EARLIER this week, Trade Secretary Cristina Roque ended months of speculation about the future of the Revitalizing the Automotive Industry for Competitiveness Enhancement (Race) program, announcing that the Department of Trade and Industry (DTI) would no longer pursue it, and would put its efforts into rolling out the Electric Vehicle Incentive Strategy (Evis). Although the Race program was effectively canceled when President Ferdinand Marcos Jr. vetoed its proposed P250-million budget for 2026 back in January, intense lobbying by the local automobile sector to retain the program kept the dream alive for a brief period. The onset of the energy crisis caused by the US-Israel war against Iran seems to have provided the government with the perfect justification to put the final nail in Race’s coffin.
In her comments to the media on Wednesday, Roque confirmed that the decision to finally drop the Race program signaled a firm policy shift toward electrified transport. The general goal of attracting investors to build up a local automotive manufacturing industry remains the same; it has simply shifted focus from internal combustion engine vehicles to hybrid and electric vehicles (EVs).
Roque could not provide any details about the new Evis program, as it still requires an executive order from the president, something she said could be expected within the next three months.
However, the Evis program is rumored to be bigger in terms of the amount of fiscal incentives offered and the target production of vehicles than the original Comprehensive Automotive Resurgence Strategy (Cars) program, the predecessor to Race. Mitsubishi Motors Corp. has reportedly already expressed its intention to sign on to the Evis program, under which it could produce what would be the Philippines’ first locally assembled hybrid vehicles by mid-2028.
The timing of Roque’s announcement was certainly spot-on, as the growing concern over fuel supplies and prices has drawn attention to EVs as an economical alternative. Vehicle sales data for March, i.e., since the start of the war in the Middle East, is not yet available, but even before that, EV sales have been growing at an explosive pace. Through February, 5,708 sales were logged for the year so far, a 66.9-percent increase year on year from the 3,416 units sold in the first two months of 2025. Sales for the month of February this year reached 3,098 units, 18.7 percent higher than January’s 2,610 sales.
As promising as the prospect of the Evis program is, it will only be successful if the government applies the lessons that should have been learned from the results of the Cars and Race programs, which, while not exactly failures, were much less than hoped. The Cars program was launched in 2015 during the administration of the late president Benigno Aquino III, and offered fiscal and nonfiscal incentives to automakers that produced at least 200,000 units of a registered model over six years. The Race program was intended to be a scaled-back replacement for Cars once the latter expired, offering incentives to automakers producing at least 100,000 units of a registered model.
The rationale for the two programs was that by incentivizing the assembly of a few marketable auto models, the local value chain of parts and supplies would build up as well, creating an infrastructure that would attract other manufacturers. That did not happen; although three manufacturers were sought for the programs, only two, Mitsubishi and Toyota, ever signed up for it. While they did assemble enough models to qualify for the incentives — the Mitsubishi Mirage G4 and the Toyota Vios, respectively — the volume of vehicles they assembled just matched the local demand, with that never growing enough to attract a third player.
The biggest reason the incentive scheme did not catalyze the growth everyone was hoping for was the existence of the scheme in the first place. Any manufacturers beyond the initial three that could be accepted could not avail of the same incentives, which would put them at a competitive disadvantage.
If the new Evis program is set up with the same sort of limitation on the number of participants, it will almost certainly fall short of expectations in the same way as the programs that preceded it. Avoiding this pitfall is perhaps even more challenging this time around, as the Philippines is a latecomer to the intensely competitive EV sector, where the fastest-growing brands, such as China’s BYD and Vietnam’s Vinfast, are helped by massive government support.
