With the upcoming Trump administration, the Indonesian government is working to deepen its ties with Elon Musk, who maintains close connections with the president-elect and is expected to play a key role in the transition.
According to The Wall Street Journal, Luhut Binsar Pandjaitan, Chairman of Indonesia's National Economics Council, previously invited Elon Musk to establish a battery factory in Indonesia. Musk declined the proposal, citing logistical challenges due to the distance between Tesla's car factories and the country.
Looking ahead, Pandjaitan revealed plans to propose new collaboration opportunities to Musk, particularly focusing on the development of a data center in Indonesia to support xAI's computing needs.
Describing his relationship with Musk as friendly, Pandjaitan discussed Musk's forthcoming role in the Trump administration's Department of Government Efficiency (DOGE). In their exchange, Pandjaitan remarked on the transition from corporate leadership to government advisory roles, noting the contrast between independent CEO decision-making and collaborative government work. The officials plan to meet again after Trump's inauguration in 2025.
The engagement follows Tesla's August 2022 agreement with an Indonesian company for a five-year, US$5 billion nickel procurement deal. Analysts interpreted this as part of Indonesia's strategy to attract Tesla's battery manufacturing operations to the country.
Since 2020, Indonesia has maintained a ban on nickel ore exports to strengthen its electric vehicle (EV) industry. The country has actively sought investments from Chinese and South Korean companies for mining projects and battery manufacturing facilities.
These efforts have yielded results. Hyundai Motor and LG Energy Solution (LGES) launched Indonesia's first battery factory in July 2024. Additionally, China's CATL and Indonesia Battery Corporation (IBC) are developing a joint-venture battery factory scheduled for completion by 2027, while Gotion High-tech has established a local subsidiary.
During his May 2024 visit to Indonesia, Musk announced Starlink's entry into the country. While Pandjaitan proposed using Indonesia as a SpaceX rocket launch site, highlighting the energy advantages of equatorial launches, Musk declined, citing SpaceX's established US infrastructure and relocation costs.
As the Trump administration prepares to take office, Southeast Asian nations are monitoring potential changes in tariff policies and US-China trade relations. The Economist reports that Indonesian President Prabowo Subianto is pursuing a balanced diplomatic approach with both global powers.
