a total of 58 reservations. At the same time, its other models have 6 to 10 reservations and no clear delivery timeline.
Many of the dealership’s customers have resorted to multiple reservations with their names plotted to at least two models as they await whichever one comes first. And many others have placed reservations with other brands as well.
And this is just one dealership for this brand. One can imagine how the other dealerships are faring. My friend also made a reservation for a popular hybrid crossover back in May, and as of today, five months later, there is still no word about when she will get her unit. Expand that scenario to other brands facing the same predicament, and you get an even sadder picture.
Rising fuel prices, especially for diesel, are also turning the industry on its head. With the cost of diesel now well past P80 per liter, it is becoming harder to justify the purchase of large diesel-fed SUVs and MPVs that have previously made a killing from the Filipino’s affinity for “krudo.” Despite the modern automobile’s improved efficiency, the reality is motorists will still visit the pump and load up. And with the volatility of oil prices, that next visit could very well breach one’s monthly fuel allowance and affect the rest of the household’s expenditure.
A confluence of factors is severely hampering the recovery of the Philippine auto industry. But it is also opening up an opportunity for a sector that has something different to offer. The lack of supply from mainstream auto brands and the unbelievable fuel price increases will only help EV-only brands establish their foothold in the country.
Chinese marques such as BYD, Chery, Geely, Ora, Nio, and Xpeng are already at the forefront of electric vehicle technology. And there are more EV brands in the Chinese mainland just waiting for the right opportunity to find a local Philippine partner and expand their business. They can only hope that US, Japanese and European brands won’t be able to straighten out their priorities in time so that they can wrestle away a significant share of the pie.
Meanwhile, the underserved and hungry Philippine car market is waiting. But it will be the companies that can provide a viable, sustainable, and future-proof solution to the mobility needs of Filipino motorists that will surely get the upper hand. That may also mean your next car may not run on gasoline or diesel. First come, first served.
