The government's offer to Elon Musk as owner of Tesla Inc. and SpaceX, which is an investment in the North Kalimantan (Kaltara) area. Without an efficient market and supply chain for electric vehicle materials, it seems difficult to attract Elon's investment.
The momentum of Tesla CEO Elon Musk's meeting with high-ranking officials in this country made hopes rise for the presence of the electric automotive giant's investment in the country. Officials up to President Joko Widodo took turns visiting Musk.
Elon's warm welcome, both when serving the group of Coordinating Minister for Maritime Affairs Luhut Binsar Pandjaitan and Pandu Sjahjrir (Deputy President Director of TOBA and Commissioner of IDX) as well as hosting a special visit by President Joko Widodo, has implied a new chapter in Tesla's relationship with Indonesia.
Understandably, before that Tesla, which had been predicted to be setting up a factory, had remained unmoved until now. Even more disappointing, Tesla even boasted of investing heavily in the construction of a car factory in India, and relying on Australian nickel supplies. Indonesia has not yet had a place in Elon's heart.
With the meeting that took place in two episodes at Tesla's headquarters, between Elon and high-ranking officials of this country, hopes for the presence of high-tech investments such as electric cars are open again. Remember, this lobby is not cans.
Indonesia does need Tesla as long as it wants to pursue the industrialization of electric vehicles. Hiring Tesla means taking the fastest route to hoist the national automotive industry level. Elon's company is by far the world's largest electric car market holder.
The predicate was obtained because Tesla managed to dominate the world's largest electric car market. China, Europe, and America are in Elon's hands. For this reason, Tesla has spread its factories in mainland Europe, the United States, and India.
As a pioneer who succeeded in massing electric car products, Tesla mastered the electrification technology. Mainly deals with the development of vehicle battery models. The manufacturer cooperates with major battery manufacturers, such as CATL and Panasonic.
Almost all Tesla product models carry nickel-based lithium ion batteries. In fact, Tesla's products also introduced a type of nickel-clad battery with a high content.
Working with Tesla because it was very tempting. Of course, it's not just offering the supply of raw materials from mining. Remember, the government of President Joko Widodo still forbids the export of mining products without downstreaming.
On the other hand, although he didn't mention Tesla's investment, Elon actually stated the purpose of the SpaceX collaboration. This was conveyed during a face-to-face meeting with President Jokowi.
On the other hand, in Indonesia, officials have started to give whatever statement Elon wants. One of the statements was made by the Head of BKPM/Minister of Investment Bahlil Lahadalia.
Bahlil said Elon is interested in establishing a car factory as well as a battery factory in Indonesia. The exact information, said Bahlil, could not be disclosed.
"But Alhamdulillah, thanks to the cold hand and intuition of the president, Tesla, God willing, will enter Indonesia," he explained.
Especially if you look at the facts, automotive investment towards electrification projects is still stagnant. Just look at the data on the realization of automotive investment during the first quarter of 2022, even though it fell sharply in the midst of the government's incessant efforts to invite potential investors.
In the first quarter of 2022, the total investment in the automotive sector was recorded at US$280.5 million. The value obtained was cut by 48.8 percent compared to the same period last year of US $ 548.7 million.
On the other hand, the largest investment is still contributed by Japanese manufacturers, in fact manufacturers of 'the country of sakura' are still considered to be slowly transforming towards electrification. Chinese manufacturers are even almost nil in investing in electrical products. Remaining only South Korea who poured heavy investment in the last year.
From the market side, electric vehicle products are also still stalled. South Korea through Hyundai is still the biggest support in electric car marketing. Hyundai's total EV (electric vehicle) sales reached 137 units during January-April, equivalent to 84.04 percent of total EV sales.
In this position, Tesla's presence will act as a game changer. Because of that, the government looks very “crazy” towards Elon.
OTHER FACTS
The problem is, Tesla is not like other electric car manufacturers. If Hyundai has the guts to invest heavily in Indonesia even though the electric car ecosystem has not yet been established, the South Korean manufacturer can take advantage of its production capacity to optimize conventional engine products first. Likewise other manufacturers.
Tesla only has an EV product line. The rest, the technology giant from the United States actually built SpaceX, which focuses on working on space projects.
Of course, with this fact, Tesla's interest in Indonesia is to secure the supply of nickel material as raw material for electric batteries. But recently, Tesla revealed that it had used a cathode battery made from lithium iron phosphate or LFP, which was later more efficient than nickel limonite and cobalt ores.
Head of the Center for Industry, Trade and Investment Indef Andry Satrio Nugroho assesses that this trend will make Indonesia's nickel bargaining position unable to compete with the raw material for electric vehicle batteries that have been used for the Tesla Model 3 electric car, the Standard Range type.
"When the world nickel price increased due to the moratorium on nickel Ore exports from Indonesia, Elon looked for a way and found that one of the cheap and safe sources of batteries is using LFP, so we see the competition between batteries produced by LFP and nickel cobalt," he said.
Elon also brought in battery giant from Japan, Panasonic to boost battery production in the United States. Panasonic was asked to develop a 4680 battery that utilizes high grade nickel instead of low grade nickel.
Another fact is that nickel and cobalt mining is still in doubt commensurate with the principles of ESG (environmental, social, governance) as a new pillar of sustainable economic development.
On the other hand, Indonesia does not seem to be discouraged. After a "high-level" meeting with Elon, Tesla's opportunity is still open to establish a car factory as well as a battery. Regarding ESG, Tesla has recently been thrown out of that category based on the S&P ESG 500 survey.
Furthermore, it turns out that Indonesia still has an interesting menu for Elon, namely the Nusantara Capital City (IKN) project, which is set to use a fully electric mode of transportation.
Although it has not been clearly disclosed, the investment proposal offered to Elon is the area of North Kalimantan (Kaltara) which is surrounded by material mining projects such as nickel. Of course, the Kaltara area is also close to IKN, meaning that it is quite close to the production base and potential market for Tesla. Is this a way for Tesla to keep his promise? Interesting to wait for further developments.
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