At the early 2023, the momentum of ASEAN Plus Three (APT) cooperation during the 43^rd ASEAN Summit achieved a new milestone on the statement to develop an electric vehicle (EV) ecosystem as a follow-up of the declaration of the ASEAN leaders’ on the need to establish regional electric vehicle ecosystem on the 42^nd ASEAN Summit on May 2023. The EV ecosystem refers to components that enable an EV environment, including EV model and supply, charging infrastructure, awareness and acceptance, and policies. This remarkable advancement demonstrates the region’s strategic positioning, complemented by the automotive manufacturing powerhouses of China, Japan, and Korea. Together, they aspire to establish themselves as the central hub of the electric vehicle industry. 

Based on the 7^th ASEAN Energy Outlook, transportation is the second largest energy-consuming sector with around 35% (2020) in the region, with oil products continuing to be the highest consumed. To reduce emissions and oil dependency, the deployment of electric vehicles is considered as viable optionc. With the current policies in place, by 2050, the region will only increase less than 26% of electric car, buses, and motorcycles far from what we needed. Additionally, the transition towards EV would require a staggering investment of nearly USD 419 Billion until 2050, only for the development of 4 million units of EV charging infrastructures and yet to include related infrastructures. Thus, higher penetration of EVs by developing an enabling ecosystem through adoption and improvement of the industry and infrastructure is imminent.  

ASEAN readiness for this ecosystem needs to be strengthened so that there are comparative advantages for each member states with their strength. Among others, Thailand is the leading car manufacturers, Indonesia and the Philippines have an abundance of Nickel required to power EVs. So, the region will be a target market and play a huge role in the processing industry. 

Why Japan, Korea, and China a.k.a +3? 

The APT Cooperation Work Plan 2023-2027 entails a plan to enhance energy security and cooperation, this workplan embodied the support to ASEAN on having an enabling environment for the electric vehicle. Previously, study on the readiness roll out of electric mobility were observed, which outlined the technology, manufacturing capability, and investment as the primary challenges, thus holistic supporting policies regionally and cooperation were highlighted. 

ASEAN also recently developed the ASEAN Strategy for Carbon Neutrality, which provided coordinated and complementary approaches to reap the benefits of potentially 5.3 trillion USD GDP value-add by 2050 from embracing carbon neutrality in this region. Building upon ASEAN strength and regional complementarity, creating a pan-ASEAN EV value chain by pooling resources, sharing costs, and coordinating production processes are prioritised through leveraging AMS’s vast resources and manufacturing capabilities. 

The plus three countries are inevitably positioned as huge player in the automotive industry and markets. Korea and China stand out as leading battery manufacturers, Korea and Japan are major players in the automotive industry, and China’s dominance over critical minerals production and processing as well as holds the record for the largest number of EVs globally. Furthermore, these three nations are recognised as some of the top Foreign Direct Investment (FDI) sources to ASEAN Member States.  

The 13 countries engaged in this cooperation are projected to be among the highest emitted from transport globally driven by the high population growth, car manufacturers, and market positions of these countries. Thus, it is imperative to advance this cooperation to have mutual benefits. Therefore, it is timely to call upon the massive player like APT to support the resourceful ASEAN as the global production hub for higher deployment of EV 

On the APT declaration, most of the ASEAN EV ecosystem declaration notions were adopted with complementary emphasis on trade promotion and technology collaboration to support ASEAN in becoming the global EV industry hub. To name a few, cooperation in harmonisation of standards, technology transfer,  as well as dialogue on the life cycle assessment such as component’s upcycling and disposal. 

Synergy for ASEAN amidst +3 diversity 

From a cooperation perspective, it is necessary to recognise the different levels of economic development and the variety of national policies and measures relating to electric vehicles amongst ASEAN Plus Three countries.  

This year marks the 50^th Year of ASEAN-Japan Friendship and Cooperation. As part of the celebration, ASEAN may expect Japan to wield its power to support the energy agenda further which acquires a boost from Japan’s Green Transformation (GX) policy and Asia Energy Transition Initiative (AETI). Both highlighted the various support to energy transition, in which include finance and technology development and deployment. Earlier this year, ASEAN and Japan also held its first senior official and ministerial meetings of Asia Zero Emission Community (AZEC), bloc proposed by Japanese Prime Minister Fumio Kishida last year. In recent years, the Japan’s major automotive companies’ investment is mainly focused on the production of Hybrid EV, particularly in Thailand and Indonesia.  

Another 50^th anniversary, also is between ASEAN-Korea which put an onus on the Indo-Pacific Strategy in which one of the core lines mentioned to lead regional energy security cooperation which specifically mention that Korea aim to create blueprint for future cooperation in the areas of electric vehicle infrastructure, technology standardisation, and battery recycling. In Indonesia, Hyundai opened a $1.5 billion EV production plant and LG began constructing a $1.1 billion EV battery cell plant in 2020 and 2021, respectively. In Singapore, Hyundai started building a $400 million innovation centre in 2020 to serve as an R&D centre and a small-scale EV production facility. Korea Conformity Laboratories established an EV battery testing centre in cooperation with the Thailand Automotive Institute in 2020. 

Meanwhile, China with its well-known Belt and Road Initiative (BRI) is important in financing many infrastructures globally. China is also known to be the most electric vehicles supplier and consumer. On its external strategy, China has been increasing its overseas investment in mining. In ASEAN, FDI from China increased by 96 per cent to $13.6 billion, mostly in manufacturing EV-related activities in 2022. Virtue Dragon Nickel Industry (China) started the operation of a $3 billion nickel smelter in Central Sulawesi in December 2021. In 2018, CATL (China) teamed up with stainless-steel maker Tsingshan Holding, battery firm GEM (both China), trading firm Henwa (Japan) and Morowali Industrial Park (Indonesia) in a $700 million project to make battery-grade nickel chemicals in Central Sulawesi. 

The trends of each country show diverse interests in the investment pattern. Japan focuses more on Hybrid EV automotive manufacturing, whereas Korea focuses on Battery EV (BEV) and battery production. In addition to exporting BEVs to the region, China also focuses on enhancing mineral extraction and processing investment. So far, in terms of EV charging infrastructure and its related grid infrastructures, still remains limited coming from the plus three countries, making it potential for future investment references. Especially EVs deployment and usage of region’s consumer has gone up, building enabling infrastructures becomes imperative. 

In addition to cooperation, ASEAN-led mechanisms and prioritising the region’s welfare shall be the priority. The cooperation should also be vigilant to the growing threat of emissions due to higher demand of EV fueled by fossil fuel-based electricity, despite the transport emissions will surely decrease. Additionally, fostering strong collaboration between energy and transportation authorities at both regional and national levels, along with active engagement beyond policymakers shall be the foundation. 

Given the considerable expertise of each partner country, several key approaches will serve as the foundation of the proposed implementation plan following this statement. These approaches include aligning with international standards, disseminating knowledge across various sectors (government, private industry, etc.), facilitating technology transfers, and, ultimately, establishing Free Trade Agreement arrangements to increase the investment for the EV ecosystem in the region. 

These recommendations shall be considered and influence the preparation of the new phase of the ASEAN Plan of Action for Energy Cooperation (APAEC) 2026-2035.