Dicky Kurniawan, Jakarta – Indonesian Investment Minister or Head of the Investment Coordinating Board (BKPM) Rosan Roeslani revealed the reason behind Tesla's decision not to invest in Indonesia.
He spilled that the primary factor is the country's continued reliance on fossil fuels for electricity generation.
"One of the reasons they redirected their investment elsewhere is because, as electric vehicle (EV) manufacturer, they want a clean production chain according to their standards. They may have been interested in our industrial zones, but the fact that our energy sources are still fossil fuels, such as coal, does not in line with their vision," Rosan said on Wednesday, September 4.
He acknowledged that this situation puts Indonesia at a disadvantage in attracting clean energy-focused companies, including Tesla. He noted that with the ongoing tensions between the United States and China, Indonesia has been a potential beneficiary of redirected investments.
"But the impact is not substantial yet. Vietnam, Malaysia, and Thailand are attracting more investors shifting their operations," Rosan said.
He assessed that one area that Indonesia needs to improve significantly is the ease of doing business, including streamlining licensing processes and ensuring legal certainty. "And, interestingly, they want to invest in new renewable energy or clean energy."
Rosan further mentioned that Vietnam utilizes clean energy sources, such as hydropower, solar power, and wind power, in over 62% of its industrial parks and economic zones.