Rationale for the US-ASEAN Electric Vehicle Initiative – The Diplomat

Rationale for the US-ASEAN Electric Vehicle Initiative

Tesla Model S electric car on display in Zhengzhou city, Henan province, China, 4 November 2018.

Credit: Depositphotos

How follow up to what he promised at the special US-ASEAN summit earlier this year, President Joe Biden proposed to create US-ASEAN initiatives on electric vehicles at this month’s US-ASEAN Summit in Cambodia.

By announcing this initiative, the flagship initiative of the US-ASEAN Transportation Dialogue Partnership, Biden looks forward to working with his ASEAN counterparts to build an integrated electric vehicle (EV) ecosystem in Southeast Asia. In particular, the initiative will focus on the development of a regional electric vehicle infrastructure, the introduction of electric vehicles throughout the region, and the development of solutions and technologies for electric vehicles in the region. In addition, the United States will also help ASEAN create an ASEAN roadmap for the adoption of electric vehicles.

First, the Initiative should be understood as a continuation of the Biden administration’s domestic agenda. Biden’s passion and support for US-made electric vehicles was evident even during his presidential campaign. In addition to the claim that electric vehicles are future American auto industry pledge become more involved in supporting the development of electric vehicles in the United States. Recently, Biden even stated that electric vehicles were integral to the restoration of American greatness.

Since taking office, Biden has taken concrete steps to advance the production and adoption of electric vehicles in the United States. With a bipartisan Infrastructure Investment and Jobs ActFor example, the Biden administration could invest $7.5 billion in electric vehicle chargers, more than $7 billion in critical minerals and other components needed to make electric vehicle batteries, and more than $10 billion in environmentally friendly transport and school buses. While there are no articles specifically dedicated to electric vehicles in the recently passed Science and Chips Act, the Act will also stimulate their development, because sufficient and advanced chips are critical to the future of electric vehicles. In doing so, the Biden administration is trying to set the stage for a boom in electric vehicle manufacturing and the electric vehicle supply chain in the United States.

Considering huge Southeast Asia market potential, the US-ASEAN Electric Vehicle Initiative could facilitate trade in electric vehicles between the US and the region and create more export opportunities for electric vehicle manufacturers that have factories in the United States. In this sense, working with ASEAN is also important for the US. region lower labor costs and an abundance of minerals, which are critical to the production of electric vehicles, will help the US in creating a safer supply chain.

Do you like this article? Click here to sign up for full access. Only $5 per month.

Second, the Initiative could also serve as part of the United States’ strategy to compete with China for global leadership in electric vehicles. The Biden administration has long been unhappy US EV market shareespecially when compared to China. Since then he has promisedsurpass China” in the electric vehicle industry. In recent years, more Chinese electric vehicle manufacturers are entering Southeast Asia and looking to expand their business in the region. For example, BYD, Great Wall Motor (GMW), Hozon and Aiways have everything delivered of their electric vehicles in Southeast Asia. SAIC-GM-Wuling (SGMW) as well as BYD accordingly localized their own production of electric vehicles in Indonesia and Thailand. Besides, BYD has entered into a partnership agreement with the Singapore Agency for Science, Technology and Research in the field of research and development of an electric vehicle system for public transport.

It appears that China’s efforts have already yielded some positive results. the date shows that the market share of Chinese electric vehicle manufacturers in Thailand is expected to grow from 58 percent in 2021 to around 80 percent this year. With the new initiative, it seems the Biden administration is looking beyond cars per se when competing with China in Southeast Asia; it aims to build a regional electric vehicle ecosystem using American solutions and technologies, from the production of electric vehicles to the creation of electric vehicle infrastructure, such as charging stations.

Shortly after the Biden administration decided to launch the US-ASEAN Electric Vehicle Initiative in Cambodia, China’s state media Global Times commented that it was just “symbolic gesturewhich the US used to court ASEAN instead of cooperating to “achieve a truly prosperous and peaceful ASEAN” as claimed by China.

But it is likely that US pledges to Southeast Asia will not be matched with resources. Speaking at the US-ASEAN summit in Phnom Penh this month, Biden announced that he has requested $825 million for all kinds of aid to Southeast Asia in 2023, which is a mere drop in the bucket in terms of the region’s needs. While Biden may pay for additional electric vehicle projects in Southeast Asia, it remains unclear how much follow-up will be.

Regardless of the outcome, the announcement of the initiative will no doubt increase the already intense competition for electric vehicles in Southeast Asia. While the Biden administration takes over protective as well as introverted relations with its allies on electric vehicles, this initiative is one of the earliest attempts by the US to cooperate internationally on electric vehicles, along with another recent agreement with Mexico. Given that the US willcompete vigorouslyAs for China, it is likely that the electric vehicle industry, especially in Southeast Asia, will soon become another hotspot of Sino-American competition.