Rumors of Tesla on Halmahera soil

Dahlan Iskan former Minister of State-Owned Enterprises

IO – There has been so much conflicting news about Tesla, and we don’t know what’s true and what’s not. It’s said that they have cancelled their plan to invest in Indonesia. It’s said that they’re moving to India.

It’s unclear when Tesla promised to invest in Indonesia, and if it decided to move to India. What’s clear is that Indonesia is approaching Tesla in order for it to invest its money here. Some say the investment is meant for constructing an electric car factory; others say that it’s just to construct a battery factory. Naturally, others say “both”. Simultaneously. From upstream to downstream.

Finally, the Government issues an official explanation: Tesla cannot be said to have “cancelled” investments in Indonesia. First, Tesla has not made any investments. They haven’t even planned anything. What’s cancelled then? Second, Tesla has not invested anything yet in India. What’s moved then?

It’s obvious that both India and Indonesia are both making overtures towards Tesla in relation with the ever-brighter future trend of electric cars. It’s not far in the future, in fact – the future has arrived and we are now at a tipping point: In Norway, electric car sales are even bigger than petroleum car sales!

So who will win in the fight over Tesla’s heart?

Indonesia or India?

Sorry, it’s neither: The correct answer is China.

Tesla has built a factory in Shanghai. Not an ordinary “factory” or even a “mega-factory”, but a “giga”-factory. That’s just how huge it is. China can help Tesla in a very short time: the factory was completely built within a year, started production in January, and commenced exports to Europe already. So they decided to make another giga-factory next to it – with the target of completing construction within a year.

With two giga-factories in Shanghai (one completed, one under construction), naturally Tesla will not easily think of building yet another car factory in Indonesia. Why bother, when they can still make exports from Shanghai? Why bother, if investment in Indonesia is hard to do and the incentive we offer is nothing special? However, Indonesia does have this advantage: we have a great reserve of nickel ore, one of the top ones in the world. A whole quarter of the world’s nickel is to be found in Indonesia, and our only competitors are Australia and Brazil.

You know where Indonesia’s nickel centers are: South, Southeast, and Central Sulawesi, as well as Halmahera Island – a mere stone’s throw from Morowali. Well, if it’s the Hulk or Werkudoro (Sanskrit: Vrikodara or Bhima, the second of the Pandavas in the Indian epic Mahabharat). The Government has proven its ability to pull in mega-investments to Morowali in East Sulawesi – the new province being constructed by some. Several Chinese corporations have invested IDR 100 trillion there.

Morowali is transformed as if by magic, from desolate grasslands to what Lhokseumawe or Bontang was during the golden age of gas. Nickel mining roaring along at a great scale. Giga-smelters constructed, ditto giant modern harbors, with cranes strong enough to carry a truckload-worth of raw materials in one scoop.

Nickel is an essential material for making lithium batteries. This is what Indonesia offers to Tesla, as well as to battery giants China and Korea. Indonesia is reliable as pure source of material. However, the nickel in East Sulawesi has absolutely nothing to do with batteries. All those giants being built in Morowali are just for preparing materials to produce stainless steel. The Morowali smelters cannot be used for the battery industry, not even by adapting the machines. The process of generating materials for batteries is completely different from the process of generating materials for stainless steel. The concept is 100% different. In other words, we need to start investing from scratch if we want to start the support industry for battery making.

Therefore, the Government doesn’t seem like it will offer East Sulawesi for the battery industry. It’s more likely that they will propose Halmahera Island instead – especially since there’s a large port available in East Halmahera already. It’s a relatively new 6-yearold port that’s never been much used. It’s not bad – Tesla can save on its investments there.

However. Will Tesla enter this starting-from-zero kind of investment?

Or is it China who will dare to take up this great challenge?

Tesla’s only hope is to really develop its “power bank wall” project. This wall has been tested in Australia: It’s a wall that supports buildings but also stores electricity from the sun in the daytime for use at night. The future of this power bank wall – imagine how much money and energy we can save in electricity if it succeeds! It will change the global electrical system – and it will need one hell of a lot of nickel.