Indonesia, Tesla Exploring Mutual Investments
Indonesia has many remote areas with limited or no internet access. Elon Musk hopes to solve that problem with Starlink satellite internet service across the sprawling island nation.
Musk arrived in Bali last Sunday, May 19th with a busy agenda, including the launch of Starlink at three Indonesian health centers, including two in Bali and one on the remote island of Aru in Maluku. Now, these clinics can exchange real-time data to improve diagnoses and disease management.
“I’m excited to bring connectivity to places that have low connectivity,” Musk said, “If you have access to the internet you can learn anything.”
Indonesia is now the third country in Southeast Asia with Starlink services. Malaysia issued the firm a license to provide internet services last year after a Philippine-based firm secured a contract with SpaceX in 2022.
Indonesian president Jokowi 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.
“We made an offer to build an EV battery factory here,” said Coordinating Maritime Affairs and Investment Luhut Binsar Pandjaitan. “He said he will consider it.”
Indonesia has 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.
Indonesia wants to build up industries to exploit its rich natural resources, which include the world’s largest nickel reserves. Nickel is an important material for EV batteries and solar panels. Indonesia supplies 40 percent of the world’s nickel and has the potential to increase this to 75 percent by 2030, according to the government data. The government has set a goal of producing 600,000 electric vehicles by 2030, and will require EVs and related components produced in Indonesia to contain of 60 percent local content by 2027.
The country has been trying for years to secure deals with Musk’s Tesla on battery investment and for Musk’s SpaceX to provide fast internet access for remote areas of the sprawling archipelago.
Pandjaitan, a powerful cabinet minister, said the president also asked the billionaire to invest in an AI center and for SpaceX to build a launchpad in Biak, an island in Indonesia’s easternmost Papua province.
Musk did not make any formal announcements related to his investment plans in Southeast Asia’s largest economy.
“It’s likely that we will invest in Indonesia,” Musk said.
Tesla isn’t the only technology firm that is interested in Indonesia as a market and manufacturing base. Recently, 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.
Indonesia is the fourth-largest nation in the world with more than 267 million people. The country has more than 17,500 islands, including Bali, Borneo, Java, Lombok, Sumatra and Sulawesi.
