The 8th Philippine Electric Vehicle (EV) Summit was held virtually, due to Covid-19, on September 24 to 26.
With 7.2 million EVs on the roads today, we have come a long way from eight years ago, and there is still so much more upside. While the global auto industry took a dive with Covid-19, sales of EVs were up 40 percent year-on-year (YOY)!
It was interesting to note that one of the opening speakers, Department of Trade and Industry (DTI) Secretary Ramon M. Lopez said “EVs will only become popular in the country if the price won’t be too prohibitive, if they can charge fast and if they run far enough per charge.”
Secretary Lopez certainly hit the nail on the head with that succinct analysis. While our government may be willing to provide both financial and non-financial incentives for the development of the Philippine EV industry, it would never get off the ground unless those three conditions are met.
The three EV manufacturers in the Philippines that were specifically mentioned by Secretary Lopez were Tojo Motors, Bemac and Star 8. Among these three companies, only Tojo Motors is truly Filipino and has focused on what Secretary Lopez has said.
Given the limited resources, support and subsidies Philippine companies get from our government, the only way you can be commercially viable is by largely relying on your own resources and knowing how to adapt to a highly competitive environment. Certainly, Tojo Motors, founded by my friend and business associate Ralph Legaspi deserves praise and recognition for going against the odds and supplying hundreds of his locally made EVs in the Philippine market.
In order to have a commercially viable operation, Tojo Motors addressed the three main issues holding back the popularity of EVs in the Philippines by focusing on the transport sector with a fixed franchise route and the planned jeepney modernization.
The first issue is the cost. EVs tend to be 50 percent to 100 percent more expensive than the traditional vehicles powered by an Internal Combustion Engine (ICE) due to the high cost of the battery.
In order to address this issue, the lithium ion batteries were not sold with the vehicle but simply “leased out” on a per use basis, equalizing the initial investment. This makes sense because no one really buys a car with a lifetime supply of gasoline or diesel.
The second issue was the amount of time needed to charge the battery. Since, the EVs were used in the public transport system, they operated on a closed loop with a fixed route. This allowed for the battery to be simply “swapped” rather than charged with the “swapping” station located along the franchise route. This allowed the waiting time to be reduced from hours to simply the same amount of time it would take for an ICE to be loaded up with diesel in a regular gas station.
Finally, the third issue of the range became a non-issue with public utility vehicles with a fixed franchise route. The EV supplier, like Tojo Motors, would simply provide batteries with enough capacity to complete the route with a little allowance.
Not much different from the conventional PUV drivers having the habit of frequently loading small amounts of diesel in their Jeepneys. This makes sense since the cost of the batteries for the supplier can be minimized plus it makes the battery swapping of fewer or smaller batteries much faster.
Now if only our government had more people like Secretary Lopez, I think the EV industry can take root in the Philippines much faster. That only leaves us with one major problem, end user financing. Paging the government banks to come to the rescue, but I guess that is for another column.
Comments may be sent to firstname.lastname@example.org.