The global energy crisis, intensified by the war in Iran and compounded by long-standing concerns over climate change, has accelerated the worldwide shift toward electric vehicles (EVs), pushing governments and automakers to rethink how people are transported and goods are moved. The Philippines — notorious for its traffic congestion and known for progressive green energy legislation — appears well positioned to capitalize on the trend, and recent developments suggest the transition is already under way.

Congestion and Clean Energy Foundations

The case for electric mobility in the Philippines begins with the cost of transportation and the time Filipinos spend on the road.

According to the 2025 TomTom Traffic Index, the country recorded a congestion level of 45%, making it the most congested in Asia. Manila ranked 40th among the world's most congested cities, with an average congestion level of 57%, while Davao City placed 12th globally at 66.2%.

Urban planning specialist Felino "Jun" Palafox, Jr. has warned that Filipinos could lose years of their working lives to commuting Speaking in an interview on ANC's Early Edition, he estimated that a person spending five to six hours a day traveling over a 40-year working life could lose between nine and 15 years to commuting.

EV adoption alone cannot resolve traffic congestion, but electrifying public transportation and commercial fleets could significantly reduce petroleum consumption while supporting efforts to modernize the country's transport system.

The transition also builds on existing energy policy. The Electric Power Industry Reform Act (EPIRA), enacted in 2001, liberalized the power generation sector and introduced competitive mechanisms intended to improve market efficiency. Republic Act No. 9513, the Renewable Energy Act of 2008, established incentives for renewable energy investments, including income tax holidays and other fiscal benefits.

Opportunities for foreign investment have expanded as well. Following a 2022 Department of Justice opinion clarifying that solar, wind, hydro, and ocean or tidal energy are not covered by constitutional restrictions on foreign ownership of natural resources, the Department of Energy (DoE) adopted an interpretation allowing full foreign ownership in these technologies. Three years later, in February 2025, the DoE had awarded more than 1,400 renewable energy service contracts with a combined potential capacity of approximately 154 gigawatts.

Policy momentum has continued since then. The Philippines introduced 13 clean energy policies between February and August 2026 — the highest number among six major Southeast Asian economies tracked during the first six months of the Iran war — according to a report by research group Zero Carbon Analytics cited by Power Philippines.

Oil Shock Ripple Effects

The conflict in Iran has added a further driver, intensifying pressure on oil-importing economies and prompting motorists and businesses to reconsider their dependence on petroleum.

In the United States, the EV market entered 2026 facing headwinds after federal subsidies expired and domestic automakers scaled back some electric vehicle investments. Sales in the final quarter of 2025 fell to their lowest level since late 2022. However, used EV sales rose 12% year on year during the first quarter of 2026 and climbed 17% from the previous quarter. Higher gasoline prices, which exceeded $4 per gallon for the first time in four years, were among the factors that may have encouraged consumers to consider electric alternatives.

Europe experienced similar developments. The United Kingdom recorded 86,120 electric car sales in March, while EV leasing inquiries at Octopus Electric Vehicles increased by 36% following the outbreak of the conflict. French online used-car retailer Aramisauto reported that EVs' share of sales nearly doubled between Feb. 16 and March 9, rising to 12.7% from 6.5%.

The Philippines has felt the impact particularly keenly because the country imports nearly all of its fuel and depends heavily on petroleum for transportation. Gasoline prices increased by 68.3% following the US-Israeli strikes on Iran in late February, according to GlobalPetrolPrices.com data cited by Reuters, placing the Philippines among the countries experiencing the steepest fuel price spikes globally.

The price surge produced trends similar to those in the US and Europe. EV registrations, including hybrids, rose by 130% year on year to more than 67,000 during the eight months through August, according to Patrick Aquino, director of the DoE's Energy Utilization Management Bureau.

The Marcos Administration's Manufacturing Push

With the crisis stoking demand for more EVs, the Marcos administration is seeking to turn growing demand into an opportunity for domestic manufacturing.

President Ferdinand R. Marcos, Jr. said the government was assessing existing vehicle manufacturing facilities to determine the upgrades and support needed to produce electric vehicles locally. During a visit to MD Juan Enterprises, Inc. in Caloocan City, he discussed plans to manufacture electric tricycles and jeepneys in the country.

The initiative follows Executive Order No. 121, which established the Electric Vehicle Incentive Strategy (EVIS) to attract investments in EV manufacturing and assembly, encourage domestic component production, and strengthen the Philippines' participation in the regional automotive supply chain.

The program carries a fiscal support ceiling of P60 billion. Qualified manufacturers must invest at least P5 billion in capital and introduce locally manufactured EV models within three years of registration.

Eligible participants may receive fixed investment support equivalent to 40% of qualified capital expenditure for battery electric vehicles and 30% for hybrid, plug-in hybrid, and fuel cell vehicles. They may also qualify for production incentives of up to 12% of the ex-factory unit price, capped at P200,000 per vehicle and subject to minimum production requirements.

Mitsubishi Motors Philippines Corp. said its parent company would participate through a P7-billion investment to manufacture hybrid vehicles locally. With that commitment on the table, an early marker of the program's traction will be whether other manufacturers step forward to meet the P5-billion investment threshold and the three-year deadline for fielding locally made models.

The incentives could encourage automakers to expand domestic operations, create employment, and develop technical capabilities in vehicle assembly and component production. Their impact will depend on actual investments, production volumes, and the availability of skilled workers, reliable electricity, and supporting infrastructure.

Outlook

The global energy crisis has accelerated interest in electric mobility, giving the Philippines an opportunity to reduce its exposure to imported fuel and develop its automotive manufacturing base. Converting that interest into sustained growth will require affordable vehicles, accessible charging facilities, and investments that support local production.

With coordinated policies across transportation, energy, and manufacturing, the country could build an EV industry that responds to immediate fuel pressures while creating opportunities for businesses and Filipino workers. The near-term signals to watch are concrete: manufacturer sign-ups under EVIS, the first locally assembled electric tricycles and jeepneys, and the pace at which charging facilities are built out.

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This article is a standardized English rewrite of a report by Jomarc Angelo M. Corpuz, first published by BusinessWorld on October 16, 2026. Original: Electric vehicles gain ground as energy crisis accelerates Philippine electric mobility