BMI Country Risk and Industry Research has forecasted electric vehicle (EV) sales in the Philippines to increase by 11.2 percent year-on-year in 2026, from 29,479 units to 32,776 units.
The research house said in a note that its EV definition includes battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs) but excludes non-plugin hybrid vehicles (HEVs).
This growth will occur despite its expectation that total vehicle sales will decline by 8.7 percent to 423,750 units, allowing EV penetration to increase from 6.4 percent in 2025 to 7.7 percent in 2026.
BMI also highlighted that higher fuel prices linked to the US-Iran conflict are having two contrasting effects in the Philippines’ auto market.
On the one hand, they are weakening overall vehicle demand by increasing ownership and transport costs, but on the other hand, they are also improving the relative value proposition of electrified powertrains.
“Consumers able to purchase a new vehicle have a stronger incentive to consider models that can reduce fuel expenditure. This will benefit BEVs, PHEVs and HEVs, particularly among higher-mileage drivers and urban consumers,” BMI said.
The research house also noted that competitive pricing and a broader selection of models from brands such as BYD, Chery, MG, VinFast and Tesla will support the local BEV market.
“We contend that the expansion of Chinese brands will be particularly important because it will reduce the price gap between EVs and comparable internal combustion engine (ICE) vehicles while increasing consumer awareness of electrified technology,” it added.
According to BMI, government incentives continue to improve the affordability of electrified vehicles. BEVs are exempt from import tariffs and excise taxes until 2028, while HEVs and PHEVs benefit from tariff exemptions and lower excise tax rates.
Together, these measures are narrowing the price gap with ICE vehicles and supporting demand for electrified powertrains.
Furthermore, the Electric Vehicle Industry Development Act also provides a framework for charging infrastructure development, regulatory support and greater use of EVs in public-sector fleets.
This includes a target for EVs to account for at least 10 percent of government vehicle fleets. Public procurement can provide additional demand and improve the visibility of EV technology.
Despite supportive government policies and improving model availability, BMI said insufficient charging infrastructure will remain the main barrier to wider BEV adoption in the Philippines over the medium term.
Currently, the Philippines has around 1,600 charging points, comprising 781 alternating current (AC) chargers, 291 direct current (DC) chargers and 528 battery-swapping stations, according to the Electric Vehicle Association of the Philippines (EVAP).
“Although the network is expanding, charging facilities remain concentrated in major urban areas,” said BMI. This limits the practicality of BEV ownership for consumers without access to home charging and for drivers who regularly travel between cities or through less-developed areas,
“Also, the dominance of AC chargers within the charging network means that charging times remain relatively long for many users, which is likely to support demand for PHEVs over BEVs as consumers prioritize flexibility and ease of use, particularly outside major urban centers,” said BMI.
BMI also highlighted that range anxiety will remain an important barrier to EV adoption because consumers must consider not only the number of chargers available but also their location, reliability and compatibility.
It sees weak road quality, traffic congestion and the popularity of sport-utility vehicles (SUVs), crossovers and pickup trucks add further complexity.
“While electric models are becoming increasingly available in these segments, their higher purchase prices and energy requirements can make consumers more cautious about moving directly from ICE vehicles to BEVs,
“Nevertheless, the growing presence of affordable Chinese brands such as BYD, MG, GAC Aion and Chery is helping to narrow this cost gap by introducing more competitively priced electric SUVs and crossovers, which should support broader EV adoption over the medium term,” it added.
BMI expects HEVs and PHEVs to remain key beneficiaries of the shift towards electrification.
While HEVs cannot be charged externally, it highlighted that they provide lower fuel consumption without requiring drivers to change their refueling behavior.
It noted PHEVs offer a similar degree of flexibility because the ICE system can support longer journeys when charging is unavailable.
It stressed that these characteristics make hybrid powertrains well suited to current Philippine market conditions.
“Looking ahead, we forecast EV sales to accelerate from 32,776 units in 2026 to 51,666 units in 2027, supported by stronger overall vehicle demand and an expanding range of models,
“Sales will then rise to 65,432 units in 2028, 78,781 units in 2029 and 91,730 units in 2030. This represents average annual growth of 29.3 percent over 2026-2030,” it said.
BMI is also forecasting EV penetration in the Philippines to increase from 7.7 percent in 2026 to 11.4 percent in 2027, 13.7 percent in 2028, 15.6 percent in 2029 and 17.3 percent in 2030.
Meanwhile, ICE vehicle sales will recover more slowly, increasing from 390,974 units in 2026 to 438,106 units in 2030.
Electrified vehicles will therefore account for a rising share of market growth during the second half of the decade.
“The main downside risks to our EV outlook stem from slower-than-expected expansion of the charging network and potential changes to the current incentive framework after 2028,” said BMI.
It sees both factors could reduce the pace of EV adoption by limiting affordability and weakening consumer confidence in transitioning to electric mobility.
On the upside, intensifying competition among Chinese automakers seeking to expand their presence in the Philippines, combined with falling battery costs, could improve EV affordability and accelerate adoption.
This would be particularly beneficial in popular SUV and crossover segments, where price remains a key consideration for consumers.
“Faster investment from both the public and private sectors in charging infrastructure would also improve the practicality of BEV ownership, allowing BEVs to capture a larger share of electrified vehicle demand than we currently expect,” it added.
Southeast Asia’s EV sales accelerate as energy crisis continues