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

The rationale behind the US-ASEAN Electric Vehicle Initiative

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

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As a follow-up to what he promised at a 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.

Announcing the initiative, which is a flagship 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 electricity infrastructure, the adoption of EVs in 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 internal agenda of the Biden administration. Biden’s passion and support for American-made EVs was evident even during his presidential campaign. In addition to saying that EVs are the future of the American auto industry, he pledged to take a more active role in supporting the development of US electronics. Recently, Biden even stated 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 Electric Vehicles 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 to provide critical minerals and other components needed to make EV batteries, and more than 10 billion dollars to clean up. transit and school buses. Although the recently passed Science and Chips Act does not contain articles specifically related to EVs, the law will also promote their development, as sufficient and advanced chips are critical to the future of EVs. In doing so, the Biden administration is trying to set the stage for a boom in the United States in electrical engineering manufacturing and the supply chain for electrical appliances.

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Given the huge market potential in Southeast Asia, 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 important for the US in that the region’s lower labor costs and abundance of minerals important for power generation will help the US create 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 power leadership. The Biden administration has long been dissatisfied with the American market share of electric vehicles, especially compared to China. It has since vowed to “rival China” in power generation. In recent years, a growing number of Chinese power producers 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 supplied their EVs in Southeast Asian countries. SAIC-GM-Wuling (SGMW) and BYD have localized their own EV productions in Indonesia and Thailand, respectively. In addition, BYD is collaborating with the Science, Technology and Research Agency of Singapore to research and develop an EV system for public transportation.

Apparently, China’s efforts have already produced some positive results. The data shows that the market share of Chinese electrical appliance manufacturers in Thailand is expected to increase from 58 percent in 2021 to about 80 percent this year. With the new initiative, it appears that the Biden administration is looking beyond the machines themselves in competing with China in Southeast Asia. it aims to shape the region’s Electricity ecosystem with US solutions and technologies, from EV manufacturing to the creation of EV infrastructure such as charging stations.

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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 a “symbolic gesture” the US was using to woo ASEAN. , rather than cooperating “to achieve the real goal”. a prosperous and peaceful ASEAN,” China claimed was its goal.

But it is likely that American pledges to Southeast Asia will not be matched by the provision of resources. Speaking at the US-ASEAN summit in Phnom Penh this month, Biden announced that he had requested $825 million for all forms of aid to Southeast Asia in 2023, a mere drop in the region’s needs. While Biden may pay for more power projects in Southeast Asia, it’s unclear how much of an impact 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 more protective and inward-looking toward its allies on EVs, the initiative is one of the first attempts by the U.S. to cooperate on electric power internationally, along with another recent agreement with Mexico. Given that the US will “compete strongly” with China, it is likely that the electrical engineering industry, especially in Southeast Asia, will soon become another hot spot of Sino-US competition.

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