ASEAN Aims to Build Regional Electric Vehicle Ecosystem

President Joko Widodo highlighted the importance of ASEAN collaboration to ensure that the region continued to grow despite various challenges.

KOMPAS/HERU SRI KUMORO

President Joko Widodo with Mrs. Iriana and ASEAN leaders are on the pinisi ship Ayana Lako Di'a on the sidelines of the 42nd ASEAN Summit in Labuan Bajo, West Manggarai, East Nusa Tenggara, Wednesday (10/5/2023).

WEST MANGGARAI, KOMPAS - The 42nd ASEAN Summit recently adopted the Declaration on Developing Regional Electric Vehicle Ecosystem and has tasked the ASEAN Economic Community Council with overseeing its implementation.

The declaration, which includes 18 points, was agreed by ASEAN leaders on Wednesday (10/5/2023) during the 42nd ASEAN Summit in Labuan Bajo, West Manggarai regency, East Nusa Tenggara (NTT). The declaration was one of six declarations and four joint statements that were agreed on the first day of the summit.

President Joko “Jokowi” Widodo, representing Indonesia as the 2023 ASEAN chair, led the 42nd ASEAN Summit. In his many speeches, President Jokowi highlighted the importance of ASEAN collaboration to ensure that the region continued to grow despite various challenges.

"In this situation, we must strengthen collaboration to ensure that ASEAN remains the epicenter of growth. Our region's economic potential is enormous, with an economy that is growing above the world average, a demographic bonus, and a middle class that is projected to reach 65 percent by 2030.

Also read:

> Many Challenges Impede ASEAN’s Momentum

> ASEAN to Focus on Human Trafficking

“Let us work closely together, develop a shared agenda, and ensure that the region continues to be the epicenter of growth," the President said in his opening speech at the ASEAN leaders' meeting with the ASEAN Business Advisory Council.

With the declaration on developing an electric vehicle (EV) ecosystem, ASEAN leaders committed to building a regional EV ecosystem that involved member states.

ASEAN leaders also committed to developing ASEAN as a global EV production hub to support sustainable regional economic growth. This would be achieved by considering the policy space of ASEAN member states in leveraging their comparative advantages.

Let us work closely together, develop a shared agenda, and ensure that the region continues to be the epicenter of growth.

ASEAN leaders encouraged the harmonization of regional standards for the EV ecosystem, as well as training and certification based on international standards, including technology, safety standards, product specifications, infrastructure, and battery charging stations.

According to the declaration, ASEAN leaders also agreed to explore cooperation and collaboration in developing the EV ecosystem, which includes encouraging the participation of small and medium enterprises, collaborating on research and development activities, and promoting investment opportunities.

In developing the regional EV ecosystem, ASEAN leaders are pushing for cooperation with the bloc’s external partners. This will be pursued through an ASEAN-led mechanism involving international organizations as well as private and public companies.

"Task the ASEAN Economic Community (AEC) Council to oversee the overall implementation of this Declaration, provide guidance in formulating a comprehensive regional strategy, and identify the relevant lead sectoral body to coordinate the development of the regional electric vehicle ecosystem agenda," says the ASEAN leaders’ declaration.

ANTARA/AKBAR NUGROHO GUMAY

Secretary of the Ministry of State Secretariat Setya Utama (right) talks with President Director of BMW Group Indonesia Ramesh Divyanathan after the handover ceremony for the official BMW iX ASEAN Summit car in Jakarta, Thursday (13/4/2023). BMW handed over 13 BMW iX premium electric vehicles for use by heads of government at the 42nd ASEAN Summit in Labuan Bajo, NTT, 9-11 May 2023.

Supporting

Association of Indonesian Automotive Manufacturers (Gaikindo) secretary-general Kukuh Kumara said the automotive industry supported the plan to develop an electric vehicle ecosystem at the ASEAN level.

"The agreement needs to be followed up by mapping the advantages of related industries in each member state. Of course, this mapping of production advantages must be complementary," said Kukuh.

He said the ASEAN countries that currently had an automotive production base were Malaysia, Thailand, Vietnam, and Indonesia. However, in terms of the availability of raw materials, Indonesia was superior in the battery industry.

Aside from the production side, he believed that mapping the preferences and types of vehicles demanded by the market of each country was also necessary. In Indonesia, consumers tended to use EVs for daily activities, such as going to work and school, or vehicle models that were synonymous with “city cars". The price must be affordable, at around Rp 300 million per unit.

Also read:

> President Jokowi: Collaboration, Not Proxy

> Looking At the Functions of ASEAN Secretariat General

The Indonesian public’s interest in electric cars had increased significantly, as reflected by market absorption, which had jumped from 700 units in 2021 to 10,000 units in 2022.

Indonesian Smelter and Refining Enterprises Association (AP3I) secretary-general Haykel Hubeis believes that developing a regional EV ecosystem will have a positive impact on the smelter industry.

"Smelter industry players need to prepare to increase production," he said.

Haykel explained that conventional vehicles required the metals aluminum and steel, while EVs required supplies of lithium, copper, and nickel for their batteries. Increased demand for these metals, he said, could increase their prices. Therefore, pricing policies and downstreaming industries were needed to prevent an increase in the production cost of electric vehicles.

Industry Minister Agus Gumiwang Kartasasmita said publicly that he would follow up on the agreement at the technical level towards achieving the cooperation targets. He added that the agreement was in line with the ministry's program to develop a battery-powered EV ecosystem. The program aimed to bring about change in people's behavior towards using environmentally friendly vehicles. (RAZ/JUD/CAS/FRN/LAS)

This article was translated by Tenggara Strategics.