Policies that can encourage the shift to electric vehicles
By Rafael C. Ang and Alexandra C. Ang
Electric vehicles (EVs) mark a monumental shift for transportation. They are an ideal solution to the emission-related issues conventional combustion vehicles produce and a theoretically sound step towards decarbonization. Yet Filipino consumers’ adoption of Battery Electric Vehicles (BEVs) has been sluggish, with a stronger inclination towards hybrids over BEVs.
This article intends to provide insights on global EV perspectives and determine whether the Philippine government has sufficient measures to incentivize EV adoption. In order to incentivize EV adoption, charging infrastructure, adoption across different vehicle types, and supply chain management are necessary. This is also crucial in order to meet national targets. Ferdinand Raquelsantos, chairman emeritus of the Electric Vehicle Association of the Philippines (EVAP), shared that the 2030 target of an additional 6.6 million EVs involves 3.6 million electric motorcycles and 300,000 units of private electric cars.
Widespread EV adoption faces challenges in terms of exposure and potential inaccessibility compared to conventional automobiles. The government addressed this in May 2024 when the National Economic and Development Authority (NEDA) board approved a zero tariff import duty rate modification on EVs and their components. This allowed for an increase in the quantity imported, as the elimination of deadweight losses within the market incentivized producers to increase import levels. While the zero tariff import duty policy is a welcome move, its benefits are largely felt by producers rather than consumers. As the policy effectively lowers the cost of importing EVs and increases market supply, consumer benefits are likely to take longer to manifest. It does not directly address the key barriers that consumers need to overcome in order to achieve a positive net utility, such as limited access to affordable EV financing. In this context, a more producer-consumer balanced approach is necessary. For example, Norway’s consumer-oriented incentives such as VAT exemptions and tax breaks (i.e. a 50% reduction on road taxes and lower parking fees) have allowed for almost 96% of new car purchases in 2025 to be fully electric.
A Deloitte study found that 55% of Filipino respondents identified the lack of public charging infrastructure as the main barrier to BEV adoption. Consumers will be incentivized to adopt EVs when the net utility they gain is positive. One primary policy enacted by countries with successful EV adoption rates was to install public chargers. A study on electric vehicle adoption in Norway found that for every 100 additional public chargers, the battery electric vehicle (BEV) adoption rate rose by 2.9%. As the market matured, however, the impact of expanding public charging infrastructure on adoption rates declined. This reduced effectiveness is largely due to the fact that 80% of Norwegian BEV owners are homeowners, giving them convenient access to private charging at home.
As of December 2024, there were 130 electric vehicle charging stations located in Metro Manila, the region with the highest number of EV charging locations nationwide. There were over 7,000 registered electric vehicles in the country in 2023. Given that the EV market in the Philippines is still in its early stages of development, increasing the number of public charging stations is likely to drive greater adoption of battery electric vehicles (BEVs). Incentivizing third-party providers to establish and operate charging infrastructure can alleviate the strain on government resources, especially as previous charging station initiatives have been primarily government-led.
The rise in electric utility vehicles (e-UVs) in 2019 was mainly driven by government initiatives, such as the Public Utility Vehicle Modernization Program (PUVMP) and local government-led e-tricycle (e-TC) projects. Collaboration between agencies like LTFRB, Meralco, and city governments has further supported e-vehicle adoption, as seen in Iloilo City’s electric jeepney trials and the “eSakay” route.
Private sector efforts, such as the partnership between Globe’s 917Ventures, Ayala Corporation, and Gogoro, have introduced Gogoro Smartscooters and battery-swapping stations in Metro Manila. Similarly, Pilipinas Shell and SUN Mobility are launching a pilot program to test battery-swapping technology for two- and three-wheeled EVs at Shell stations.
Currently, seven local companies are engaged in e-trike production or assembly, with e-jeepneys (e-JP) dominating the local four-wheeled EV market. However, investment in large-scale manufacturing remains limited, driven primarily by demand-based production. As emphasized by APEC, the Philippines is one of the world’s top three producers of nickel, which is used in EV battery manufacturing. Along with graphite, nickel is one of the two most challenging minerals to access in the current battery supply chain. Hence, investments in production capabilities would also boost the Philippines’ moves towards widespread EV adoption. Robust supply chains would also result in cheaper prices for consumers.
In the Philippine context, policies that directly reduce the financial burden on consumers could prove to be largely beneficial in enhancing EV adoption rates. An extra “spark” in the form of consumer and supply chain-centric incentives is what will truly result in a greener tomorrow.
