22-8-2023 (KUALA LUMPUR) Last week, reports emerged suggesting that Indonesia believes Tesla is planning to invest in the production of materials for electric vehicle (EV) batteries in the country. It is expected that the American automaker will make an official announcement regarding this investment in the coming months.
While Tesla has also expressed plans to invest in Malaysia, the details provided so far do not specifically mention manufacturing. This raises the question of whether there are plans in place to further develop the EV battery supply chain. This inquiry was posed by CNBC news anchor Martin Soong during an exclusive interview with Malaysian Prime Minister Datuk Seri Anwar Ibrahim in The CNBC Conversation over the weekend.
Soong inquired whether Malaysia would compete with Indonesia in establishing a supply chain for Tesla’s batteries, encompassing mining to assembly, given the EV manufacturer’s interest in exploring this aspect in the region.
Prime Minister Anwar stated that Malaysia has already produced its own batteries and can offer a competitive advantage to Tesla. He explained that the understanding is for Tesla to purchase batteries from Malaysia, as they are cheaper and locally produced, providing an advantageous proposition. “Why should they bring batteries from all over the world?” Anwar questioned.
When asked if Malaysia’s ultimate goal was to assemble Tesla vehicles, Anwar replied that it was too premature to determine, but assured that the country is prepared in other areas. He emphasized that Malaysia has the capacity to produce the necessary car parts or batteries. “What is important is we do have the capacity to produce parts or batteries required in the cars,” he stated.
The Prime Minister further emphasized that Malaysia and Indonesia’s foray into electrification should not be viewed as a competition, as both countries can complement each other. He highlighted the commonalities between the two nations and the strong collaboration between their governments and private sectors. “Instead of being in a fierce competition, we should be able to complement each other, and that has been the ‘spirit’ of my conversation with Indonesia’s President Joko Widodo and followed through by the industries,” Anwar explained.
Regarding the topic of foreign investors holding 100% equity shareholdings in Malaysia, as is the case with Tesla, Anwar clarified that this is not a new occurrence. He noted that exceptions have been made in the past for digital transformation, information technology-related activities, and investments. However, such exceptions are selective and depend on the synergy and potential economic returns in the future. Anwar highlighted that if Tesla’s investment can benefit multiple local industries, it would be considered as good as holding a 30% equity stake. In fact, in terms of real economic returns, it would be even more beneficial.
$TSLA‘s entry into Malaysia could shake-up Southeast Asia’s #EV industry. @AnwarIbrahim tells @MartinSoong this is just the first step for bigger plans. pic.twitter.com/tCxQAqgt2X
— Squawk Asia (@asiasquawkbox) August 21, 2023
