On Saturday, May 14, Indonesian President Joko Widodo met with Tesla CEO Elon Musk in Texas to discuss the possibility of investing in batteries and electric vehicle (EV) technology in the Southeast Asian nation.
Following a meeting with U.S. President Joe Biden last week, Widodo is keen on developing his country to face competition from other nations in the region.
Meeting in Texas
Widodo, locally known as Jokowi, met with Musk at the SpaceX launch site in Boca Chica, Texas, on Saturday, where he took part in “working-level discussions” to move towards a potential investment in Indonesia’s nickel industry, Reuters reported.
Last week, Tesla officials were in Indonesia for investment talks, sources familiar with the matter said however, Tesla has yet to comment about the visit.
“[This meeting] is a follow-up of my instruction to the coordinating minister of investment affairs to talk to Elon about investment, technology and innovation,” Widodo said during his visit to Texas.
According to Andry Satrio Nugroho, researcher for industry, trade and investment at the Institute for Development of Economics and Finance (Indef), a partnership between Tesla and Indonesia would have not been possible in 2021, due to the country’s lack of “operational standards for sustainability” at the time. Now, he believes that it can be done in 2022.
Discussions concerning a partnership between Tesla and Indonesia have been going on for years. They have been centered around expanding the development of EVs to create the largest regional EV industry in Southeast Asia, while expanding the global supply chain for EVs.
Indonesia is currently the world’s largest producer of nickel, which is used primarily in the production of EV batteries. Exploiting this resource could help boost Indonesia’s economy.
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Tesla officials were reported to have visited the nickel production hub in Morowali, Central Sulawesi last week. In addition to nickel, Indonesia is also a prime source for copper and tin.
A new SpaceX rocket launch site is also planned to be constructed on one of Indonesia’s remote islands.
“SpaceX’s aircraft have an autonomous landing feature, and typically they test it on water,” Nugroho said. “I think Musk will be happy here considering the fact that Indonesia is an archipelago.”
Confident about the “economic growth” and grand potential in Indonesia, Musk is also willing to come to Indonesia in November. The country is hosting this year’s G20 summit in Bali.
Despite the potential, Indonesia is still required to provide its environmental, social, and corporate governance (ESG) profile and come up with incentives to gain a leg up against other nations, particularly Malaysia, which is developing its own EV sector, analysts say.
Malaysia is an important part of the global value chain, allowing the production of Japanese car parts in the country. Last week, Malaysian Prime Minister Ismail Sabri Yaakob also invited Tesla to consider investing in the country.
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However, Indonesia seems to be on the rise in the EV industry, having scored several investments from South Korea’s LG Energy Solution and China’s Contemporary Amperex Technology Co.
Widodo has also paid a visit to Washington to meet with President Joe Biden alongside other leaders of the Association of Southeast Asian Nations (ASEAN). He will also host the G20 summit in Bali in November, where Russia is still invited to attend despite its invasion of Ukraine.
Adar Poonawalla, CEO of the Serum Institute of India, said on Twitter that Musk would make his “best investment” yet if he looked towards making cars in India.