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Philippines offers EVIS incentive for EV manufacturing worth US$ 1 billion
autoindustriya.com, 31 July '26Headlines 31 July '26
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The Philippines has introduced measures to support local electric vehicle (EV) manufacturing after President Ferdinand R. Marcos Jr. signed Executive Order (EO) No. 121, formally establishing the Electric Vehicle Incentive Strategy (EVIS) Programme.
The programme, described by the government as the country's largest incentive package for vehicle manufacturers to date, has a maximum incentive allocation of PHP 60 billion (approximately US$ 1 billion). It is intended to support the Philippines' objective of becoming a regional automotive manufacturing hub by increasing local EV production, attracting investment and strengthening the country's automotive industry through fiscal incentives for participating manufacturers.
Incentive structure and eligibility
The EVIS Programme follows a framework similar to the Comprehensive Automotive Resurgence Strategy (CARS) Programme but provides a larger incentive pool. Under the scheme, participating manufacturers must register a specific EV model, part or component, commit a minimum capital investment of PHP 5 billion, and introduce their locally manufactured EV models within three years of registration to qualify for the incentives.
Manufacturers may register up to two EV models. The programme provides four slots in total, with each manufacturer permitted to enrol a maximum of two models.
Eligible participants can receive two forms of support. The first is Fixed Investment Support (FIS), which provides assistance for establishing or expanding manufacturing facilities for hybrid electric vehicles (HEVs), plug-in hybrid electric vehicles (PHEVs) and battery electric vehicles (BEVs). The second is the Production Volume Incentive (PVI), which provides incentives of up to 12% of the ex-factory price, capped at PHP 200,000 per locally manufactured vehicle, for up to 10 years from the start of production.
The support will be provided through non-transferable Tax Payment Certificates (TPCs) rather than direct cash subsidies. These certificates may be used to settle income tax, value-added tax (VAT), excise tax and import duty obligations to the national government.
An inter-agency committee comprising the Board of Investments (BOI), the Department of Budget and Management (DBM), the Department of Finance (DOF), the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC) has been tasked with developing a digital system for the application, issuance and use of the TPCs. EO No. 121 also assigns the BOI responsibility for implementing the EVIS Programme and overseeing applicant evaluation through a newly established inter-agency structure that includes the Department of Energy and the Department of Transportation.
The EVIS package covers up to 40% of eligible start-up costs for battery electric vehicle manufacturing and up to 30% for hybrid, plug-in hybrid and fuel-cell electric vehicle manufacturing. The production incentive is available only to manufacturers that commit to producing complete EVs or their required parts and components locally.
Applicants will also be assessed on planned production volume, expected economic impact, compliance with safety standards, and after-sales support, including battery recycling and the availability of spare parts for at least 10 years. According to the government, the programme is intended to create jobs, attract investment, support local manufacturing, reduce dependence on imported oil and increase the Philippines' participation in the global EV supply chain.
Successor to the CARS Programme
The EVIS Programme exceeds the PHP 27 billion incentive package provided under the CARS Programme, which was launched in 2015 to support local production of internal combustion engine vehicles. It also forms part of broader efforts to develop domestic supply chains and encourage the localisation of EV production.
The programme builds on a 2022 policy that reduced import duties on fully built EVs and key components to 0% to support consumer demand. The measure comes as Southeast Asian countries continue implementing policies to attract EV investment, foreign direct investment and domestic supply chains. Thailand and Indonesia have introduced tax incentives and local production requirements, while Indonesia has also developed nickel-processing capacity to attract investment. Vietnam has implemented tax incentives to support EV adoption and localisation.
Although the Philippines remains a relatively small EV market compared with Thailand, Indonesia and Vietnam, sales have increased as foreign brands have expanded their presence. One example is VinFast, which outsold Tesla in the Philippines during the first half of 2026 among reporting automakers.
Mitsubishi among expected participants
Mitsubishi Motors Philippines is expected to be among the early participants in the EVIS Programme after Mitsubishi Motors Corporation committed to investing PHP 7 billion in the local production of a hybrid electric vehicle model.
The Japanese manufacturer had previously announced plans to produce a new hybrid model at its Laguna plant, south of Manila, by mid-2028. The company stated that it is prepared to support the government's plans through local hybrid EV production. Mitsubishi Motors Philippines welcomed the announcement and said it supports local automotive manufacturing and the Philippine automotive industry.
Industry reaction and market outlook
Mitsubishi Philippines Chair Noriaki Hirakata said the company is prepared to support the programme through local hybrid EV production.
Michael Ricafort, Chief Economist at Manila-based Rizal Commercial Banking, described the policy as a starting point for developing an EV production industry capable of adapting to both local and global market demand.
Edmund Araga, President of the Asian Federation of Electric Vehicle Associations, said approval of the EVIS Programme aligns with the country's EV roadmap.
The rollout of EVIS comes amid rising EV demand in the Philippines, partly driven by higher fuel prices. EV sales increased by 132.7% in the first half of 2026, while sales of internal combustion engine vehicles declined by 11.4% over the same period.
The programme, described by the government as the country's largest incentive package for vehicle manufacturers to date, has a maximum incentive allocation of PHP 60 billion (approximately US$ 1 billion). It is intended to support the Philippines' objective of becoming a regional automotive manufacturing hub by increasing local EV production, attracting investment and strengthening the country's automotive industry through fiscal incentives for participating manufacturers.
Incentive structure and eligibility
The EVIS Programme follows a framework similar to the Comprehensive Automotive Resurgence Strategy (CARS) Programme but provides a larger incentive pool. Under the scheme, participating manufacturers must register a specific EV model, part or component, commit a minimum capital investment of PHP 5 billion, and introduce their locally manufactured EV models within three years of registration to qualify for the incentives.
Manufacturers may register up to two EV models. The programme provides four slots in total, with each manufacturer permitted to enrol a maximum of two models.
Eligible participants can receive two forms of support. The first is Fixed Investment Support (FIS), which provides assistance for establishing or expanding manufacturing facilities for hybrid electric vehicles (HEVs), plug-in hybrid electric vehicles (PHEVs) and battery electric vehicles (BEVs). The second is the Production Volume Incentive (PVI), which provides incentives of up to 12% of the ex-factory price, capped at PHP 200,000 per locally manufactured vehicle, for up to 10 years from the start of production.
The support will be provided through non-transferable Tax Payment Certificates (TPCs) rather than direct cash subsidies. These certificates may be used to settle income tax, value-added tax (VAT), excise tax and import duty obligations to the national government.
An inter-agency committee comprising the Board of Investments (BOI), the Department of Budget and Management (DBM), the Department of Finance (DOF), the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC) has been tasked with developing a digital system for the application, issuance and use of the TPCs. EO No. 121 also assigns the BOI responsibility for implementing the EVIS Programme and overseeing applicant evaluation through a newly established inter-agency structure that includes the Department of Energy and the Department of Transportation.
The EVIS package covers up to 40% of eligible start-up costs for battery electric vehicle manufacturing and up to 30% for hybrid, plug-in hybrid and fuel-cell electric vehicle manufacturing. The production incentive is available only to manufacturers that commit to producing complete EVs or their required parts and components locally.
Applicants will also be assessed on planned production volume, expected economic impact, compliance with safety standards, and after-sales support, including battery recycling and the availability of spare parts for at least 10 years. According to the government, the programme is intended to create jobs, attract investment, support local manufacturing, reduce dependence on imported oil and increase the Philippines' participation in the global EV supply chain.
Successor to the CARS Programme
The EVIS Programme exceeds the PHP 27 billion incentive package provided under the CARS Programme, which was launched in 2015 to support local production of internal combustion engine vehicles. It also forms part of broader efforts to develop domestic supply chains and encourage the localisation of EV production.
The programme builds on a 2022 policy that reduced import duties on fully built EVs and key components to 0% to support consumer demand. The measure comes as Southeast Asian countries continue implementing policies to attract EV investment, foreign direct investment and domestic supply chains. Thailand and Indonesia have introduced tax incentives and local production requirements, while Indonesia has also developed nickel-processing capacity to attract investment. Vietnam has implemented tax incentives to support EV adoption and localisation.
Although the Philippines remains a relatively small EV market compared with Thailand, Indonesia and Vietnam, sales have increased as foreign brands have expanded their presence. One example is VinFast, which outsold Tesla in the Philippines during the first half of 2026 among reporting automakers.
Mitsubishi among expected participants
Mitsubishi Motors Philippines is expected to be among the early participants in the EVIS Programme after Mitsubishi Motors Corporation committed to investing PHP 7 billion in the local production of a hybrid electric vehicle model.
The Japanese manufacturer had previously announced plans to produce a new hybrid model at its Laguna plant, south of Manila, by mid-2028. The company stated that it is prepared to support the government's plans through local hybrid EV production. Mitsubishi Motors Philippines welcomed the announcement and said it supports local automotive manufacturing and the Philippine automotive industry.
Industry reaction and market outlook
Mitsubishi Philippines Chair Noriaki Hirakata said the company is prepared to support the programme through local hybrid EV production.
Michael Ricafort, Chief Economist at Manila-based Rizal Commercial Banking, described the policy as a starting point for developing an EV production industry capable of adapting to both local and global market demand.
Edmund Araga, President of the Asian Federation of Electric Vehicle Associations, said approval of the EVIS Programme aligns with the country's EV roadmap.
The rollout of EVIS comes amid rising EV demand in the Philippines, partly driven by higher fuel prices. EV sales increased by 132.7% in the first half of 2026, while sales of internal combustion engine vehicles declined by 11.4% over the same period.