While interest in traditional internal combustion engines remains strong in the Philippines, hybrids emerge as a critical step towards electrification.
In the Philippines, a notable shift is occurring in the automotive market as consumers start to warm up to electrified vehicles, albeit slowly. Though 34% of Filipinos express a preference for hybrid or electric vehicles in their next purchase, this figure still lags behind many Southeast Asian neighbors. Nevertheless, the government’s initiatives are paving the way for a transition towards hybrid models as an initial step.
Deloitte’s recent study highlights that Filipino consumers are increasingly considering hybrids: 20% favor hybrid electric vehicles (HEVs), while 11% are inclined towards plug-in hybrids (PHEVs), and only 3% prefer fully battery electric vehicles (BEVs). While this marks an improvement from previous years—where 68% favored traditional internal combustion engines (ICE)—it still places the Philippines near the bottom of the regional rankings.
For context, Thailand tops the list at 58%, followed by Vietnam at 40%, and Malaysia at 31%. The increase in local interest for electrified vehicles is significant, with sales rising sharply. In 2025, electrified vehicle sales reached 58,905 units, representing a 12% market share of the total vehicle sales of 491,395. This figure represents an impressive growth of 142.5% compared to 2024.
The rising trend continues into 2026, with xEV sales—comprising HEVs, PHEVs, and BEVs—climbing 132% in the first half, despite an overall vehicle sales decline of 11.4%. By mid-2026, the Philippines recorded sales of 31,381 electrified vehicles, demonstrating a burgeoning market that newcomers might seamlessly tap into. Notably, Filipino consumers exhibit a high willingness to switch brands, with a reported 68% indicating they plan to choose a different brand for their next vehicle, creating openings for emerging manufacturers.
READ: A new Mitsubishi hybrid is coming. But don’t expect a pure EV anytime soon.
Mitsubishi's Strategic Focus
While the long-term vision may be full electrification, Mitsubishi Motors Philippines is taking a measured approach by focusing on hybrids. Chairman Noriaki Hirakata made it clear that there are no plans for a pure BEV launch yet, citing the challenges associated with local charging infrastructure and the slower-than-desirable global adoption of EVs. Instead, Mitsubishi is investing in HEVs and PHEVs as transitional models.
Government Incentives Drive Change
Mitsubishi’s strategic pivot comes in light of the government’s Electric Vehicle Incentive Strategy (EVIS), which promises up to P60 billion in total incentives, with specific caps and requirements that manufacturers must meet. Notably, manufacturers can register two models with a minimum capital investment of P5 billion, and must introduce locally manufactured EV models within three years.
- Incentives can reach up to P15 billion per enrolled model.
- At least P5 billion in new investment is mandatory.
- Must build locally within specified timelines.
The incentives aim to address production disparities; Mitsubishi revealed production figures contrasting with the higher outputs in countries like Thailand and Indonesia. By incentivizing local production, the government hopes to bolster the automotive industry while addressing competitiveness challenges.
Mitsubishi's Commitment
Key to Mitsubishi’s investment in the Philippines is its status as the company’s largest market outside Japan, making it essential for Mitsubishi’s long-term strategy. The firm has committed not just to hybrids but also to long-term investments in local manufacturing, including sourcing components like battery packs within the country.
Despite the promise of EVIS, Mitsubishi and other manufacturers remain cautious due to past experiences with incentive programs. Concerns have arisen about payment delays, which have previously undermined similar initiatives. This has led to calls for more reliable frameworks to ensure commitments and payouts are met without protracted delays.
Looking Ahead
The landscape for hybrid and electrified vehicles in the Philippines is evolving quickly. Mitsubishi’s early engagement with EVIS could inspire other manufacturers to follow suit, emphasizing the importance of executing these incentives effectively. For the automotive sector, the emphasis will soon shift towards actualizing investments and solidifying local EV production while nurturing consumer confidence in electrified vehicles for the future.
With emerging interest in electrification, the automotive journey in the Philippines appears poised for growth, albeit through a gradual bridging phase via hybrids. Only time will tell how effectively the industry adapts to consumer preferences and government strategies.
Discussion
Sign in to join the discussion.