Manila’s (late) EV bet
Energy Secretary Sharon Garin’s framing — that the Philippines should build EVs, not merely ride them — is the right ambition wearing the wrong clothes.
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Energy Secretary Sharon Garin’s framing — that the Philippines should build EVs, not merely ride them — is the right ambition wearing the wrong clothes.
Sixty billion pesos is not a strategy. It is a down payment on hope, and hope has never assembled a single vehicle chassis.
President Ferdinand Marcos Jr.’s Electric Vehicle Incentive Strategy (EVIS), signed into law on 29 July, dangles as much as P15 billion in tax payment certificates before four lucky EV models, betting that Manila can still buy its way into a regional manufacturing race it has been losing since the first Corolla rolled off a Thai assembly line.
The arithmetic is seductive. The politics of industrial catch-up rarely are.
Consider what the Philippines is actually competing against. Thailand did not become the “Detroit of Asia” through incentive packages announced with fanfare and executive orders.
It built 40 years of supplier density, tooling expertise, and component ecosystems that now allows it to localize 80 to 90 percent of a vehicle’s parts, shaving up to US$2,000 off production costs before a single peso of subsidy will change hands.
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Indonesia sits on nickel reserves it has weaponized into US$346 million in assembly commitments. For its part, Vietnam simply built VinFast from nothing and now pushes out 200,000 EVs a year.
The Philippines, by contrast, scored a dismal 1.8 on supply chain readiness and 1.1 on infrastructure in PwC’s Asean-6 assessment — numbers so low they read less like a scorecard and more like a diagnosis.
And still Malacañang wants us to believe that tax certificates alone can compress four decades of industrial accumulation into a matter of years.
Energy Secretary Sharon Garin’s framing — that the Philippines should build EVs, not merely ride them — is the right ambition wearing the wrong clothes. Ambition without ecosystem is a press release.
The market’s verdict has already arrived, and it is unflattering. Only Mitsubishi has committed to local hybrid EV assembly, a modest seven-billion-peso plant in Santa Rosa that will not even open until 2028.
BYD, which commands 70 percent of the local EV market through a partnership with Ayala’s ACMobility, has flatly declined to manufacture here, telling us plainly that Philippine assembly “is not part of our vision.”
Meanwhile, Toyota, the volume leader, is hedging, waiting to see whether EVIS’s fine print will justify the capital risk.
When the dominant players decline to bite, the incentive is not de-risking investment — it is subsidizing indecision.
Layer onto this the structural handicaps that no tax certificate can paper over: industrial electricity rates near P15 per kilowatt-hour, roughly double what Vietnam and Indonesia charge their manufacturers, and a parts ecosystem so thin that full-vehicle assembly is routinely outsourced abroad even for companies with a domestic footprint.
EVIS subsidizes the symptom while leaving the disease — an economy that has never built the deep supplier base automakers actually price into their location decisions — entirely untreated.
None of this means the effort is worthless. Domestic demand is outrunning expectations, with EV sales up 132.7 percent in the first half of 2026 even as fuel prices push consumers away from internal combustion.
That appetite is real leverage, if Manila is honest enough to use it differently: not chasing the fantasy of becoming a second Thailand, but carving a narrower, defensible niche — in components, batteries, aftermarket services — where the country’s actual comparative advantages might someday exist.
Affordability, the arithmetic on running costs, infrastructure sequencing — these are the real battlegrounds, and none of them will be won with a signing ceremony.
EVIS is not evidence that the Philippines has decided to build electric vehicles. It is evidence that the Philippines has decided to sound like it might, while the region’s actual manufacturers watch, unmoved, and keep building somewhere else.
