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

A Tesla Model S electric car is shown during an exhibition in Zhengzhou, Henan Province, China, on November 4, 2018.

Credit: Depositphotos

As a follow-up to what he promised at the special US-ASEAN summit earlier this year, President Joe Biden proposed the creation of a US-ASEAN electric vehicle initiative at this month’s US-ASEAN summit. in Cambodia.

In announcing the initiative, a flagship initiative of the U.S.-ASEAN Transportation Dialogue Partnership, Biden hopes to work with his ASEAN counterparts to create an integrated electric vehicle (EV) ecosystem in Southeast Asia. Specifically, the initiative will focus on developing electric vehicle infrastructure in the region, adopting electric vehicles across the region, and developing electric vehicle solutions and technologies in the region. In addition, the United States will also assist ASEAN in establishing an ASEAN roadmap for the implementation of electric vehicles.

First, the initiative must be understood as an extension of the Biden administration’s domestic agenda. Biden’s passion and support for electric cars made in the United States was evident even during his presidential campaign. In addition to stating that electric vehicles are the future of the American auto industry, he has pledged to take a more active role in supporting the development of electric vehicles in the United States. Recently, Biden stated that electric vehicles have been an integral part of restoring American greatness.

Since taking office, Biden has taken concrete steps to boost electric vehicle production and adoption in the United States. Through the bipartisan Infrastructure and Jobs Investment Act, for example, the Biden administration could invest $7.5 billion in electric chargers, more than $7 billion in critical minerals and other components needed to produce electric vehicle batteries, and more than $10 billion in cleanup. . Transit and school buses. Although there are no articles in the recently passed Science and Chips Act that specifically address electric vehicles, the law will also stimulate their development, since sufficient and advanced chips are essential for the future of electric vehicles. In doing so, the Biden administration is trying to create the foundation for an electric vehicle manufacturing boom and the electric vehicle supply chain in the United States.

Given the vast market potential of Southeast Asia, the US-ASEAN electric vehicle initiative may facilitate electric vehicle trade between the United States and the region and create more export opportunities for electric vehicle manufacturers with factories in the United States. Working with ASEAN is also essential for the United States, in the sense that lower labor costs in the region and an abundance of minerals that are critical to electric vehicle production will help the United States create a more secure supply chain.

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Second, the initiative may also act as part of a US strategy to compete with China for global leadership in electric vehicles. The Biden administration has long been dissatisfied with the US market share of electric vehicles, especially compared to China. Since then, it has vowed to “outpace China” in the electric vehicle industry. In recent years, an increasing number of Chinese electric vehicle makers have entered Southeast Asia and are looking to expand business in the region. For example, BYD, Great Wall Motor (GMW), Hozon, and Aiways have all delivered their electric cars in Southeast Asian countries. SAIC-GM-Wuling (SGMW) and BYD have localized their EV products in Indonesia and Thailand, respectively. In addition, BYD has partnered with the Singapore Science, Technology and Research Agency on the research and development of an EV system for public transportation.

It seems that China’s efforts have already yielded some positive results. Data shows that the market share of Chinese electric vehicle makers in Thailand is expected to rise from 58 percent in 2021 to about 80 percent this year. With the new initiative, the Biden administration appears to be looking beyond cars per se when competing with China in Southeast Asia; It aims to shape the electric vehicle ecosystem in the region with American solutions and technologies, from producing electric vehicles to establishing electric vehicle infrastructure, such as charging stations.

Shortly after the Biden administration’s decision to launch the US-ASEAN electric vehicle initiative in Cambodia, Chinese state media Global Times commented that it was just a “symbolic gesture” the US was using to entice ASEAN rather than cooperate towards the “real goal” of a prosperous and peaceful ASEAN. It also claimed to be the target of China.

But American promises to Southeast Asia may not be matched by a commitment of resources. Addressing the US-Association of Southeast Asian Nations summit in Phnom Penh this month, Biden announced that he had asked for $825 million for all kinds of aid for Southeast Asia in 2023, just a drop in the sea of ​​the region’s needs. Although Biden may push for more electric vehicle projects in Southeast Asia, it remains unclear how much there will be follow-up.

Whatever the outcome, the announcement of the initiative will undoubtedly intensify the already intense competition for electric vehicles in Southeast Asia. As the Biden administration takes a more protective and inward-looking stance toward its allies on electric vehicles, the initiative is one of the first attempts by the United States to cooperate internationally on electric vehicles, along with another recent agreement with Mexico. Given that the United States will “compete aggressively” with China, it is likely that the electric vehicle industry, especially those in Southeast Asia, will soon become another hotspot for Sino-American competition.

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