100s of titles, one news app for just $10 a month.
Dive Deeper:
How Tesla CEO Elon Musk is hedging his global supply chain bets
Elon Musk is hunting for new Asian production hubs for his EVs. Indonesia looks like the clear winner, while India appears to…
From Sneakers to Teslas, China Lockdowns Upend Global Supply Chains
Supply-chain chaos is expected to worsen as the impact on companies and consumers starts to ripple across the globe.
Tesla Urges Panasonic To Fast-Track Development Of Next-Gen Batteries
Tesla, Inc (NASDAQ:TSLA) urged Panasonic Holdings Corporation (OTC:PCRFY) to speed up the development of its next-generation 4680 batteries, Bloomberg reports as per Panasonic CFO Hirokazu…
Tesla Playing Quidditch While EV Rivals Hockey Around Mining Goals: Morgan Stanley Analyst
Tesla Inc’s (NASDAQ: TSLA) moves to secure the supply of critical battery materials via acquisitions or deals will be a cue…
One subscription that gives you access to news from hundreds of sites
Nissan reports first full-year net profit in three years
Tokyo (AFP) - Nissan reported a positive full-year net profit for the first time in three years on Thursday, citing…
Tesla's Elon Musk Says Many EV Makers Are Going About It Wrong
Tesla CEO Elon Musk often talks about just how hard it was for Tesla to finally become successful. He sees…
Get all your news in one place
Latest Politics news:
Coalition to cut $3 billion from public sector to pay for election promises
The Coalition’s plan to cut more than $3 billion from the public service to pay for its election promises has…
Read news from The Economist, FT, Bloomberg and more, with one subscription
Learn More
How does Australia's voting system work?
As you head to your local polling place this Saturday, or cast your ballot in an early vote, it’s worth…
Lake Macquarie councillor Colin Grigg to stand on One Nation ticket
The local pastor stood as an independent in the recent local government election, and said he resisted a political stint…
Below the Line: A Facebook executive explains the last-minute election battle on social media – podcast
What do One Nation’s Pauline Hanson and Labor’s Tanya Plibersek have in common? They are both winning the battle for…
‘Respect and expect’: Coalition to cut public service funding
Scott Morrison will order “well paid” public servant bosses to make $2.7 billion in cuts to help the government claw…
From analysis to good news, read the world’s best news in one place
Elections used to be about costings. Here's what's changed
The last week of campaigns used to be frantic, behind the scenes. In public, right up until the final week,…
No plans to shut down ‘disastrous’ COVIDSafe app
There are no plans to switch off the controversial COVIDSafe app despite contact tracing no longer taking place in Australia…

No role for India yet in Tesla’s new global supply chain hedge

Indonesia could do for power-packs what China did for Tesla’s EV plans (Photo: AFP)

With a friendly policy bolstering the country’s EV goals, companies have started committing billions of dollars. LG Energy Solution, along with others, is investing about $9 billion in a full supply chain from mining to manufacturing in the country. With Hyundai, the firm is developing a battery plant, too. Meanwhile, the world’s top powerpack maker Contemporary Amperex is investing almost $6 billion in a battery project with state-backed Aneka Tambang and Industri Baterai Indonesia. Further up the value chain, China’s Zhejiang Huayou Cobalt and Vale Indonesia announced they would work together on a nickel project.

The move by companies across the EV supply chain into Southeast Asia’s largest economy shows how important it is to be close to a source of raw materials. If there’s one thing the past year of logistical screw-ups and delays has shown the industry, it’s that proximity is key. Even if global supply and demand is balanced on paper, moving industrial goods around is expensive.

Tesla knows this well. It has created large manufacturing hubs in China and Germany. After having trouble making EVs in the US, its market share has grown globally. Now the EV-maker is looking to secure materials and make its own batteries, while stopping short of buying mines . Wherever Musk sees problems in production, he looks for a solution. Tesla is essentially creating discrete supply chains across the globe.

Indonesia churns out around 1 million cars in a good year, and is dominated by Japanese producers’ smaller vehicles. Its auto market pales in comparison with China’s and the US’s, with EVs a small portion. Potential sales generated in Indonesia wouldn’t really move the needle for Tesla. Yet, Jakarta is leveraging existing resources, an EV business-friendly policy and the right story to make it fertile ground for large-scale investment. The moment that happens, Indonesia will be able to boast about its battery manufacturing supply chain on the global scale.

Meanwhile, India continues to hem and haw over import duties. Government officials in New Delhi have made bold statements about their ambitions, talking up their desire to draw in Tesla. Earlier this month, road transport minister Nitin Gadkari said that Tesla would benefit from a plant in India. Yet, customers who placed orders are still waiting and it’s unclear how Musk’s firm would get a leg up. Now, there are questions around whether Tesla will make its way into India at all.

That is probably a good bet, too. Firms are worried about procuring parts and dealing with logistical issues and high shipping costs. Progress on EVs has been scattered and commitment isn’t clear. Toyota, one of the world’s biggest automakers but an EV laggard globally, has pledged to invest $624 million in making EV components through its existing units in India, but it’s unclear who will buy them. Even India’s top automaker Maruti Suzuki isn’t planning on EVs until 2025. Add in policy hoops and punitive taxes, and India has all but ruled itself out by making the cost of investing in its market so high. India’s vaccine king, Adar Poonawalla, also decided to weigh in earlier this month. He tweeted that putting capital into making cars in India would be the “best investment" Musk would “ever make." That’s perhaps too optimistic.

EV and battery manufacturers are in high demand across the globe and it will take far more than bold words and political ambition. Resources must be made available and policy should be sufficiently coherent for manufacturers to work with. It’s bizzare, then, that Prime Minister Narendra Modi’s government continues to hold back. Yes, there are a few local EV models, but the Indian auto market remains an aspirational one. That means wide-scale adoption will pick up pace only once there are enough models that people want to buy—like Tesla’s Model 3—and enough charging facilities that make it easy, as the evolution of the two-wheeler market showed.

Just as China made Tesla a global company, Indonesia could do the same for its battery supply chain. All while making manufacturing more affordable and eventually, EVs, too. It’s a means to an end—and a smart one at that. ©bloomberg

Anjani Trivedi is a Bloomberg Opinion columnist covering industrial companies in Asia.

What is inkl?
The world’s most important news, from 100+ trusted global sources, in one place.
Morning Edition
Your daily
news overview

Morning Edition ensures you start your day well informed.

No paywalls, no clickbait, no ads
Enjoy beautiful reading

Content is only half the story. The world's best news experience is free from distraction: ad-free, clickbait-free, and beautifully designed.

Expert Curation
The news you need to know

Stories are ranked by proprietary algorithms based on importance and curated by real news journalists to ensure that you receive the most important stories as they break.

Dive Deeper:
How Tesla CEO Elon Musk is hedging his global supply chain bets
Elon Musk is hunting for new Asian production hubs for his EVs. Indonesia looks like the clear winner, while India appears to…
From Sneakers to Teslas, China Lockdowns Upend Global Supply Chains
Supply-chain chaos is expected to worsen as the impact on companies and consumers starts to ripple across the globe.
Tesla Urges Panasonic To Fast-Track Development Of Next-Gen Batteries
Tesla, Inc (NASDAQ:TSLA) urged Panasonic Holdings Corporation (OTC:PCRFY) to speed up the development of its next-generation 4680 batteries, Bloomberg reports as per Panasonic CFO Hirokazu…
Tesla Playing Quidditch While EV Rivals Hockey Around Mining Goals: Morgan Stanley Analyst
Tesla Inc’s (NASDAQ: TSLA) moves to secure the supply of critical battery materials via acquisitions or deals will be a cue…
One subscription that gives you access to news from hundreds of sites
Nissan reports first full-year net profit in three years
Tokyo (AFP) - Nissan reported a positive full-year net profit for the first time in three years on Thursday, citing…
Tesla's Elon Musk Says Many EV Makers Are Going About It Wrong
Tesla CEO Elon Musk often talks about just how hard it was for Tesla to finally become successful. He sees…
Get all your news in one place