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

As a follow-up to what he promised at the US-ASEAN Special Summit earlier this year, President Joe Biden proposed the establishment of the US-ASEAN Electric Vehicle Initiative at the US-ASEAN Summit in Cambodia this month.

In announcing the initiative, a key initiative of the US-ASEAN Transportation Dialogue Partnership, Biden hopes to work with his ASEAN counterparts to build an integrated electric vehicle (EV) ecosystem in Southeast Asia. Specifically, the initiative will focus on the development of the region’s EV infrastructure, the adoption of EVs across the region, and the development of EV solutions and technologies for the region. In addition, the United States will also assist ASEAN in creating an ASEAN Roadmap for EV implementation.

First, the initiative should be understood as an extension of the Biden administration’s domestic agenda. Biden’s passion and support for made-in-the-US EVs was also evident during his presidential campaign. In addition to stating that EVs are the future of the American auto industry, he promised to play a more active role in the development of US EVs. Recently, Biden also said that EVs are an integral part of restoring American greatness.

Since taking office, Biden has taken concrete steps to promote the production and adoption of EVs in the United States. With the bipartisan Infrastructure Investment and Jobs Act, for example, the Biden administration could invest $7.5 billion in EV chargers, more than $7 billion in the provision of critical minerals and other components needed to produce EV batteries, and more than $10 billion in clean. Transportation and school buses. Although the recently passed Science and Chips Act does not contain any articles that specifically address EVs, the legislation will also spur their development, as adequate and advanced chips are critical to the future of EVs. In doing so, the Biden administration is trying to build the basis for an EV manufacturing boom and EV supply chain in the United States.

Given Southeast Asia’s huge market potential, the US-ASEAN Electric Vehicle Initiative could facilitate EV trade between the US and the region and create more export opportunities for EV manufacturers with factories in the United States. Working with ASEAN is also essential for the US in the sense that the region’s low labor costs and abundance of minerals that are important for EV production will help the US establish a more secure supply chain.

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Second, the initiative could also serve as part of the United States’ strategy to compete with China for global EV leadership. The Biden administration has long been dissatisfied with the US market share of EVs, especially compared to China. It has since vowed to “beat China” in the EV industry. In recent years, a growing number of Chinese EV manufacturers have entered Southeast Asia and are eyeing business expansion in the region. For instance, BYD, Great Wall Motor (GMW), Hozon and Aiways have all delivered their EVs in Southeast Asian countries. SAIC-GM-Wuling (SGMW) and BYD have localized their own EV production in Indonesia and Thailand, respectively. In addition, BYD has partnered with Singapore’s Science, Technology and Research Agency on the research and development of EV systems for public transport.

It appears that China’s efforts have already yielded some positive results. The data shows that the market share of Chinese EV manufacturers in Thailand is expected to increase from 58 percent in 2021 to about 80 percent this year. With the new initiative, it appears the Biden administration is looking outside the box when competing with China in Southeast Asia; It aims to shape the region’s EV ecosystem with US solutions and technologies, from EV manufacturing to building EV 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 outlet Global Times commented that it was merely a “symbolic gesture” that the US was using to woo ASEAN, “to really achieve instead of cooperating.prosperous and peaceful ASEAN,” as he claimed that was China’s goal.

But it is likely that American promises to Southeast Asia will not be matched by resource commitments. Addressing the US-ASEAN summit in Phnom Penh this month, Biden announced that he had requested $825 million in all forms of aid to Southeast Asia in 2023, a mere drop in the dollar relative to the region’s needs. While Biden may pay for more EV projects in Southeast Asia, it’s unclear how much follow-up there will be.

Regardless of the outcome, the announcement of the initiative will undoubtedly intensify the already intense EV competition in Southeast Asia. While the Biden administration has been taking a more defensive and inward-looking stance toward its allies regarding EVs, another recent agreement with Mexico marks the first attempt by the US to cooperate internationally on EVs. U.S. Given that it will “compete fiercely” with China, it is likely that the EV industry, especially in Southeast Asia, will soon become another hotspot of Sino-American competition.