The Philippines is seeing an increase in the adoption of electric and hybrid vehicles by both individual consumers and businesses.

The rise in interest is driven by growing demand for hybrid vehicles, which utilise both an internal combustion engine and an electric motor, as well as battery electric vehicles (BEVs).

Government push

The Marcos administration has promoted the nationwide expansion of electric vehicle (EV) adoption.

Government agencies are now required to prioritise the use of EVs. President Ferdinand Marcos Jr. has stated that a portion of the government fleet should comprise electric vehicles and has established a target whereby EVs must constitute at least half of all vehicles on the road by 2040.

President Marcos has also encouraged US-based Tesla to establish electric vehicle manufacturing operations in the Philippines.

According to the Department of Energy (DOE), and in line with the President's directive, the government is offering incentives to encourage the public to adopt electric vehicles. These include reduced or suspended import tariffs, priority registration at the Land Transportation Office (LTO), and exemption from the number coding scheme.

Room for growth

In September, the DOE introduced a clearer electric vehicle classification system aimed at creating an organised and accessible EV market in the Philippines.

An economist, stated that one of the key drivers of growth in the EV market is the declining cost of electric vehicles amid increased competition, particularly from China and Vietnam.

He also noted that this trend is making EVs more affordable to local buyers. He stated that an increasing number of companies and institutions are aligning with ESG (Environmental, Social, and Governance) standards, which include adopting environmentally sustainable operations.

As environmental awareness continues to rise among the public, there is potential for growth in EV sales and usage in the country.

Private sector rollouts

Ride-hailing company Grab Philippines launched 'GrabTaxi Electric', a fully electric, on-demand taxi fleet accredited by the government.

The units have been deployed in select Metro Manila hubs, including Makati, Taguig, Pasig, Mandaluyong, Paranaque, and Pasay.

According to Grab, the initiative forms part of an eco-mobility strategy. The company plans to expand its EV operations to Davao and Cagayan de Oro before the end of 2025.

Another operator in Metro Manila is Vietnamese ride-hailing company Green and Smart Mobility (Green GSM), which has deployed fully electric vehicles.

Frederick Go, from the Office of the Special Assistant to the President for Investment and Economic Affairs, stated that Green GSM's entry is expected to affect public transport operations in the Philippines.