President Joko Widodo of Indonesia, often referred to as Jokowi, has devoted years to cultivating a relationship with Elon Musk, and it seems his efforts may have borne fruit. Jokowi has actively pursued the Tesla CEO to invest in Indonesia's emerging electric vehicle industry, going as far as personally visiting Musk in Texas back in 2022.
Elon Musk recently visited Indonesia for the first time following President Jokowi's charm offensive. The billionaire traveled to the resort island of Bali over the weekend, not for Tesla, but for one of his other companies: SpaceX. Musk inaugurated SpaceX’s Starlink satellite internet service in Indonesia, saying he was “excited to bring connectivity to places that have low connectivity”.
Starlink received a license to operate in Indonesia earlier this month. It’s the third Southeast Asian country to approve the satellite internet service, following the Philippines in 2022 and Malaysia last year. Establishing internet connectivity in remote areas of Indonesia, the world’s largest archipelago with around 17,000 islands, is a challenge. According to Indonesia's minister of communication and informatics, Budi Arie Setiadi, more than 20% of Indonesians still lack internet access.
Musk expressed a high probability that his other enterprises would invest in Indonesia, though specifics were not disclosed. Jokowi's persistent efforts to attract Musk and Tesla to invest in Indonesia have centered on the nation's nickel industry. Indonesia boasts the largest nickel reserves globally, crucial for stainless steel production and certain types of electric vehicle batteries.
The Indonesian government implemented a ban on nickel ore exports in a bid to promote domestic nickel processing and refining. However, despite this initiative, the majority of foreign investment has come from Chinese and South Korean firms. Nonetheless, Indonesia's reliance on nickel poses a gamble. With electric vehicle manufacturers increasingly exploring battery alternatives that exclude nickel and a slowdown in electric car sales following years of rapid expansion, the outlook for Indonesia's nickel strategy is uncertain.
Companies such as China's BYD and Vietnam's VinFast have committed to establishing manufacturing plants in Indonesia, focusing on electric vehicles (EVs). However, it's not just EV manufacturers eyeing the Southeast Asian nation. Microsoft has announced a $1.7 billion investment in AI and cloud computing services, along with plans to train up to 840,000 Indonesians in AI skills. Additionally, Apple CEO Tim Cook expressed interest in exploring manufacturing opportunities in Indonesia following a meeting with President Jokowi earlier this year.
Jokowi's efforts to attract foreign investment for his ambitious project of relocating Indonesia's capital from Jakarta to Nusantara, a city still under construction on the island of Borneo, have seen limited success. State media outlet reports that Starlink will also conduct tests of its internet services in Nusantara.