New energy vehicles sail to Southeast Asia, and RCEP brings three major dividends

The opportunities for China's new energy vehicles to sail to the Southeast Asian market, especially the dividends brought by the entry into force of the Regional Comprehensive Economic Partnership (RCEP).

 1. Background:China's domestic automobile market is fiercely competitive, the market increment peaks, and automobile enterprises look overseas. The Southeast Asian market is developing rapidly, and China's electric vehicles account for about 75% of the local electric vehicle market. The entry into force of RCEP brings new opportunities for China's new energy vehicles to go abroad.
        2. Three major dividends brought by RCEP:

Tariff dividend:RCEP member states will achieve zero tariffs for more than 90% of goods trade in phases, reduce tariff costs for new energy vehicles and parts, enhance price competitiveness, and promote the circulation of key parts and components such as batteries and electric drives within the region, reducing Manufacturing and export costs.
   Cumulative rules of origin:RCEP allows cumulative calculation of regional value components (RVC)(tariff exemptions can be enjoyed when reaching 40%), breaks traditional bilateral origin restrictions, encourages multinational automobile companies to invest and build factories in Southeast Asia, form industrial clusters, and enhance the competitiveness of China's new energy industry chain.
   Investment and trade facilitation:RCEP requires member states to optimize the investment environment, streamline the approval process, and promote trade facilitation (such as simplifying customs clearance procedures, promoting pre-adjudication and AEO systems) to help car companies shorten project start-up time, reduce uncertainty, and Promote cross-border industrial chain integration.
     3. Development opportunities for the Southeast Asian new energy vehicle market:

Policy support:Thailand, Indonesia, Malaysia and other countries have introduced subsidies, tax incentives and other policies to promote the development of the new energy vehicle industry. China car companies such as BYD and Great Wall Motors have set up local production bases to strengthen localized layout.

Industrial foundation:Labor costs in Southeast Asia are controllable, and Thailand, Malaysia and other places have a mature foundation for automobile parts manufacturing, providing support for the new energy industry chain.

Market growth:With the increased awareness of environmental protection and the accelerated construction of infrastructure (such as charging piles), the demand for new energy vehicles has shifted from "early adopters" to large-scale, with huge market potential.
     Conclusion:With tariff reductions, rules opening, investment and trade facilitation and policy promotion, the Southeast Asian market provides unique opportunities for China new energy vehicle companies. China car companies need to accelerate localization, industrial chain coordination and brand building in order to take the lead in competition.

Source: Leading the way to the sea by Gaoshen's car

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