Elon Musk, the visionary behind Tesla, the prominent electric vehicle manufacturer, is contemplating a proposal from Indonesia to set up a facility for producing electric vehicle (EV) batteries, as disclosed by a high-ranking Indonesian official.
Luhut Binsar Pandjaitan, Indonesia’s Minister for Maritime Affairs and Investment, shared insights with the media following a discussion between Musk and Indonesian President Joko Widodo at the World Water Forum held in Bali.
Luhut conveyed, “We proposed the idea of constructing a factory for EV battery production here in Indonesia to him. Musk responded that he would think it over,” as reported by The Associated Press.
During their conversation, Jokowi also suggested Musk should explore the possibility of establishing an artificial intelligence hub in the country and reiterated a previous proposition inviting Musk’s SpaceX to construct a launch site on Biak Island, located near Papua province’s coast.
Since assuming office in 2014, Jokowi has been actively promoting Indonesia’s vision to become a leading center for EV battery production and ultimately, the manufacturing of EVs themselves. He unveiled plans last November targeting the production of 600,000 electric vehicles annually by the decade’s end.
Jokowi’s strategy is to capitalize on Indonesia’s status as the holder of the world’s largest nickel ore reserves, a critical element in the lithium-ion batteries that power electric vehicles. Remarkably, in 2022, Indonesia met 48% of the global nickel demand, a figure that the Indonesian government believes could surge to 75% by 2030.
Indonesia has implemented a ban on exporting raw nickel ore to encourage investors to refine nickel within the country. The government has also been actively seeking international investment in its nickel and battery production sectors.
Jokowi and his team have been engaging Musk and Tesla for several years, aiming to position Indonesia as a key player in Tesla’s supply chain. Musk, who is currently visiting Indonesia for the first time, launched his Starlink network in Bali, marking Indonesia as the third Southeast Asian country to benefit from this satellite internet service. Musk highlighted the potential of Starlink to enhance internet connectivity across remote areas of Indonesia.
Though Musk kept details of his investment plans under wraps, he hinted at the likelihood of his company investing in Indonesia. Jakarta views a Tesla investment as a major endorsement of its electric vehicle ambitions, complementing the investment from Chinese and South Korean companies in the nickel and EV battery sectors.
Other U.S. tech giants, including Microsoft and Apple, have also shown interest in Indonesia, with Microsoft planning a $1.7 billion investment to advance cloud services and AI infrastructure, and Apple exploring the possibility of establishing a manufacturing base in the country.
