A Tesla investment would be a significant vote of confidence in Jakarta’s ambition of becoming an EV production powerhouse.
Elon Musk, the CEO of the electric vehicle maker Tesla, will "consider" Indonesia''s proposal to establish an EV battery plant in the country, a top Indonesian official said yesterday.
Luhut Binsar Pandjaitan, the coordinating minister for maritime affairs and investment, spoke to reporters after Musk met with Indonesian President Joko "Jokowi" Widodo while attending the World Water Forum in Bali yesterday.
Luhut said Jokowi also asked Musk to consider investing in an artificial intelligence center and repeated an earlier offer to Musk''s SpaceX to build a launchpad on Biak island, which lies off the coast of Indonesia’s Papua province.
Since he took office in 2014, Jokowi has unveiled a plan to turn Indonesia into a global hub for EV battery production and, eventually, the manufacture of EVs. Last November he announced his plans to build "an integrated EV ecosystem," in which the country would be producing 600,000 electric cars per year by the end of the decade.
This ambition is intended to leverage the fact that Indonesia possesses the world''s largest reserves of nickel ore, an important component in manufacturing the lithium-ion batteries that power EVs. Indeed, in 2022, the country supplied 48 percent of global demand for nickel, a figure Jakarta believes has the potential to increase to 75 percent by 2030.
To this end, Indonesia has imposed a ban on the export of raw nickel ore, the explicit aim of which was to force investors to refine nickel in Indonesian smelters. It has also expended considerable diplomatic effort in wooing foreign investment in nickel production and processing, and in nickel-adjacent sectors, including battery manufacturing.
Jokowi''s administration has been courting Musk and Tesla for a number of years. In May 2022, Jokowi met Musk at the SpaceX in Boca Chica, Texas, in which he laid out a vision for how the U.S.-based firm could base its entire supply chain in the country.
Musk is currently on his first visit to Indonesia, where on Sunday he launched his Starlink network, making the country the third in Southeast Asia in which the satellite internet company will operate. Launching the network in Bali, Musk said that Starlink would help millions of people in outlying parts of the archipelago to access the internet. "I''m very excited to bring connectivity to places that have low connectivity," Musk said, according to a CNN report. "If you have access to the internet you can learn anything."
Musk did not make any formal announcements on his investment plans during his trip, but said in response to a reporter''s question that "it''s quite likely that my company will invest in Indonesia." While Musk continues to keep the Indonesian government hanging, it is clear why Jakarta is making such a concerted play for the U.S. auto firm. Given the company''s global prominence, a Tesla investment would be a significant vote of confidence in Indonesia''s EV ambitions, as well as complement the mostly Chinese and South Korean firms that are the main investors in Indonesia''s nickel processing and EV battery production sectors.
Tesla isn''t the only U.S. tech firm that has shown an interest in Indonesia as both a market and manufacturing base. At the start of the month, Microsoft CEO Satya Nadella announced that the firm would invest $1.7 billion over the next four years to expand cloud services and data centers to expand the infrastructure for AI in Indonesia. This came shortly after Apple''s CEO Tim Cook made his own trip to the country, during which he made a similarly non-committal statement that the company would "look at" opening a factory in Indonesia.
Understand the Asia-Pacific''s biggest issues with a The Diplomat subscription.
Consider supporting The Diplomat''s independent journalism with a subscription bscribe today to continue having full access to our extensive coverage of the Asia-Pacific.
Sebastian Strangio is Southeast Asia editor at The Diplomat.
Get briefed on the story of the week, and developing stories to watch across the Asia-Pacific.
Hyundai and LG Energy Solution have opened a $1.1bn battery cell plant in Indonesia as the south-east Asian country works to build an electric vehicle ecosystem.
The launch of the country''s first battery plant on Wednesday is part of Indonesia''s push to move up the global EV supply chain. Indonesia has the world''s largest reserves of nickel, a crucial component in EV batteries and steelmaking.
Jakarta has stepped up efforts in recent years to bring in investments for nickel processing and battery and car manufacturing. Chinese automaker BYD and Vietnam''s VinFast said this year that they would begin making EVs in Indonesia.
"We have an abundance of natural resources but for decades we only exported them as raw materials with no added value," Indonesian President Joko Widodo said at the launch. "Now with the construction of smelters and the EV battery cell factory, we will become an important global player in the EV global supply chain."
Hyundai and LG will invest a total of Rp160tn ($9.8bn) in Indonesia''s EV ecosystem in stages, he added vestment minister Bahlil Lahadalia said the South Korean companies would begin constructing the second phase of the battery cell factory, which will have an annual production capacity of 20 gigawatt hours, with an investment of $2bn.
The two companies have a 50-50 stake in the project, which was first announced in 2021. Hyundai also has a car manufacturing plant in Indonesia, with a capacity to produce 250,000 units per year.
"Mineral resources in this country, such as iron and nickel, are key components for batteries that will mobilise millions of EVs all over the world," said Chung Eui-sun, executive chair of Hyundai.
Widodo''s ban on nickel ore exports in 2020 forced foreign companies to invest onshore. The bulk of that investment has come from Chinese companies into the nickel processing sector.
But Indonesia has been offering incentives such as tax breaks to woo nickel and EV-related investments from around the world. Hyundai said in 2021 that the Indonesian government had agreed "to offer various incentives and rewards to support the stable operation" of its battery cell plant.
Since Hyundai and LG Energy first announced they were going to open a battery cell plant in Indonesia, demand for EVs has slowed. Still, analysts said the country would benefit from the global transition to cleaner transportation.
China''s CATL, the world''s biggest EV battery manufacturer, has also started building a battery plant in the country, said Indonesian officials.
"Indonesia is at the very early stage of EV manufacturing and stands to benefit from incremental gains over the long term, regardless of whether EV moves in the fast or slow lane," said Kai Wei Ang, Asean economist at BofA Securities.
Hyundai Motor Group (the Group) has teamed up with LG Energy Solution Ltd. to secure a stable supply of battery cells for its battery electric vehicles (BEVs).
The Group and LG Energy Solution announced that they have signed a Memorandum of Understanding (MoU) with the Government of Indonesia to establish a joint venture (JV) in Indonesia to manufacture battery cells for BEVs.
On July 28, Sung Hwan Cho, President and CEO of Hyundai Mobis, and Jong Hyun Kim, President and CEO of LG Energy Solution, attended the MoU signing ceremony held at LG Energy Solution headquarters in Seoul. Bahlil Lahadalia, the Investment Minister of Indonesia, and Toto Nugroho, President Director of Indonesia Battery Corporation (IBC), joined the ceremony virtually.
Under the MoU, Hyundai Motor Group and LG Energy Solution will invest a total of USD 1.1 billion into the JV to build a battery cell plant in Karawang, Indonesia. The Group and LG Energy Solution will each have a 50 percent ownership stake in the JV. The Indonesian government agrees to offer various incentives and rewards to support the stable operation of the plant.
Plant construction is scheduled to begin in the fourth quarter of 2021 and will be completed by the first half of 2023. Mass production of battery cells in the new facility is expected to commence in the first half of 2024.
About Jakarta lithium-ion batteries
As the photovoltaic (PV) industry continues to evolve, advancements in Jakarta lithium-ion batteries have become critical to optimizing the utilization of renewable energy sources. From innovative battery technologies to intelligent energy management systems, these solutions are transforming the way we store and distribute solar-generated electricity.
When you're looking for the latest and most efficient Jakarta lithium-ion batteries for your PV project, our website offers a comprehensive selection of cutting-edge products designed to meet your specific requirements. Whether you're a renewable energy developer, utility company, or commercial enterprise looking to reduce your carbon footprint, we have the solutions to help you harness the full potential of solar energy.
By interacting with our online customer service, you'll gain a deep understanding of the various Jakarta lithium-ion batteries featured in our extensive catalog, such as high-efficiency storage batteries and intelligent energy management systems, and how they work together to provide a stable and reliable power supply for your PV projects.
