Indonesia Seeks Meeting with Musk After Tesla Favouring Malaysia

Following its launch into our local market, American EV marque Tesla has also decided to set up a regional headquarters in Malaysia. While this revelation brings good news to many Malaysians, the same thing can’t be said to our neighbouring republic.

According to Asia Times, Indonesian Maritime Affairs and Investment Coordinating Minister Luhut Panjaitan is seeking a meeting with Tesla boss Elon Musk, after the latter snubbing Indonesia and choosing Malaysia to set up Tesla’s regional HQ. This comes to no surprise as Indonesia has been eyeing Musk’s investment for quite a while, seeing the multi-billionaire as the important key to its major EV industry expansion plan.

Indonesian President Joko Widodo (left) & Tesla's Elon Musk (right)

While previous talks held between Indonesia’s president Joko Widodo and Elon Musk on bringing potential investments went quite well, things have been quiet since late last year – prompting Malaysia to slide in the conversation. As a result, the American EV giant has chosen Malaysia as their regional base.

Undismayed by this revelation, Panjaiatan has decided to seek an audience with Musk on August 2nd, while insisting that Tesla is still keen to invest in the Republic, perhaps in different sectors of the EV industry. With Indonesia’s major EV industry plan involving the nation’s transformation into a regional EV battery manufacturing hub, perhaps Panjaiatan, and the Indonesian government as a whole, still has a chance to woo Musk and co.

Touching more on Indonesia's major EV industry revamp, the Republic was initially pushing Tesla to build an energy storage system (ESS) plant in Central Java’s Batang industrial park. However, Musk insisted that Tesla only focused on battery manufacturing, as well as seeking partnerships with fellow environmental-friendly suppliers – an attempt to further reduce the carbon footprint of Tesla’s EV manufacturing.

Malaysian Prime Minister Datuk Seri Anwar Ibrahim (right), in a video meeting with Elon Musk

Besides that, Asia Times also reported that part of this ESS deal’s fallout is due to Musk’s concerns over Indonesia’s stricter investment regulations, which require EV investors to partner with the state-owned Indonesian Battery Corporation (IBC). This has also resulted in Musk preferring to bring Tesla’s investment into Malaysia, with the Ministry of Investment, Trade and Industry’s (MITI) new BEV Global Leaders initiative playing a vital role, too.

MITI Minister Tengku Datuk Seri Utama Zafrul Aziz (left) and Tesla Malaysia's Country Director Isabel Fan (second from right), at the Tesla Malaysia's first Supercharger unveiling event

This new initiative by MITI essentially enables Tesla to sell its Shanghai-made EVs directly to Malaysian consumers without any middleman's markup and free of tariffs, aside from being part of the government’s push to make Malaysia a regional hub for the EV industry.

Regardless of the outcome of this meeting between the Indonesian government – represented by minister Panjaiatan – and Tesla’s Elon Musk, it is safe to say that Indonesia is still suffering from a marginal loss from this outcome. But nonetheless, Malaysians are surely looking forward to more investments and business opportunities to follow-up with this triumph.