Jakarta. A recent report showed that ASEAN posted a record foreign direct investment (FDI) of $224 billion in 2022, with the electric vehicle (EV) sector being popular among investors.

The ASEAN Secretariat recently launched the 2023 ASEAN Investment Report. The publication was prepared by the bloc’s secretariat in partnership with the UN Conference on Trade and Development (UNCTAD). 

The report shows that ASEAN hit an all-time high with $224 billion in foreign investment last year amidst declining global FDI flows. ASEAN’s share of the global FDI rose from 14.4 percent in 2021 to 17.3 percent the following year.

The US retained its title as ASEAN’s largest investor last year. ASEAN members booked $37 billion in combined American investments in 2022. Followed by intra-ASEAN FDI ($28 billion). China became ASEAN’s fourth-largest investor ($15 billion), just behind Japan ($27 billion). Both Hong Kong and South Korea invested approximately $13 billion respectively in the region, the report stated.

“ASEAN member countries need to strengthen cooperation to maintain the growth of foreign investment inflows to the ASEAN region and promote equal distribution of foreign investment across ASEAN member countries,” Investment Minister Bahlil Lahadalia wrote in the report’s foreword.

The 2023 ASEAN Investment Report revealed that Singapore’s FDI inflows were the highest in the region in 2022, reaching $141.2 billion. Followed by Indonesia ($22 billion) and Vietnam (17.9 billion). Manufacturing drew over half of Indonesia’s FDI inflows.

ASEAN is also witnessing skyrocketing foreign investment in the electric vehicle sector.

According to the report, ASEAN registered $18.1 billion worth of international investment in EV-related sectors in 2022, marking a whopping 570 percent growth versus just $2.7 billion the previous year. The report shows that the investment covers mostly the mining of critical minerals (nickel and cobalt), battery production, and EV manufacturing.

The report revealed that the announced greenfield FDI in ASEAN’s battery production had jumped by 656 percent from just $1.2 billion in 2021 to $8.4 billion in 2022. Greenfield investment refers to an FDI that has a parent company establish a subsidiary in a different country. 

The same report listed some of the major expansions by global EV battery makers in ASEAN, including Indonesia.

In 2022, Chinese battery giant CATL announced it would partner with the state-owned Antam and Industri Baterai Indonesia in a nearly $6 billion battery project. CATL is making the investment via Ningbo Contemporary Brunp Lygend (CBL). CBL is a subsidiary of the Guangdong Brunp Recycling Technology (Brunp), which is also a subsidiary of CATL. 

The $6 billion project includes nickel mining and processing as well as EV battery manufacturing, among others. The project lies in an industrial park in Indonesia’s east Halmahera, North Maluku, as well as other places in the country.

Just last week, Chief Investment Minister Luhut Binsar Pandjaitan told reporters that CBL had agreed to invest about $420 million in Indonesia’s EV battery industry.

“The deal has been signed. It is roughly around $420 million. Even though nickel prices are dropping, we managed to seal [the deal] and this is a breakthrough,” Luhut said while adding that further details would likely be revealed soon.