Vetoing of CARS, RACE fundings to affect EV industry too, group claims

MANILA: The Electric Vehicle Association of the Philippines (EVAP) joined industry player who have expressed their concern over the non-inclusion of the fundings for automotive industry-related programs in the 2026 national budget.

In a statement, the organization — led by its president Edmund Araga — said that the intended allocation for the Comprehensive Automotive Resurgence Strategy (CARS) and Revitalizing the Automotive Industry for Competitiveness Enhancement (RACE) programs must be reinstated to ensure the electric vehicle industry’s growth.

According to them, the country’s push toward electric vehicles will stall without a strong domestic automotive manufacturing base.

To recall, both the Chamber of Automotive Manufacturers of the Philippines, Incorporated  and the Philippine Parts Makers Association expressed their worry over the vetoing of the two allocations for the said programs intended to receive funding under this year’s “unprogrammed funds.”

This was also the sentiment of Senate Finance Committee Chair Sherwin Gatchalian when he mentioned that Toyota and Mitsubishi should have been enjoying the tax incentives some four to five years back.

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Although welcoming Marcos administration’s boost in the EV industry by way of incentives, charging infrastructure development, and renewable energy integration, EVAP said that electric vehicles (EV) cannot be developed separately from the wider automotive ecosystem.

“Electric vehicles are still vehicles. They use the same platforms, supply chains, production facilities, and skilled workforce as conventional vehicles. If local automotive manufacturing weakens, EV production — local or otherwise — will struggle to scale,” Araga was quoted as saying.

EVAP noted that CARS and RACE were both made to rebuild local vehicle assembly volumes, anchor major investments from original equipment manufacturers (OEM), and strengthen the domestic parts manufacturing sector.

Additionally, the group warned that the Philippines might lose what it has left in automotive production — at a time when neighboring countries in the region are rapidly expanding.

“The pattern is very clear. No country jumped straight into EVs without first building volume and capability in conventional automotive manufacturing. EVs are not a replacement for the auto industry — they are its evolution,” Araga declared.

EVAP also highlighted that local vehicle assembly is important in vehicle production as well as in sustaining availability of parts like wiring harnesses, electronics, body panels, thermal systems, and eventually batteries and power electronics.

Without sufficient production volume and long-term policy support, investments in these components become commercially unviable, the group believed.

Moreover, EVAP said that fewer locally-assembled vehicles might result to higher dependence on imports, weaker supplier networks, and lesser opportunities to localize future EV models — leaving the country permanently lagging as ASEAN transitions to electrified platforms.

Meanwhile, EVAP called for a balanced transition strategy that allows ICE vehicles, hybrids, and EVs to coexist while local manufacturing scale is rebuilt.

“Supporting CARS and RACE today strengthens our ability to assemble EVs locally tomorrow,” Araga explained. “If we want Philippine-made EVs in the future, we must first protect and grow Philippine automotive manufacturing today.”

If included in the national budget’s final version, CARS and RACE would have had a P4.32 billion- and P250 million-budget, respectively.

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