Elon Courts Indonesian Market
Elon Musk is getting ready to meet with Indonesian President Joko Widodo this week to continue talks on Tesla expansion into the region.
This meet is the latest in a string of recent delegations to and from the South Asian country. Last week Tesla representatives reportedly travelled to Indonesia and earlier in April, Musk met with Luhut Binsar Pandjaitan, Indonesia’s Coordinating Minister of Investment and Maritime Affairs. These meetings are undoubtedly spurred by one thing: Nickel.
Indonesia has been very busy trying to develop a full domestic supply chain for their gigantic nickel deposits. And nothing gets Elon’s attention like nickel.
Indonesia owns the largest known nickel reserve in the world, and their mining industry is also the largest producer of nickel in the world. The United States Geological Service reported Indonesia's nickel reserves to be 21 million metric tonnes, compared to the global reserve of 89 million tonnes; and they’re able to produce up to 800,000 tonnes annually.
“This is indeed the first time for Elon and I to meet, but actually, our communication has been established for the past two years. For about an hour, I conveyed the potential raw material for electric vehicle batteries, which we are currently exploring through the mineral downstream program.”
Luhut reports a back-and-forth with Musk that’s lasted over two year, so why now? Well a big reason is likely Russia deciding to break away from the global markets. Musk could of course still choose to get Russian nickel, but he’s definitely chosen a side by giving direct aid to Ukraine. So, without access to their nickel, Elon needs to find another source.
And he’s been grabbing up a bunch. Tesla’s been buying nickel mines all over the western hemisphere for the last couple years now, as nickel begins to become a more and more highly prized metal. If those new 4680 batteries are to be made, there’s going to have to be a steady supply of the metal.
This meeting with the Indonesian President is likely to seal the deal. Tesla needs nickel, and Indonesia would really love to have a major automaker in their country. They’ve even reportedly offered SpaceX the island of Biak for a new space port. No word on if Musk will take them up on that offer, especially considering the over 100,000 native Papuans living there currently may not be too happy with an eviction.
But this deal is certainly more about Tesla and its battery tech than anything else. Keep your eyes on Indonesia, because we’re due for another Gigafactory announcement this year.