What if the Philippines had invested $11 million in Tesla in 2015, instead of giving incentives to Toyota and Mitsubishi?

With a stroke of a pen, President Ferdinand Marcos Jr’s vetoed the ₱4.32 billion ($72.85 million) allocation for the Comprehensive Automotive Resurgence Strategy (CARS) scheme (and its RACE successor) in the 2026 budget, dealing a huge blow to wasteful spending.

The CARS/RACE scheme would have meant billions of pesos in Filipino taxpayers' money going into fossil-fuel assembly lines.

The key benefiaries: foreign manufacturers and local buyers, specifically of Toyota Vios and Mitsubishi Mirage/Mirage G4, key models enrolled under CARS.

From 2016 to 2025, an estimated ₱6.525 billion ($110 million), formed part of the annual Philippine government budget earmarked for CARS (later replaced by RACE, or Revitalising Automotive Industry for Competitiveness Enhancement).

There are conflicting reports of the actual amount of government incentives and direct subsidies given to the industry.

In theory, carmakers were picked to boost local production, parts localisation (40-60%), with up to ₱9 billion in incentives per model (i.e. Toyota Vios).​

Originally, the Philippine government vowed to provide an average of ₱4.5 billion ($100.7 million) worth of incentives per year, or a total of ₱27 billion in six years.

The plan aimed for the production of at least 600,000 vehicles and generate economic activity worth ₱300 billion over its six-year life, Reuters reported.

CARS promised to boost Philippine auto manufacturing in exchange for investments, "technology transfer", and job creation. 

RACE, its more flexible sibling, aimed for 100,000 ICE vehicles with up to 40% capital subsidies. 

Malaya Business Insight reported that the Philippine government had "arrears" amounting to ₱3.99 billion (in tax payment certificates) from the two Japanese automakers under CARS.

Rappler, on the other hand, reported that fiscal support arrears amount to ₱4.32 billion ($72.85 million) under the CARS program and ₱250,000 under RACE.

The "arrears" under the CARS scheme refer to accumulated unpaid "fiscal incentives" owed by the Philippine government to car manufacturers (i.e. Toyota and Mitsubishi).

These "obligations" — primarily tax credits, duty exemptions, and cash grants from the ₱27 billion cap under the scheme — reportedly went undisbursed due to repeated delays in budget releases via the National Expenditure Program (NEP).​

Regardless of the actual total, one thing is certain: Neither CARS nor RACE will receive support from the government in 2026.

The CARS programme (created by Executive Order 182, in 2015) artificially props up local production of cheap sedans.

Apart from creating token jobs and propping up cheap car models, however, these programmes never produced a decent Philippine internal combustion engine (ICE)-based ecosystem. 

Worse, it deprives the Philippines of a front seat in the EV revolution.

Following the CARS budget veto, Toyota Motor Philippines (TMP) President Masando Hashimoto lamented: “TMP made major investments to meet the target of 200,000 units of the Toyota Vios within the 6-year time frame... We believe it has been a win-win concept... sustained government support through industry development programs such as CARS is critically important for competitiveness as observed in the region.”

Toyota, a global giant that netted ¥4.79 trillion ($50.549 billion) in profits in FY 2025, has dominated the Philippine car scene since at least the 1970s.

Hashimoto's part in his speech is a PR spin at best, and a veiled threat (to move Toyota Vios production out of the Philippines) at worst.

The result: Filipino taxpayers end up subsidising these car giants making entry-level Vios models supposedly affordable — <₱1 million range — while distorting markets.

This keeps gas-dependent ICE cars dominant in the Philippines, ignoring massive oil import bills (90% of needs) and pollution. 

If it goes unchecked, such subsidies amount to a bottomless money pit, driving a vicious cycle of oil dependence>high fuel import costs>pollution>subsidies>delayed transition to renewables.

In short: It deliberately keeps the country backward when taxpayers' money would be better spent preparing for the future.

The flipside: it starves EV rollout and innovation.

Which begs the question: What if 10% of the $110 million for CARS/RACE, (about $11 million) was invested in Tesla in 2016 (at $14.89/share split-adjusted on January 4, 2016)?

Based on market data, it would have bought ~738,611 shares, worth $328.7 million today — a 30X increase.​

If Manila had put in another $33 million into Joby Aviation back in January 2020, that stake would now be worth about $99 million — a clean 3× return, even before Joby has flown or sold its first commercial electric air taxi.

Which raises an awkward question: why did Toyota sink $800 million into Joby, while at the same time lining up for government subsidies from Manila every budget cycle under programs like CARS and RACE?

And if EVs are supposedly a bad idea, then how do you explain Toyota rolling out the bZ3 — essentially an “electric Corolla”?

An even wiser option: why not provide similar incentives to boost local processing of EV-critical minerals like nickel, instead of exporting nickle ore to processors (mostly in China), allowing the Philippines to ride the "nickel-boom", alongside Indonesia.

In practice, local ICE parts makers stayed stuck in outdated tech, with no self-driving solution in sight, amid decades-long protection. 

ICE jobs will inevitably join Dodos. Contrast this with Asia's EV frontrunners. Vietnam exploded with VinFast EVs: sales hit 200,000 units in 2025, despite starting from scratch, with an initial $1.5-billion capital. 

India slashed GST to 5% on EVs, aiming 30% penetration by 2030 via PLI schemes. Pakistan launched 50,000 EV units yearly with tax breaks.

That's to say nothing about China's BYD, CATL, Geely and others, which dominate globally, exporting affordable EVs to markets where ICE cars are already gasping for their last breath.

These nations bet on future-proof tech, luring FDI in batteries and charging centres — while the Philippines babysit 20th-century sedans, tinkering with Vios. 

President Marcos Jr’s budget veto on CARS/RACE forces reality. 

Pleas for "mutual trust" ring hollow — regional "competitiveness" means Thailand's EV hubs or Indonesia's nickel-powered giga-factories, not cheap-car subsidies.

Would the veto on CARS/RACE unlock EV acceleration? It's early days.

One thing is clear: Any country ramping up ICE vehicle production courts doom. A pivot to EVs would curb oil import bills amounting to ₱1.2 trillion ($19.9 billion in 2024).

EVs slash emissions, create skilled green jobs, and drives demand for the country's critical minerals (nickel, copper). The Philippines, too, has significant untapped reserves of rare earth minerals (REEs).

EVs already comprised 20% ASEAN car sales in 2025, led by Singapore and Vietnam (at around 40%), Philippines at a measly 6%.

EV push is a magnet for foreign direct investments, new tech and a win for energy security.

The 120 million or so Filipinos today deserve wheels for 2050, not 1980. Ditch the subsidies; embrace the charge.