The global oil crisis appears to be accelerating the country’s EV adoption – Gatchalian

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

“What is happening right now with petroleum prices is an eye opener. Many people will be checking for change,” Senator Sherwin T. Gatchalian, chairman of the senate finance committeeyou have been told BusinessWorld alongside a panel discussion on power transition in the Philippines.

He also said that, along with the possible increase in demand, banks are expected to have “liberty” in financing EVs following recent events.

“Funding is important. Previously, bank funding only favored brands, but now they are open to other brands,” said Mr. Gatchalian.

By 2040, the country aims to achieve a 50% EV adoption rate.

This objective is expressed in the Comprehensive Guidelines for the Electric Vehicle Industry (CREVI), the national framework for EV adoption under Republic Act No. 11697, signed in 2022. The guide aims to invest at least 2.45 million EVs and 20,400 charging stations within targeted charging stations across the country.

When asked if the country is on track to achieve its 2040 goal, the lawyer said the goal is still a long way 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%,” said Mr. Gatchalian.
He cited a variety of concerns and limited infrastructure, especially the lack of charging stations, as key issues that have delayed EV adoption in the country.

“But I think that after this, we will see a quick change, that’s why we are thinking of maintaining non-financial incentives,” he added.

In the latest auto sales report, EV sales rose 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 happened despite a decline in overall car sales over the same period, reflecting changing consumer preferences.

Eric T. Francia, president and chief executive officer (CEO) of ACEN Corp., said he also sees increased EV adoption as a response to the recent series of oil price hikes – similar to how financial technology (fintech) was embraced during the COVID-19 crisis.

“Definitely, there will be an increase in demand,” said Mr. Francia on the sidelines of the same event.
“I think this energy crisis will have an impact and accelerate adoption, similar to what we saw during the COVID. It’s a negative event with a silver lining,” he added.

In order to support sustainable transportation with EVs, Mr. Francia said that electricity must be increased with a greater share of renewable energy.

To support the country’s EV transition plans, 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, an arm of Ayala Corp. for transportation and vehicles.

He also noted that EV infrastructure companies are doubling or tripling their efforts to expand EV charging stations across the country.

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

Besides the excise tax exemption for fully electric vehicles under the Tax Reform for Acceleration and Installation (TRAIN) Act, and the 0% tax on certain EVs under Executive Order No. 12 (2023), the lawmaker said the Senate is considering additional non-monetary incentives to push for widespread EV adoption. These include designated parking lots, toll exemptions on highways, and higher excise duties on internal combustion engine (ICE) vehicles.

The lawmaker also welcomed the declaration of a national power emergency by President Ferdinand R. Marcos, Jr. on Tuesday, saying the Senate will work closely with the committee on issues and support the budget.

“It’s good that we have that announcement. It will create many mechanisms – price control, supply control, and concerted efforts from the government,” said Mr. Gatchalian. – Edg Adrian A. Eva