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From India to Indonesia, Elon Musk is scouting out sites to make more Teslas for global roads. With the world mired in supply chain chaos, access to materials matters most. He’s got it right.
After lobbying against India’s tight policies around manufacturing and prohibitive import duties, Musk is headed to meet Indonesia’s President Joko Widodo and visit several areas across the country, which is also the top producer of nickel, a key metal for batteries. That’s an astute bet — for Tesla and Indonesia. And a missed opportunity for New Delhi.
To meet ambitious electric vehicle targets, Indonesia has drawn in several battery and car manufacturers in recent months with a variety of incentives. Government ministers say they hope to have investment across the supply chain.
With a friendly policy bolstering the country’s EV goals, manufacturers have started committing billions of dollars. LG Energy Solution, along with other companies, is investing about $9 billion to set up a supply chain in the country. Together with Hyundai Motor, the firm is developing a battery plant, too. Meanwhile, the world’s largest powerpack maker Contemporary Amperex Technology Co is investing almost $6 billion in a battery project with state-backed PT Aneka Tambang Tbk and PT Industri Baterai Indonesia.
Further up the value chain, China’s Zhejiang Huayou Cobalt and PT Vale Indonesia Tbk announced last month they would work together on the former’s fifth nickel project in the country.
The move by companies across the EV supply chain into the Southeast Asia’s largest economy shows how important it is to be close to the source of raw materials that feed into manufacturing. If there’s one thing the past year of logistical screw-ups and delays has shown the industry, it’s that proximity is key.
—Bloomberg