Indonesia’s President Claims He’s In Talks with Musk

During Joko Widodo‘s presidency, Indonesia has restricted the export of some raw materials, which has forced mining industries and other businesses to purify their products before shipping them overseas. Because refined materials should fetch a much higher price on the markets, which are always hungry for more resources, this could be a beneficial approach for the economy of Indonesia, as these markets always want more resources.

Widodo is not resting on his laurels after successfully moving the economy up the value chain. Instead, he is working to attract investments in the production of electric vehicles (EVs), as well as electric vehicle components and batteries, in his country. Widodo mentioned his ties to Tesla’s (NASDAQ: TSLA) CEO Elon Musk and his intention to bring a Tesla facility to his country in an exclusive interview with Martin Soong on CNBC on June 17, which was released on July 6.

“Yes, one and a half years ago, I called Elon Musk and discussed the electric vehicle industry in Indonesia. And when the ASEAN U.S. summit concluded, I met with Elon in Space X starbase in America, and we had many discussions, particularly on how Tesla can build their industry from upstream to the downstream, end-to-end, starting from smelter, then build cathode and precursors industries.”  

Cooperation with the government of the country

Widodo indicated that his government is willing to work with Tesla and providing assistance in every element of the production with the end objective of bringing a Tesla factory to his country. Widodo’s comments were made in the context of bringing a factory to his country.

“I also conveyed to him (Musk) about the concession. You can collaborate with Indonesian SEOs, and Indonesian state-owned enterprises, and work together with Indonesian private businesses. But you can also do it on your own. But in Indonesia, I’ve already prepared the way. Six weeks ago, he sent his team to Indonesia, six people who came to check on the potential of nickel to check environmental aspects. But the car-related team has not come.”

It would appear that there has not been a decision made about the construction of the factory as of yet. Widodo extended an invitation to Elon Musk to attend the G20 summit in Bali, which was scheduled to take place in October. At the summit, additional negotiations were scheduled, and a decision was perhaps going to be made.

“This is still in process. Later on, if it’s already finalized and there’s a collaboration agreement, I will convey to the public that it is already final and that Tesla will build their factory in Indonesia, but now everything is still in process. I can’t talk too much about the process.”  

Additionally, there is an investment of $9 billion in the nickel industry in Indonesia by Asian heavyweights such as China, Japan, and Korea. This could necessitate additional investments from Western countries in order to maintain a sense of equilibrium in the market. In this regard, Widodo made the following assertions:

“I already talked to Tesla, but my team also talked to Ford, so I don’t talk only to one or two companies. We welcome all companies that want to build electric vehicles, build lithium batteries, EV batteries in Indonesia, and we are open to everyone.” 

It would appear that Indonesia is making strategic efforts in order to attempt and propel its economy into the future by attracting more investments into industries that will be the flywheel of future automobiles. This would be a positive development.

It is safe to say that Tesla is one of the most prominent names, if not the most prominent one, that is capable of constructing a plant.

Advertisement

If something like that were to take place, it would undoubtedly send shockwaves throughout the country and further establish Tesla’s position in the Asian markets. Despite this, it appears like Tesla is experiencing some difficulties, as an increasing number of industry observers are expressing concern that the company is losing its “products quality edge.”

New to Financial Wars? Read more economic news here