Asia, explained.
In 2024, the White House raised the tariff rate on Chinese EVs to 100 per cent (Costfoto/NurPhoto via Getty Images)
Unless the US wants to pay more and wait longer, it should secure trusted capacity from non-Chinese supply chains.
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America’s EV plan needs Southeast Asia more than it admitsAmerica’s EV plan needs Southeast Asia more than it admits
Last month, BYD loaded 959 Thailand-built electric cars onto a carrier bound for Europe. The shipments left Rayong as Brussels kept tariffs on China-made EVs and explored price-floor talks with Beijing. The message here is simple. Production is moving to where policy and logistics make the maths work, and Southeast Asia is already on the route map.
Tariffs can wall off markets, but they cannot conjure supply chains. The United States can add a 100 per cent duty on Chinese electric vehicles and still find itself short of the parts that actually build cars. Motors roll on bearings. Battery packs need anode material and precision castings. Much of that capacity is clustering in Southeast Asia, not in Detroit or Chongqing. If Washington wants cheaper, faster electrification, it should build origin-cumulation corridors with Thailand, Malaysia, and Indonesia, which are basically agreements that let the value added across the participating countries be counted together under rules of origin and verified quickly. This way, the system rewards speed and auditability, not just domestic content targets. The alternative is to pay more and wait longer.
If the goal is resilience, the next step is to secure trusted capacity where it already exists or is scaling fast.
Start with the tariffs. In 2024, the White House raised the tariff rate on Chinese EVs to 100 per cent, with additional hikes on batteries and other inputs. Those measures were justified as a shield against subsidised overcapacity. They do not change the simple arithmetic that US brands still depend on non-Chinese, non-US nodes for key components. If the goal is resilience, the next step is to secure trusted capacity where it already exists or is scaling fast.
Thailand is the obvious anchor. It is the region’s auto hub, now flipping hard into electrification with new Board of Investment programs and a steady run of battery and EV announcements. The BOI’s incentives extend corporate tax holidays and export flexibility that have lured global pack makers (multinational battery firms that assemble cells into modules and packs used in EVs), including a billion-dollar cell plant that cleared approvals in 2025. In March 2025, Thailand formally approved more than US$1 billion of battery-cell investment by China’s Sunwoda, underscoring the scale and speed of the shift. Even after a soft year for output, Thailand is exporting EVs and attracting Japanese and Chinese capital for next-gen lines. This is a base that can supply US assembly lines with audited parts at scale.
US automakers are still climbing the battery learning curve (Priscilla Du Preez/Unsplash)
Malaysia is the precision shop floor of the Association of Southeast Asian Nations. Its automotive ecosystem spans metal stamping, die casting, heat treatment, and machining, and it feeds regional vehicle programs with cast housings, hubs, and other high tolerance parts. The same supplier base that outfits vehicle platforms and industrial equipment can qualify bearings and machined components for North American lines, provided documentation is clean and lead times are contractual. Policymakers should recognise that documentation quality is as infrastructure-critical as a bridge.
Indonesia closes the triangle with minerals and mid-stream battery materials. The country now accounts for roughly half of global mined nickel and is adding capacity in anodes and cathode precursors, while large cell projects proceed towards commissioning. A durable US EV strategy needs a pathway to treat these inputs as “friendly” when they are processed and packed within ASEAN, with high-visibility audit trails. The point is not to import more risk, but to import time.
Europe’s own tariff moves underline the reality. Brussels raised duties on Chinese EVs in late 2024 and has been haggling ever since over price floors and adjustments. The message for Washington is clear. Everyone is trying to rebalance, but no one can decarbonise by decree. The winners will be the blocs that replace ideology with logistics.
Here is what to do.
First, negotiate “cumulation corridors” with Thailand, Malaysia, and Indonesia that allow parts to earn preferential treatment if value is added within the corridor and if suppliers meet digital audit standards. The Regional Comprehensive Economic Partnership already provides a regional rules-of-origin backbone and a customs facilitation chapter. Use that legal plumbing to bolt on US standards for traceability, sample testing, and ruling timelines. Do not wait for an omnibus deal. Start with a corridor memorandum of understanding and publish the product-specific rules and harmonised system codes that qualify.
EVs are systems, not slogans. Systems thrive on uptime.
Second, make speed a policy variable. Set guaranteed determination windows for origin rulings and create a green-lane for certified suppliers so documentation moves at production tempo during tariff churn. That reduces working capital trapped at ports and cuts the hidden consumer tax of delays.
Third, co-fund metrology and failure-analysis labs in Kuala Lumpur, Rayong, and Batam so small-to-medium enterprises can qualify to US auto standards without six-month queues. A dollar spent on paperwork quality can save ten on inventory.
Finally, match incentives to auditability. The United States already ties credits to content. Go further and bonus what can be verified quickly. Require live dashboards for corridor shipments so buyers can see origin, transformation steps, and lab results in one view. Publish monthly stats on ruling times and exceptions. When suppliers know that clean paperwork is a revenue driver, they will build for it.
This is not a plea to offshore the energy transition. It is an admission that EVs are systems, not slogans. Systems thrive on uptime. With Europe tightening, China retaliating, and US automakers still climbing the battery learning curve, the smart bet is to lock in a nearby, non-Chinese, rules-compliant base for the parts that make cars move. Southeast Asia is building that base right now. America should meet it halfway, and quickly.
About the author
Apoorba Banerjee
Apoorba Banerjee is a Malaysia-based country operations strategist leading industrial bearings initiatives across ASEAN, with a focus on supply chain resilience and energy infrastructure.
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