Musk Has Another Hi-Tech Trick, Moves Tesla to Indonesia to Diversify Supply Chain Risks

Elon Musk, CEO of electric car maker Tesla.Reuters

We.Electric CarTo expand global sales of electric vehicles, Tesla CEO Elon Musk has recently been actively looking for new electric vehicle production centers in Asia.Indonesiais the clear winner. Caught in the worldthe supply chainIt’s a clever move when there’s chaos, especially when mastering the material is important.

Musk actually went to India earlier to ask for directions, but India’s manufacturing policies are too strict and import duties are high, leading Musk to turn his attention to Indonesia. Bloomberg News columnist Anjani Trivedi noted that Musk was smart to bet on Indonesia because Southeast Asia’s largest economy is also the largest producer of nickel, a key metal needed to make batteries.

In addition, the government’s aggressive policies have attracted many battery and automakers to Indonesia in recent months, pledging to invest billions of dollars in all parts of the electric vehicle supply chain. For example, South Korea’s LG Energy Solutions will spend about US$9 billion to build a supply chain from mining to manufacturing; Hyundai Motor will build a local battery plant; Contemporary Amperex Technology will jointly invest approximately US$6 billion between two Indonesian state-owned companies. Enterprises to develop power battery projects; Zhejiang Huayu Cobalt Industry and nickel miner PT Vale Indonesia TBK announced their collaboration last month.

Companies from all aspects of the electric vehicle supply chain gathered in Indonesia, highlighting the importance of grasping “closest” and obtaining key manufacturing raw materials. This is one of the biggest lessons the industry has learned in the past year after being exposed to supply chain bottlenecks, logistics delays, high shipping costs and other issues.

Tesla is well aware of this truth. After resistance to electric vehicles made in the United States, it has established a large-scale manufacturing base in mainland China, and its manufacturing nets have now expanded to Germany, an industrial powerhouse, and Tesla. The global market share has increased accordingly. Now, the company is trying to consolidate raw materials and manufacture its own batteries, and investing in Indonesia is a shortcut. Trivedi said that as soon as Musk finds problems in the production process, he will find solutions. What Tesla is doing now is basically building up a supply chain that is scattered around the world.

Car dealers may not be successful in expanding their business in Indonesia. About 1 million vehicles are produced annually in the country. Japanese passenger cars are mainstream. The scale of the car market is much smaller than that of mainland China and the United States. Despite the government’s ambition to make Jakarta a capital and the tourist island of Bali an example of a green transportation hub, the ideal location for a network of electric vehicle charging stations.

The Indonesian market for Tesla electric vehicle sales may be insignificant, but in Musk’s eyes, it’s still fertile ground for large-scale investment: there are abundant natural resources available locally, and government policies are important for the electric vehicle business. are favorable. When it matures in the future, Indonesia will have a global battery manufacturing supply chain to be proud of before the world.

Trivedi said that just as China made Tesla a global electric vehicle company, now Indonesia can give Tesla the global battery supply chain. Also, batteries would be cheaper to manufacture, eventually making electric cars more affordable. Overall, his comment on Musk’s move was: “It’s a means to an end, and it’s brilliant.”

Electric Vehicle Indonesia Supply Chain

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