Philippines Shifts Focus to Electric Vehicles in New Automotive Policy

Aug 1, 2026

77 min

Aug 1, 2026 00:31

From CARS to EVs: How the Philippines is rewriting its automotive industrial policy

## Policy Shift Towards Electrification

The Philippines is revamping its automotive industrial policy to prioritize electric vehicles (EVs) and hybrid manufacturing. This strategic pivot is part of the Electric Vehicle Incentive Strategy (EVIS), which aims to attract EV manufacturers by offering various incentives.

## Budget Changes and Industry Response

In January 2026, President Ferdinand Marcos Jr. signed a national budget that included a veto of ₱92.5 billion in "unprogrammed appropriations," affecting the Comprehensive Automotive Resurgence Strategy (CARS) program. This move raised concerns among automotive manufacturers, but the government assured that existing obligations under CARS would still be honored through alternative funding mechanisms.

## Transition from CARS to EVIS

The CARS program, launched in 2015, aimed to boost local vehicle production through incentives. However, the rapid evolution of the automotive industry necessitated a shift in focus. The government is now emphasizing the development of EVs and hybrids, with Mitsubishi Motors Corp. planning to produce a hybrid model in the Philippines by 2028.

## Strategic Opportunities

The new policy framework seeks to leverage the Philippines' existing electronics and semiconductor base to support the transition to EVs. This approach aims to create a more competitive and sustainable automotive industry by integrating advanced technologies and reducing reliance on conventional vehicle assembly.

## Broader Implications

The shift towards EVs is not just about modernizing the automotive sector but also about reducing the country's dependence on oil imports. By fostering local production of hybrids and EVs, the Philippines hopes to enhance its industrial capabilities and contribute to cleaner transportation solutions.

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