Driving towards a greener future

The Philippines is on the brink of a significant transformation as Filipinos accelerate the adoption of electric vehicles (EVs), driven by both government initiatives and the pioneering efforts of innovative organizations. Fueled by the urgent need to combat climate change and reduce carbon emissions, we see this shift extending its influence across diverse industries.

The ongoing transformation towards cleaner and more sustainable transportation solutions is evident on the global stage. Recent data from the International Energy Agency sheds light on this, highlighting a remarkable surge in EV sales. In 2021, the number of electric vehicles sold doubled compared to the previous year, reaching a record of 6.6 million units.

Nearly 10 percent of all global car sales were electric, marking a fourfold increase in market share since 2019. This surge has propelled the total count of electric cars on the world’s roads to approximately 16.5 million, a threefold rise from the figures reported in 2018. In 2022, the momentum continued, with two million electric vehicles sold in the first quarter alone, reflecting a 75 percent increase over the same period in 2021.

While the appeal of EVs continues to grow among consumers worldwide, the rate of adoption varies significantly across countries. Deloitte’s 2023 Global Automotive Consumer Study underscores this evolving landscape. Because of hyper-inflationary conditions, consumers are increasingly attracted to EVs as a solution to mitigate operational costs. Nevertheless, the journey towards universal EV adoption is not without difficulties.

Diverse challenges persist in different markets, with some of the more significant hurdles including affordability; the lingering fear of limited travel range (referred to as range anxiety); and concerns regarding battery safety. These underscore the need for a multi-faceted approach to address the concerns of potential electric vehicle adopters.

EV growth in the Philippines has been exhibiting a more moderate growth compared to neighboring countries in Asia. The good news, though, is that reports indicate that more car buyers in the Philippines are getting convinced to make the switch to electrified vehicles. Electric Vehicle Association of the Philippines (EVAP) cited data from the Land Transportation Office (LTO) showing that from 2014 to 2022, there are already 9,666 EVs registered.

EVAP projects that EVs by 2030 will reach more than six million units 83.12 percent of which are two-wheelers; 5.29 percent passenger cars; 4.53 percent three-wheelers; 4.53 percent are other utility vehicles; and the rest include public utility jeepneys, trucks and buses.

The Deloitte study showed that Filipino consumers are willing to make the switch due to 1) lower fuel costs; 2) better driving experience; 3) reduced maintenance; 4) concerns about personal health; and 5) the potential to use the vehicle as an alternate power source at home.

Government efforts stand as a pivotal force propelling the shift toward sustainable transportation. The Department of Energy (DOE) is at the forefront of this, executing essential programs that align with renewable energy laws. DOE is already crafting the Comprehensive Roadmap for the Electric Vehicle Industry (CREVI) and is holding public consultations on both the Vehicle Fuel Economy Labeling Program (VFELP) and the Fuel Economy Performance Rating (FEPR).

But the true game-changer is the realization of the Electric Vehicle Industry Development Act (EVIDA), also known as Republic Act 11697. This legislation, passed into law in April 2022 and enacted in May of the same year, saw its implementing rules and regulations come into effect in September 2022. EVIDA heralds a profound paradigm shift by cultivating an environment that fosters nationwide electric vehicle adoption.

EVIDA’s impact is far-reaching, creating a ripple effect of incentives that help drive the widespread adoption of electric vehicles. Key strategies include the dedicated allocation of parking slots in establishments, the designation of green routes across urban landscapes, and exemption of these vehicles from traffic coding schemes – advantages that encourage EV adoption.

However, the success of this transition hinges on the establishment of a robust EV charging infrastructure. In a recent statement, Manuel V. Pangilinan, the chairman and CEO of the Manila Electric Company (Meralco), underscored the pivotal role of a well-structured charging network. As the largest electricity distribution utility in the Philippines, Meralco is strategically poised to spearhead the deployment of comprehensive EV charging facilities across the nation. Nonetheless, Pangilinan points out that the acceleration of electric vehicle demand is needed to justify these investments.

The path towards sustainability requires collective efforts, with private sector initiatives complementing government policies.

As businesses strive to align their strategies with sustainability goals, they can play a crucial role in cultivating a robust market for EVs. This, in tandem with government policies that incentivize and promote EVs adoption, creates a synergy that can validate infrastructure investments and propel the nation toward a greener and more electrified future.

As EV adoption gathers momentum, the Philippines has the opportunity to reshape its transportation landscape, reduce its carbon footprint, and pave the way for a greener, more sustainable future.