ELECTRIC VEHICLES (EVs) could account for nearly half of all automobile sales within the Philippines by 2035 if the federal government sustains incentives and follows through on planned policies, in response to the International Energy Agency (IEA), signaling a possible shift within the country’s automotive and energy sectors despite current affordability constraints.
In its Global EV Outlook 2026, the IEA said EVs could account for as much as 45% of automobile sales within the Philippines by 2035 under its Stated Policies Scenario (STEPS), up from an estimated 10% market share in 2025.
“Within the Philippines, continued reliance on import duty and excise tax exemptions supports adoption within the near term,” the organization said.
The STEPS scenario assumes that governments will fully implement announced energy and transport policies and targets. Under this outlook, the Philippines would significantly outperform the Current Policies Scenario (CPS), which only aspects in policies already in place and projects EVs accounting for around 15% of automobile sales by 2035.
“Despite limited affordability constraining wider adoption within the CPS, electric cars could reach around 45% of sales within the STEPS by 2035,” the IEA said.
Globally, EV sales are projected to succeed in 23 million units this yr and account for nearly 30% of all cars sold worldwide, in response to the report.
“Electric automobile sales set latest records in near 100 countries last yr. The growing popularity of EVs has marked a serious shift for automobile markets and the energy system as a complete,” IEA Executive Director Fatih Birol said in an announcement.
“Looking ahead, the falls we have now seen in battery prices and the potential policy responses to the present global energy crisis are set to offer further momentum in EV markets,” he added.
The IEA said Southeast Asia posted considered one of the fastest growth rates in EV deployment last yr, with sales greater than doubling to over a million units. Nonetheless, the Philippines and Malaysia remained behind regional peers despite recording rapid growth.
EV sales within the Philippines reached nearly 10% of recent automobile sales in 2025, supported by excise tax relief and import duty exemptions for electric vehicles.
The country has also rolled out the Electric Vehicle Incentive Strategy, which provides fiscal and non-fiscal incentives aimed toward supporting domestic production of EVs, batteries, parts, charging infrastructure, and testing facilities.
While EV adoption is anticipated to proceed rising across Southeast Asia, the IEA noted that incentives in several countries may regularly weaken as tariff exemptions expire.
“The Philippines is a notable exception, as its import duty exemptions are expected to stay in place through 2028 based on current policies,” the agency said.
For the reason that enactment of the Electric Vehicle Industry Development Act in 2022, the Philippines has pushed for wider EV adoption by requiring the next share of EVs in corporate and government fleets.
Under the Comprehensive Roadmap for the Electric Vehicle Industry, the federal government targets a ten% EV fleet share by 2040 under its business-as-usual scenario, while its clean energy scenario targets not less than 50%.
Patrick T. Aquino, director of the Department of Energy’s (DoE) Energy Utilization Management Bureau, earlier told BusinessWorld that EV sales are expected to grow by double digits to greater than 40,000 units this yr.
He said higher fuel prices linked to developments within the Middle East are expected to support stronger EV demand as consumers search for alternatives to traditional fuel-powered vehicles. — Sheldeen Joy Talavera