Jokowi explains why Elon Musk should invest in Indonesia – Reuters

Elon Musk, who can be seen here at an event in New York in early May, is being actively urged to build his end-to-end electric vehicles in resource-rich Indonesia.

Angela Weiss | AFP | Getty Images

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

Widodo, or Jokowi as he is commonly known at 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 car plant in Indonesia.

The Indonesian president said he met with Elon Musk, Tesla CEO and the world’s richest man, in May after US President Joe Biden held a summit for Southeast Asian leaders. Jokowi said he offered Tesla to locate its entire supply chain in the country.

“We had a lot of discussions, especially about how Tesla can develop its industry from bottom to top, from start to finish, from foundry, then build the cathode industry and precursor production, create batteries for electric vehicles, build lithium batteries. [and] then the car factory. All in Indonesia because it is very efficient. Here’s what I came up with,” Widodo said in an exclusive interview with CNBC on Friday in Serang, Banten province.

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

He said the group may visit in the “near future” to assess the potential. Jokowi, who also invited Musk to the G-20 summit Indonesia is hosting in Bali this year, 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 rich natural deposits of tin, copper, nickel, cobalt and bauxite, some of which are important raw materials for batteries for electric vehicles.

Under Jokowi, resource-rich Indonesia banned the export of key commodities, including raw 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 this added value to be in Indonesia… If we continue to export raw materials, then other countries will get the added value,” he said.

In an effort to boost its economy and use its natural resources for domestic production, Indonesia wants to stop exporting raw materials. The company also wants to become a global player in electric vehicle batteries and an electric vehicle manufacturer.

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