ADVANCE STRATEGIC MANAGEMENT

PERFORMANCE TASK #2 - VOLATILITY

Hazel C. Gascon

Automotive Industry witnessed and experiencing the rapid changes of the owner or customers
in adopting to Electronic Vehicles. Currently, traditional gasoline powered vehicles like,
jeepneys, tricycles, motorcycles and even bike are Volatiles is this fast-changing shift in the
preference of Electronic Vehicles. The fast faced technology in adaptation and advancements of
these EVs and making competitive forces in the market. The future of Electric Vehicles by 2030
will reach more than six million units in the Philippines, 83.12% of which are two-wheelers;
5.29% passenger cars; 4.53% three-wheelers; 4.53% are other utility vehicles and the rest
include public utility jeepneys, trucks and buses. Data from the Electric Vehicle Association of
the Philippines (Evap)showed that there were 2,536 EV units sold in the local market from
January to March 2023, marking a 495.3% growth compared to the 426 EV units sold for the
whole of 2022. Last year, the energy department estimated that there were about 9,000 EVs
and 300 charging stations in the Philippines. Electric tricycles and motorcycles comprise the
majority of EVs currently on the road, while electric cars, which are much more expensive that
conventional vehicles, make up only 1% of the market.
Spiraling energy prices could slow down growth of the electric vehicle (EV) and insurance
market going forward as the savings from charging this type of vehicle compared to filling a tank
with petrol or diesel are narrowing. In addition, consumers also face having to pay more
expensive premiums to insure their EV compared to traditional petroleum-fueled ones.
Government-led initiatives around the world have focused on the transition towards net-zero
emission targets, favoring the greener EVs over their combustion-engine predecessors – petrol
and diesel cars. With a ten-fold growth projected, understanding and pricing the risk profile of
these new vehicles without decades of data and experience has become a pressing need for
insurers. However, unprecedented energy price hikes at a time when inflation has shot up will
bring volatility in the shift towards the electrification of vehicles.
EVs are more expensive to buy than traditional petroleum-fueled ones, but drivers would
typically make savings on the cost of driving as charging them was significantly cheaper than
running a petrol or diesel car. EVs are also more expensive to insure, with someone with a petrol
or diesel car typically paying to insure their car, while those with an EV are paying an extra.
Claim costs are higher for EVs owing to expensive batteries, advanced in-vehicle technologies,
and constrained supply chains – all of which drive premiums up. Now that the cost-of-living
crisis has caused a surge in EV charging costs, any potential savings are becoming slimmer.
Prices to charge on publicly accessible chargers have gone up by 42% since May 2022. Drivers
using public infrastructure to charge their EV will save less than P1 per kilometer compared to
those with a petrol car driving at 40 kilometers per gallon. While the situation is not as bleak for
those charging at home, not everyone has a driveway to do so.
This brings the question of whether EVs will become less attractive to consumers, considering
that they would also need to splash out more cash when buying them – and to insure them – at
a time when most are seeking to cut costs. If energy prices continue to go up, savings for EV
owners will fall further, potentially making this type of vehicle less attractive to consumers who
cannot charge their vehicle at home or are less concerned about green technologies.
Governments will need to find ways to ensure net-zero emission targets are met despite the
headwinds.
Even the high prices of the EVs, their maintenance and also the charming stations created for
them, it is much more convenient for the owner and passenger to buy these kind of EVs.
Because of the emerging opportunities in the manufacturing sector include not just the
production of batteries but also the EVs for public transportation. The government is still
finalizing the guidelines for the accreditation and registration of EV charging station providers.
Our better solution for these Volatility to create a better EV ecosystem, like the initiatives of the
public and private sectors, EV charging stations ae becoming available nationwide. DOST has
developed an EV charging system for commercial use. The development of a local industry for
charging equipment is expected to generate export revenues, upskill workers and create jobs to
Filipinos. I would suggest with the emergence of these EVs, rules and regulations particularly on
our traffic sector, must have a strong policies regarding the use of these EVs on our main road
and thoroughfare, Drivers of EVs should have a license same as the drivers of the traditional
vehicles, let the EV’s be registered, because they are also occupying the road same as the
traditional vehicles. Invest more on our Research and Development and innovate EVs, parts and
services, to cope up with the changing environment cater to our customers. Leaders, Managers
and Employees should conduct a training program for the advancement of these new
technologies bought by these Electronic Vehicles. By partnering in our Southeast Asian
neighbors, Philippines has a huge potential as a market and manufacturing hub for EVs. IT is the
world’s second biggest supplier of nickel, which is used to make EV battery cells.