‘EVs to make up 45% of car sales by 2035’

MANILA, Philippines — More Filipinos could be driving electric vehicles by 2035, with the sector projected to capture nearly half of the Philippine auto market under stronger policies and incentives, a global EV report.

According to the International Energy Agency (IEA), EVs could account for around 45 percent of car sales in the Philippines by 2035, even as affordability challenges continue to slow wider adoption.

“In the Philippines, continued reliance on import duty and excise tax exemptions supports adoption in the near term,” the IEA said in its 2026 Global EV Outlook.

Under existing revenue regulations, purely battery EVs in the Philippines are exempt from excise tax on automobiles, while hybrid cars are subject to 50 percent of the applicable excise tax.

To further attract more EV manufacturers, the government is also preparing an EV Incentive Strategy aimed at boosting investment and accelerating industry growth.

In 2025, electrified vehicles (xEVs) accounted for 12 percent of the market, with sales surging by 142.5 percent to 58,905 units, based on the latest industry data. This marked a significant jump from just 5.5 percent in 2024.

The IEA said EV adoption is accelerating not only in the Philippines but across Southeast Asia, where sales more than doubled to over half a million last year.

Notably, nearly one in five cars sold in the region is now electric.

However, growth has been uneven, with Vietnam, Indonesia and Thailand leading the region, driven by strong policy support, expanding domestic manufacturing and favorable import conditions, particularly from China.

“On the other hand, electric sales shares remained somewhat lower in Malaysia and the Philippines, despite growing rapidly,” the IEA said.

Across the globe, the IEA expects EVs to account for around 28 percent of car sales this year, as high fuel costs driven by the ongoing Middle East war push countries toward cleaner alternatives.

In the Philippines, for instance, diesel prices reached as high as P170 per liter during the height of the geopolitical tensions.

Earlier, the Chamber of Automotive Manufacturers of the Philippines Inc. said sales of xEVs could rise further this year amid shifting consumer preferences.