Study: PH’s EV industry has strong potential for growth

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The country’s electric vehicle (EV) industry has a strong potential for growth, according to a study of state think tank Philippine Institute for Development Studies (PIDS). 

In a webinar recently organized by PIDS, supervising research specialist Maureen Ane Rosellon revealed that the global outlook of the EV sector is “very optimistic” given the increasing trend that has been observed in the global fleet for any type of vehicle from 2010 to 2019.

For instance, the number of electric cars sold went up from 450,000 units in 2015 to 7.2 million in 2019 globally. 

“For the Philippines, we would like to reduce dependence on fossil fuels, minimize harmful emissions and wastes to protect the environment, as well as for the EV industry to grow,” Rosellon said.

The study found strengths and opportunities in the EV industry, including the strong government support in policy and project formulation.

For instance, the Department of Energy’s Tricycle Replacement Program deployed to different local government units 3,000 electric tricycles (e-trikes) produced by BEMAC Electric Transportation Philippines Inc., a local e-trike manufacturer. This partnership between the government and the private sector indicates a positive outlook for the EV industry.

The country could also explore its prospects for automotive and electronics manufacturing as it has been a key manufacturer and exporter of wire harnesses, a vital component of electrical systems in vehicles. This shows promising opportunities for the country to participate in the supply chain and the overall development of the EV industry.

However, the country should address the weaknesses and threats that harm the industry’s growth potential, such as the “relatively low technology utilization, general concerns about EV infrastructure, and strong competition for investments”.

The Department of Trade and Industry’s 2019 firm survey on the SMART Manufacturing Maturity Index revealed that 79 percent of respondents have very low to low level of technology utilization.

It also showed that safety and range anxiety (i.e., how long the EV will go in terms of distance) are the top concerns of potential EV buyers from Southeast Asian countries, including the Philippines.

The government should also be proactive in increasing the country’s competitiveness in attracting investments. The charging infrastructure should also catch up with the growth in EV production and adoption.

Rosellon provided some recommendations to take advantage of the sector’s strengths and opportunities and address the challenges.

She urged the government to prioritize Senate Bill No. 1382 or the Electric Vehicles and Charging Stations Act of 2018. The bill has recently passed the third and final reading.

“An EV law will set the national policy and overall framework for regulations related to standards, incentives, infrastructure, and others. It can also signal investors that the industry is a priority area for industry development. The industry is fast-moving, and for the country not to be left behind, prioritizing the bill would be crucial,” Rosellon said.

There is also a need to develop in-depth market and feasibility studies for manufacturing prospects and a charging infrastructure plan.

She also proposed the inclusion of the EV sector in areas for technical cooperation and trade missions.  According to Rosellon, this could provide an opportunity to upgrade the knowledge and skills of the country’s workforce and explore partnerships with local EV players and foreign investors.

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