Jokowi explains why Elon Musk should invest in Indonesia – Reuters

Elon Musk, here seen at an event in New York in early May, is being aggressively courted to produce his ‘end-to-end’ electric vehicles in resource-rich Indonesia.

Angela Weiss | AFP | Getty Images

President Joko Widodo has denied that Indonesia has turned protectionist during his tenure, saying the doors remain open to anyone – including Tesla – who wants to use the country’s abundant natural resources, if they set up factories that can add value to the local economy.

Widodo, or Jokowi as he is popularly known back home, said the government was in talks with electric car maker Tesla as well as Ford and other automakers to set up manufacturing facilities, including a vehicle factory in Indonesia.

Indonesia’s president said he met Elon Musk, CEO of Tesla and the world’s richest man, in May after US President Joe Biden hosted a summit for Southeast Asian leaders. Jokowi said he suggested Tesla could base its entire supply chain in the country.

“We’ve had a lot of discussions, especially about how Tesla can build its industry from upstream to downstream, end-to-end starting with the foundry, then build the cathode and precursor industry, build EV batteries, build lithium batteries [and] then the vehicle factory. Everything in Indonesia, because it’s very effective. This is what I came up with,” Widodo told CNBC in an exclusive interview Friday in Serang, Banten province.

He said Musk sent a team to Indonesia six weeks ago “to check the nickel potential, to check the environmental aspects, but the car-related team didn’t come.”

He said a team could visit in the “near future” to assess the potential. Jokowi, who also invited Musk to the G-20 summit, which Indonesia is hosting this year in Bali, said there was “no decision yet” on Tesla’s investment plans in Indonesia.

We want to build an industrial ecosystem for lithium batteries.

Joko Widodo

President, Indonesia

Indonesia, the largest economy in Southeast Asia, has abundant natural deposits of tin, copper, nickel, cobalt and bauxite, some of which are essential materials for electric vehicle batteries.

Under Jokowi, resource-rich Indonesia banned the export of key commodities, including unprocessed nickel in 2020, coal in 2021 and edible oil in April. The last measure was aimed at stabilizing domestic prices.

“No, I don’t think it’s protectionism. But we want that added value to be in Indonesia… If we continue to export the raw materials, those who get the added value are other countries,” he said.

In a bid to boost its economy and utilize its natural resources in domestic manufacturing, Indonesia wants to move away from exporting raw materials. It also wants to be a global player in EV batteries and an electric car maker.

“We want to build an industrial ecosystem for lithium batteries,” Jokowi said, saying it would also create jobs and generate tax revenue.

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