Tesla's Potential Expansion to Indonesia

Tesla's Potential Expansion to Indonesia

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by Gill D on May 23, 2022

Bahlil Lahadalia, Indonesia's investment minister, is optimistic that Tesla would invest in the country. After meeting with Indonesian President Joko Widodo, Elon Musk reportedly agreed to build a facility in Central Java region. Despite the lack of a formal agreement, the investment minister said that the project could start this year. The amount of the possible investment was not disclosed.

Musk and Widodo met at the SpaceX Starbase in Texas, where the Indonesian president was visiting. They allegedly talked about the investments, as well as technology and innovation in general. Following the meeting, the president allegedly directed Luhut Binsar Pandjaitan, the coordinating minister for maritime affairs and investments, to follow up on the subject. According to Lahadalia, Musk committed to communicate extensively with the Indonesian team. He believes a deal will be reached soon.

A Jakarta media outlet reported that the team is negotiating, but the president intends to entice Elon Musk. Lahadalia said later, “We are discussing how much the investment is worth and when to start. We just have to wait for the right time.”

Indonesia is a major nickel producer (it holds approximately a quarter of the world's resources) and aims to develop a processing sector around it, including batteries and electric vehicles. International firms have been drawn to the country repeatedly in recent years.

Wake-Up Call: Elon Musk receives Indonesian coffee sweets loaded with caffeine as the Indonesian group heard Musk sometimes sleeps at his factories. 

According to rumors in the media, a Korean consortium led by LG has reached a deal with Indonesian state-owned enterprises for a $9 billion project. According to reports, the project's goal is to create a complete value chain for electric vehicle batteries.

CATL, a Chinese battery cell producer, had had formed a similar arrangement not long earlier. CATL intends to invest around 5.5 billion euros in the country as part of this project. Nickel mining and processing, battery materials, battery production, and battery recycling are all part of the project.

 

Progress in China

Tesla's Shanghai plant was running at less than half capacity last week, highlighting the difficulties firms are facing as the COVID-19 shutdown tightens. With an annual capacity of 10 GWh, the plant in Karawang, outside Jakarta, is set to begin production in the first half of 2024.

Tesla's goal to restart output at its Shanghai plant to levels prior to the city's COVID-19 lockout was postponed by at least a week last week. From May 16, the American electric vehicle manufacturer planned to raise production at its Shanghai plant to 2,600 automobiles per day. According to the latest letter, the Shanghai mill will work on one shift this week, producing around 1,200 units per day. It also stated that starting today, it would strive to raise output to 2,600 units each day.

To maintain "closed-loop" operations, Tesla must treble the number of workers living and sleeping near production lines. Companies in Shanghai are only permitted to reopen if they can function under such a plan, which necessitates worker isolation. There are also supply concerns, as suppliers' plants and logistics in Shanghai and the neighboring areas have yet to be fully rebuilt.

Last week, Tesla's Shanghai plant was operating at less than half capacity, underlining the challenges businesses face as the COVID-19 lockdown tightens.

Shanghai plans to reopen extensively and allow normal life to resume on June 1, according to a city official, after announcing that 15 of the city's 16 districts had eliminated cases outside of quarantine zones.

Tesla sent over 4,000 China-made automobiles to Belgium via a Shanghai port, the company's second shipment since its Shanghai plant reopened on April 19. Model 3 and Model Y automobiles are manufactured in Shanghai for both domestic and international sales.

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